**MANAGEMENT’S REPORTS**

** ****Responsibility for Financial Information**

 Virginia Mines management is responsible for the preparation, integrity and objectivity of the financial statements and other financial information presented in this Annual Report. These financial statements have been prepared in accordance with generally accepted accounting principles (“GAAP”) and include some amounts that are based on estimates and judgments. Management has determined such amounts on a reasonable basis in order to ensure that the financial statements are presented fairly in all material respects. 

 Virginia Mines’ policy is to maintain systems of internal accounting, and administrative and disclosure controls reinforced by standards of conduct and ethics set out in written policies to provide reasonable assurance that the financial information is relevant, accurate and reliable, and that assets are appropriately accounted for and adequately safeguarded. 

 The Board of Directors is responsible for ensuring that management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing and approving the financial statements. The Board carries out this responsibility principally through its Audit Committee. The Audit Committee is appointed by the Board and is composed of independent outside directors. The Committee meets periodically with management and external auditors to review accounting, auditing and internal control matters. These financial statements have been reviewed and approved by the Board of Directors on the recommendation of the Audit Committee. 

 The financial statements have been audited by PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l., the independent auditors, in accordance with the Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States) on behalf of the shareholders. The external auditors have full and free access to the Audit Committee. 

**Internal Control over Financial Reporting**

 Virginia Mines’ management is responsible for establishing and maintaining adequate internal control over financial reporting. Virginia Mines’ internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. 

 Virginia Mines’ internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of Virginia Mines’ assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of Virginia Mines; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of Virginia Mines’ assets that could have a material effect on the financial statements. 

 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 

 Management conducted an evaluation of the effectiveness of Virginia Mines’ internal control over financial reporting based on the criteria established in *Internal Control*—*Integrated Framework*issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). 

 Based on the evaluation and identification of a material weakness described thereafter, the management concluded that as February 28, 2009, Virginia Mines’ internal control over financial reporting was not effective. 

 A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of Virginia Mines’ annual financial statements will not be prevented or detected on a timely basis**.**

----

As at February 28, 2009, a material weakness was identified after a review by the *Securities Exchange Commission* of Virginia Mines’ financial statements of fiscal year 2008. Virginia Mines did not maintain effective controls over the application of US GAAP. Particularly, the company has failed to correctly apply rule EITF 04-02, *Whether Mineral Rights are Tangible or Intangible Assets Related Issues* with respect to the acquisition of mineral properties and mineral rights. As a result, Virginia Mines has adjusted its financial statements for fiscal years ended February 29, 2008 and February 28, 2007. Unless remediated, this deficiency could result in a material misstatement in the US GAAP note presented in Virginia Mines’ financial statements that would not be prevented nor detected . 

 The effectiveness of the Company’s internal control over financial reporting as at February 28, 2009 has been audited by PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l., the independent auditors, as stated in their report which appears herein. 

| *(s) André Gaumond***,** & CEO       André Gaumond |   | *(s) Robin Villeneuve,*CFO      Robin Villeneuve |
|----------------------------------------------------------------------|--------|--------------------------------------------------|

----

**Independent Auditors' Report**

**To the Shareholders of      Virginia Mines Inc.**

  We have completed integrated audits of Virginia Mines Inc.'s 2009 and 2008 financial statements and  of its internal control over financial reporting as at February 28, 2009 and an audit of its 2007 financial  statements. Our opinions, based on our audits, are presented below.

**Financial statements**

 We have audited the accompanying balance sheets of Virginia Mines Inc. as at February 28, 2009 and  February 29, 2008, and the related statements of earnings (loss), comprehensive loss, changes in  shareholders' equity and cash flows for each of the years in the three-year period ended February 28,  2009. These financial statements are the responsibility of the Company's management. Our  responsibility is to express an opinion on these financial statements based on our audits.

  We conducted our audits of the Company's financial statements in accordance with Canadian generally  accepted auditing standards and the standards of the Public Company Accounting Oversight Board  (United States). We conducted our audit of the Company's financial statements for the year ended    February 28, 2007 in accordance with Canadian generally accepted accounting principles. Those    standards require that we plan and perform an audit to obtain reasonable assurance about whether the    financial statements are free of material misstatement. An audit of financial statements includes    examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.    A financial statement audit also includes assessing the accounting principles used and significant  estimates made by management, and evaluating the overall financial statement presentation. Webelieve that our audits provide a reasonable basis for our opinion.

  In our opinion, the financial statements referred to above present fairly, in all material respects, the  financial position of the Company as at February 28, 2009 and February 29, 2008 and the results of its  operations and its cash flows for each of the years in the three-year period ended February 28, 2009 in  accordance with Canadian generally accepted accounting principles.

----

As discussed in Note 20, the Company has restated certain amounts presented in its 2008 and 2007reconciliations to United States generally accepted accounting principles.

**Internal control over financial reporting**

  We have also audited Virginia Mines Inc.'s internal control over financial reporting as at February 28,  2009, based on criteria established in *Internal Control – Integrated Framework* issued by the  Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's  management is responsible for maintaining effective internal control over financial reporting and for its  assessment of the effectiveness of internal control over financial reporting, included in the  accompanying "Management's Report on Internal Control over Financial Reporting". Our  responsibility is to express an opinion on the Company's internal control over financial reporting based  on our audit.

  We conducted our audit of internal control over financial reporting in accordance with the standards  of the Public Company Accounting Oversight Board (United States). Those standards require that we  plan and perform the audit to obtain reasonable assurance about whether effective internal control  over financial reporting was maintained in all material respects. An audit of internal control over  financial reporting includes obtaining an understanding of internal control over financial reporting,  assessing the risk that a material weakness exists, testing and evaluating the design and operating  effectiveness of internal control based on the assessed risk, and performing such other procedures as  we considered necessary in the circumstances. We believe that our audit provides a reasonable basis  for our opinion.

  A company's internal control over financial reporting is a process designed to provide reasonable  assurance regarding the reliability of financial reporting and the preparation of financial statements for  external purposes in accordance with generally accepted accounting principles. A company's internal  control over financial reporting includes those policies and procedures that (i) pertain to the  maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and  dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are  recorded as necessary to permit preparation of financial statements in accordance with generally  accepted accounting principles, and that receipts and expenditures of the company are being made only  in accordance with authorizations of management and directors of the company; and (iii) provide  reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or  disposition of the company's assets that could have a material effect on the financial statements.  

Because of its inherent limitations, internal control over financial reporting may not prevent or detect    misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the    risk that controls may become inadequate because of changes in conditions, or that the degree of    compliance with the policies or procedures may deteriorate.

----

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial  reporting, such that there is a reasonable possibility that a material misstatement of the annual financial  statements will not be prevented or detected on a timely basis. In its assessment, a material weakness  was identified relating to the misapplication of US GAAP for purposes of preparing reconciliations  from Canadian generally accepted accounting principles to accounting principles generally accepted in  the United States, as described in the Management's Report on Internal Control over FinancialReporting.

  We considered this material weakness in determining the nature, timing and extent of audit tests  applied in our audit of the February 28, 2009 financial statements, and our opinion regarding the  effectiveness of the Company's internal control over financial reporting does not affect our opinion on  those financial statements.

  In our opinion, the Company did not maintain, in all material respects, effective internal control over  financial reporting as at February 28, 2009 based on criteria established in *Internal Control – Integrated  Framework* issued by the COSO. 

|  | 1 |
|--|---|

Québec, Quebec, Canada  May 14, 2009

 

1 Chartered accountant auditor permit No. 7871****

(v)

----

 

| **Virginia Mines Inc.**                                                     |                                      |                        |         |
|-----------------------------------------------------------------------------|-------------------------------------------|-----------------------------|--------------|
| (an exploration company)                                                    |                                      |                        |         |
| Balance Sheets                                                              |                                      |                        |         |
|                                                                        |                                      |                        |         |   |
| (expressed in Canadian dollars)                                             |                                      |                        |         |
|                                                                        |                                      | **As at February 28,** |              | **As at February 29,** |
|                                                                        |                                      |                             |
|                                                                        |                                      | **2009**                    |              | **2008** |
|                                                                        |                                      | **$**                       |              | **$** |
| **Assets**                                                                  |                                           |                             |              |
| **Current assets**                                                          |                                           |                             |              |
| Cash and cash equivalents                                                   | 7,633,221                                 |                             | 8,665,254    |
| Short-term investments (note 3)                                             | 26,536,059                                |                             | 36,194,101   |
| Tax credits for mining exploration and commodity taxes receivable (note 4)  | 5,301,050                                 |                             | 6,831,873    |
| Other amounts receivable                                                    | 134,038                                   |                             | 180,476      |
| Prepaid expenses                                                            | 73,647                                    |                             | 128,484      |
|                                                                        |                                      | 39,678,015                  |              | 52,000,188 |
|                                                                        |                                      |                             |              |  |
| **Long-term investments** (note 5)                                          | 1,212,000                                 |                             | 1,444,000    |
| **Property, plant and equipment**, at cost less accumulated depreciation of |                                           |                             |              |
|                                                                        | $71,339 ($41,411 as at February 29, 2008) | 122,689                     |              | 134,840 |
| **Mining properties**(note 7)                                               | 27,074,379                                |                             | 14,896,717   |
|                                                                        |                                      | 68,087,083                  |              | 68,475,745 |
| **Liabilities**                                                             |                                           |                             |              |
| **Current liabilities**                                                     |                                           |                             |              |
| Accounts payable and accrued liabilities                                    |                                           |                             |              |
|                                                                        | Companies held by Directors (note 12)     | 11,500                      |              | 175,286 |
|                                                                        | Other                                     | 1,200,483                   |              | 3,719,989 |
|                                                                        |                                      | 1,211,983                   |              | 3,895,275 |
| **Shareholders' Equity**                                                    |                                           |                             |              |
| **Share capital** (note 8)                                                  | 106,162,531                               |                             | 98,204,815   |
| **Warrants** (note 9)                                                       | 26,962                                    |                             | -            |
| **Stock options** (note 10a)                                                | 4,745,715                                 |                             | 3,966,778    |
| **Contributed surplus**                                                     | 142,038                                   |                             | 29,481       |
| **Deficit**                                                                 | (43,246,993)                              |                             | (39,638,943) |
| **Accumulated other comprehensive income (loss)**                           | (955,153)                                 |                             | 2,018,339    |
|                                                                        |                                      | 66,875,100                  |              | 64,580,470 |
|                                                                        |                                      | 68,087,083                  |              | 68,475,745 |
| **Commitments** (note 17)                                                   |                                      |                        |         |
| **Subsequent events** (note 19)                                             |                                      |                        |         |
| The accompanying notes are an integral part of these financial statements.  |                                      |                        |         |

| **Approved by the Board, (s) André Gaumond,** Director |   | **(s) André Lemire,**Director |
|---------------------------------------------------------------|--------|--------------------------------------|

----

| **Virginia Mines Inc.**                                                    |                                               |             |        |             |
|----------------------------------------------------------------------------|----------------------------------------------------|------------------|-------------|------------------|
| (an exploration company)                                                   |                                               |             |        |             |
| Statements of Earnings (Loss)                                              |                                               |             |        |             |
|                                                                       |                                               |             |        |             |   |
| (expressed in Canadian dollars)                                            |                                               |             |        |             |
|                                                                       |                                               |             |        |             |   |
|                                                                       |                                               | **Year ended**   |        | **Year ended**   | **Year ended** |
|                                                                       |                                               | **February 28,** |        | **February 29,** | **February 28,** |
|                                                                       |                                               | **2009**         |        | **2008**         | **2007** |
|                                                                       |                                               | **$**            |        | **$**            | **$** |
| **General and administrative expenses**                                    |                                                    |             |             |                  |
| Salaries                                                                   | 888,207                                            |             | 186,729     | 91,193           |
| Professional and maintenance fees                                          | 500,731                                            |             | 364,658     | 317,499          |
| Management fees (note 12)                                                  | -                                                  |             | 300,000     | 182,144          |
| Rent, office expenses and other                                            | 745,268                                            |             | 1,141,316   | 1,125,269        |
| Stock-based compensation (note 10a)                                        | 972,247                                            |             | 1,295,004   | 3,290,637        |
| Depreciation of property, plant and equipment                              | 29,928                                             |             | 17,753      | 4,284            |
| General exploration costs                                                  | 308,167                                            |             | 431,187     | 403,047          |
| Grants, credit on duties refundable for loss and refundable tax credit     |                                                    |             |             |                  |
|                                                                       | for resources                                      | (138,190)        |        | (200,925)        | (176,870) |
| Cost of mining properties abandoned or written off (note 7)                | 2,048,494                                          |             | 611,511     | 1,909,273        |
|                                                                       |                                               | 5,354,852        |        | 4,147,233        | 7,146,476 |
|                                                                            |                                               |                  |        |                  |  |
| **Other income (expenses)**                                                |                                                    |             |             |                  |
| Dividends and interest                                                     | 1,528,653                                          |             | 1,970,287   | 1,703,103        |
| Fees invoiced to partners                                                  | 919,465                                            |             | 1,107,980   | 293,869          |
| Option payments received in excess of cost of mining properties            | 14,238                                             |             | -           | 4,338,141        |
| Gain on sale of mining properties                                          | 11,458                                             |             | 6,360,000   | 319,198          |
| Gain on sale of short-term investments                                     | -                                                  |             | -           | 1,009,767        |
| Gain on sale of available-for-sale investments                             | 307,792                                            |             | 2,073,639   | -                |
| Loss on investments held for trading                                       | (129,394)                                          |             | (5,381,766) | -                |
| Loss on investments designated as held for trading                         | (306,579)                                          |             | (94,613)    | -                |
| Other than temporary write-down of short-term investments                  | -                                                  |             | -           | (298,960)        |
| Other than temporary write-down on available-for-sale investments          | (1,347,984)                                        |             | (2,128,034) | -                |
|                                                                       | 997,649                                            |             | 3,907,493   | 7,365,118        |
| **Earnings (loss) before income taxes and the discontinued operation**     | (4,357,203)                                        |             | (239,740)   | 218,642          |
| **Future income taxes**(note 13)                                           | 749,153                                            |             | (146,014)   | -                |
| **Net earnings (net loss) from continuing operations**                     | (3,608,050)                                        |             | (385,754)   | 218,642          |
| **Net loss from the discontinued operation**(note 14)                      | -                                                  |             | -           | (637,494)        |
| **Net loss**                                                               | (3,608,050)                                        |             | (385,754)   | (418,852)        |
| **Per share (basic and diluted)**(note 15)                                 |                                                    |             |             |                  |
|                                                                       | Net earnings (net loss) from continuing operations | (0.130)          |        | (0.014)          | 0.009 |
|                                                                       | Net loss from the discontinued operation           | -                |        | -                | (0.025) |
|                                                                            | **Net loss**                                       | (0.130)          |        | (0.014)          | (0.016) |
|                                                                       |                                               |             |        |             |   |
| The accompanying notes are an integral part of these financial statements. |                                               |             |        |

----

| **Virginia Mines Inc.**                                                    |                                                                  |             |        |             |
|----------------------------------------------------------------------------|-----------------------------------------------------------------------|------------------|-------------|------------------|
| (an exploration company)                                                   |                                                                  |             |        |             |
| Statement of Comprehensive Loss                                            |                                                                  |             |        |             |
|                                                                       |                                                                  |             |        |             |   |
| (expressed in Canadian dollars)                                            |                                                                  |             |        |             |
|                                                                       |                                                                  |             |        |             |   |
| **Comprehensive loss**                                                     |                                                                  |             |        |             |
|                                                                       |                                                                  | **Year ended**   |        | **Year ended**   | **Year ended** |
|                                                                       |                                                                  | **February 28,** |        | **February 29,** | **February 28,** |
|                                                                       |                                                                  | **2009**         |        | **2008**         | **2007** |
|                                                                       |                                                                  | **$**            |        | **$**            | **$** |
|                                                                       |                                                                  |             |        |             |   |
| **Net loss**                                                               | (3,608,050)                                                           |             | (385,754)   | (418,852)        |
| **Other Comprehensive Loss**                                               |                                                                       |             |             |                  |
|                                                                       | Unrealized loss on available-for-sale investments,                    |                  |        |                  |  |
|                                                                       | net of related income taxes of $448,740 ($2,401 in 2008)              | (3,795,824)      |        | (12,958)         | - |
|                                                                       | Reclassification of other than temporary declines in value on         |                  |        |                  |  |
|                                                                       | available-for-sale investments to net earnings (loss), net of related |                  |        |                  |  |
|                                                                       | income taxes of $144,040 ($180,479 in 2008)                           | 1,048,447        |        | 974,273          | - |
|                                                                       | Reclassification of gain on available-for-sale investments realized   |                  |        |                  |  |
|                                                                       | upon sale to net earnings (loss), net of related income taxes of      |                  |        |                  |  |
|                                                                       | $81,677 ($324,092 in 2008)                                            | (226,115)        |        | (1,749,537)      | - |
|                                                                       |                                                                  | (2,973,492)      |        | (788,222)        | - |
| **Comprehensive Loss**                                                     | (6,581,542)                                                           |             | (1,173,976) | (418,852)        |
|                                                                       |                                                                  |             |        |             |   |
| The accompanying notes are an integral part of these financial statements. |                                                                  |             |        |

----

| **Virginia Mines Inc.**                                                    |                                      |             |   |             |
|----------------------------------------------------------------------------|-------------------------------------------|------------------|--------|------------------|
| (an exploration company)                                                   |                                      |             |   |             |
| Statement of Changes in Shareholders' Equity                               |                                      |             |   |             |
|                                                                       |                                      |             |   |             |   |
| (expressed in Canadian dollars)                                            |                                      |             |   |             |
|                                                                       |                                      |             |   |             |   |
|                                                                       |                                      | **Year ended**   |   | **Year ended**   | **Year ended** |
|                                                                       |                                      | **February 28,** |   | **February 29,** | **February 28,** |
|                                                                       |                                      | **2009**         |   | **2008**         | **2007** |
|                                                                       |                                      | **$**            |   | **$**            | **$** |
| **Share capital**(note 8)                                                  |                                      |             |   |             |
|                                                                       | **Balance - beginning of year**           | 98,204,815       |   | 94,447,526       | 85,471,959 |
|                                                                       | Warrants exercised                        | -                |   | 3,088,620        | 944,540 |
|                                                                       | Stock options exercised                   | 204,002          |   | 572,027          | 588,887 |
|                                                                       | Unit options exercised                    | -                |   | -                | 431,468 |
|                                                                       | Warrants (units) exercised                | -                |   | -                | 80,277 |
|                                                                       | Acquisition of a mining property          | 4,750,000        |   | 99,000           | 2,168,769 |
|                                                                       | Issuance of shares for cash consideration | 4,500,000        |   | -                | 4,786,279 |
|                                                                       | Share issue expenses (note 11b)           | (1,496,286)      |   | (2,358)          | (24,653) |
|                                                                       | **Balance - end of year**                 | 106,162,531      |   | 98,204,815       | 94,447,526 |
|                                                                       |                                      |                  |   |                  |  |
| **Warrants** (note 9)                                                      |                                           |             |        |                  |
|                                                                       | **Balance - beginning of year**           | -                |   | 261,114          | 446,117 |
|                                                                       | Granted                                   | 26,962           |   | -                | 261,114 |
|                                                                       | Exercised                                 | -                |   | (261,114)        | (443,675) |
|                                                                       | Expired                                   | -                |   | -                | (2,442) |
|                                                                       | **Balance - end of year**                 | 26,962           |   | -                | 261,114 |
|                                                                       |                                      |                  |   |                  |  |
| **Stock options** (note 10a)                                               |                                           |             |        |                  |
|                                                                       | **Balance - beginning of year**           | 3,966,778        |   | 2,895,074        | - |
|                                                                       | Stock-based compensation                  | 972,247          |   | 1,295,004        | 3,290,637 |
|                                                                       | Exercised                                 | (80,753)         |   | (219,847)        | (377,152) |
|                                                                       | Expired                                   | (112,557)        |   | (3,453)          | (18,411) |
|                                                                       | **Balance - end of year**                 | 4,745,715        |   | 3,966,778        | 2,895,074 |
|                                                                       |                                      |                  |   |                  |  |
| **Unit options** (note 10b)                                                |                                           |             |        |                  |
|                                                                       | **Balance - beginning of year**           | -                |   | -                | 101,178 |
|                                                                       | Exercised                                 | -                |   | -                | (101,178) |
|                                                                       | **Balance - end of year**                 | -                |   | -                | - |
|                                                                       |                                      |                  |   |                  |  |
| **Warrants (units)** (note 10c)                                            |                                           |             |        |                  |
|                                                                       | **Balance - beginning of year**           | -                |   | -                | - |
|                                                                       | Further to the exercise of unit options   | -                |   | -                | 62,203 |
|                                                                       | Exercised                                 | -                |   | -                | (58,302) |
|                                                                       | Expired                                   | -                |   | -                | (3,901) |
|                                                                       | **Balance - end of year**                 | -                |   | -                | - |
|                                                                       |
| The accompanying notes are an integral part of these financial statements. |

----

| **Virginia Mines Inc.**                                                                                                                    |                                                 |             |   |             |
|--------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------|------------------|--------|------------------|
| (an exploration company)                                                                                                                   |                                                 |             |   |             |
| Statement of Changes in Shareholders' Equity                                                                                               |                                                 |             |   |             |
|                                                                                                                                       |                                                 |             |   |             |   |
| (expressed in Canadian dollars)                                                                                                            |                                                 |             |   |             |
|                                                                                                                                       |                                                 |             |   |             |   |
|                                                                                                                                       |                                                 | **Year ended**   |   | **Year ended**   | **Year ended** |
|                                                                                                                                       |                                                 | **February 28,** |   | **February 29,** | **February 28,** |
|                                                                                                                                       |                                                 | **2009**         |   | **2008**         | **2007** |
|                                                                                                                                       |                                                 | **$**            |   | **$**            | **$** |
| **Contributed surplus**                                                                                                                    |                                                 |             |   |             |
|                                                                                                                                       | **Balance - beginning of year**                      | 29,481           |   | 26,028           | 1,274 |
|                                                                                                                                       | Warrants expired                                     | -                |   | -                | 2,442 |
|                                                                                                                                       | Stock options expired                                | 112,557          |   | 3,453            | 18,411 |
|                                                                                                                                       | Warrants (units) expired                             | -                |   | -                | 3,901 |
|                                                                                                                                       | **Balance - end of year**                            | 142,038          |   | 29,481           | 26,028 |
|                                                                                                                                       |                                                 |                  |   |                  |  |
| **Deficit**                                                                                                                                |                                                      |             |        |                  |
|                                                                                                                                       | **Balance - beginning of year**                      | (39,638,943)     |   | (41,445,011)     | (25,052,049) |
|                                                                                                                                       | Transfer of Eleonore property's net assets and       |                  |   |                  |  |
|                                                                                                                                       | elimination of future income tax assets              | -                |   | -                | (15,974,110) |
|                                                                                                                                       | Impact of adopting new accounting standards (note 2) | -                |   | 2,191,822        | - |
|                                                                                                                                       | Net loss                                             | (3,608,050)      |   | (385,754)        | (418,852) |
|                                                                                                                                       | **Balance - end of year**                            | (43,246,993)     |   | (39,638,943)     | (41,445,011) |
|                                                                                                                                       |                                                 |                  |   |                  |  |
| **Accumulated other comprehensive income (loss)**                                                                                          |                                                      |             |        |                  |
|                                                                                                                                       | **Balance - beginning of year**                      | 2,018,339        |   | -                | - |
|                                                                                                                                       | Impact of adopting new accounting standards (note 2) | -                |   | 2,806,561        | - |
|                                                                                                                                       | Other comprehensive loss                             | (2,973,492)      |   | (788,222)        | - |
|                                                                                                                                       | **Balance - end of year**                            | (955,153)        |   | 2,018,339        | - |
|                                                                                                                                       |                                                 |             |   |             |   |
|                                                                                                                                       |                                                 |             |   |             |   |
| Deficit and accumulated other comprehensive income (loss) as at February 28, 2009 total $44,202,146 ($37,620,604 as at February 29, 2008). |
| The accompanying notes are an integral part of these financial statements.                                                                 |                                                 |             |   |

----

| **Virginia Mines Inc.**                                                   |                                                              |             |        |             |
|---------------------------------------------------------------------------|-------------------------------------------------------------------|------------------|-------------|------------------|
| (an exploration company)                                                  |                                                              |             |        |             |
| Statements of Cash Flows                                                  |                                                              |             |        |             |
|                                                                      |                                                              |             |        |             |   |
| (expressed in Canadian dollars)                                           |                                                              |             |        |             |
|                                                                      |                                                              | **Year ended**   |             | **Year ended**   | **Year ended** |
|                                                                      |                                                              | **February 28,** |             | **February 29,** | **February 28,** |
|                                                                      |                                                              | **2009**         |             | **2008**         | **2007** |
|                                                                      |                                                              | **$**            |             | **$**            | **$** |
| **Cash flows from (used in) operating activities**                        |                                                              |             |        |             |
| Net earnings (net loss) from continuing operations                        | (3,608,050)                                                       |             | (385,754)   | 218,642          |
| Items not affecting cash and cash equivalents                             |                                                              |             |        |             |
|                                                                      | Future income taxes                                               | (749,153)        |        | 146,014          | - |
|                                                                      | Other than temporary write-down on available-for-sale investments | 1,347,984        |        | 2,128,034        | - |
|                                                                      | Other than temporary write-down on short-term investments         | -                |        | -                | 298,960 |
|                                                                      | Loss on investments designated as held for trading                | 306,579          |        | 94,613           | - |
|                                                                      | Loss on investments held for trading                              | 277,320          |        | 5,381,766        | - |
|                                                                      | Gain on sale of available-for-sale investments                    | (307,792)        |        | (2,073,639)      | - |
|                                                                      | Gain on sale of short-term investments                            | -                |        | -                | (1,009,767) |
|                                                                      | Gain on sale of mining properties                                 | (11,458)         |        | (6,360,000)      | (319,198) |
|                                                                      | Option payments received in excess of cost of mining properties   | (14,238)         |        | -                | (4,338,141) |
|                                                                      | Cost of mining properties abandoned or written off                | 2,048,494        |        | 611,511          | 1,909,273 |
|                                                                      | Depreciation of property, plant and equipment                     | 29,928           |        | 17,753           | 4,284 |
|                                                                      | Stock-based compensation                                          | 972,247          |             | 1,295,004        | 3,290,637 |
|                                                                      |                                                              | 291,861          |             | 855,302          | 54,690 |
|                                                                      |                                                                   |                  |             |                  |
| Net change in non-cash working capital items (note 11a)                   | (810,572)                                                         |                  | (962,346)   | 3,283,682        |
| Cash flows from (used in) continuing operations activities                | (518,711)                                                         |                  | (107,044)   | 3,338,372        |
| Cash flows used in the discontinued operating activity (note 14)          | -                                                                 |                  | -           | (1,802,127)      |
|                                                                      |                                                              | (518,711)        |             | (107,044)        | 1,536,245 |
| **Cash flows from financing activities**                                  |                                                                   |                  |             |                  |
| Issuance of common shares, net of share issue expenses                    | 4,289,455                                                         |                  | 3,177,328   | 6,149,808        |
|                                                                      |                                                              |                  |             |                  |  |
| **Cash flows used in investing activities**                               |                                                                   |                  |             |                  |
| Net disposition (acquisition) of short-term investments                   | 4,917,582                                                         |                  | 5,694,717   | (7,992,521)      |
| Reclassification of cash equivalents to long-term investments             | -                                                                 |                  | (3,899,387) | -                |
| Acquisition of mining properties and capitalized exploration costs        | (14,843,386)                                                      |                  | (9,618,429) | (4,291,531)      |
| Change in credit on duties refundable for loss and refundable tax credit  |                                                                   |                  |             |                  |
|                                                                      | related to exploration costs applied against mining properties    | 5,180,717        |             | 6,973,228        | 652,485 |
| Acquisition of property, plant and equipment                              | (117,690)                                                         |                  | (39,174)    | (3,666)          |
| Proceeds from disposal of mining properties                               | -                                                                 |                  | -           | 15,000           |
| Option payments received                                                  | 60,000                                                            |                  | 344,472     | 90,001           |
| Cash flows used in continuing investing activities                        | (4,802,777)                                                       |                  | (544,573)   | (11,530,232)     |
|                                                                      |                                                              |                  |             |                  |  |
| Cash flows used in the discontinued investing activity (note 14)          | -                                                                 |                  | -           | (472,189)        |
|                                                                      |                                                              | (4,802,777)      |             | (544,573)        | (12,002,421) |
|                                                                           |                                                              |                  |             |                  |  |
| **Net change in cash and cash equivalents**                               | (1,032,033)                                                       |                  | 2,525,711   | (4,316,368)      |
| **Cash and cash equivalents - Beginning of year**                         | 8,665,254                                                         |                  | 6,139,543   | 10,455,911       |
| **Cash and cash equivalents - End of year**(note 11c)                     | 7,633,221                                                         |                  | 8,665,254   | 6,139,543        |
|                                                                      |                                                              |             |        |             |   |
| **Supplemental information**(note 11b)                                    |                                                              |             |        |             |
|                                                                      |                                                              |             |        |             |   |
|                                                                      |                                                              |             |        |             |   |
|                                                                      |                                                              |             |        |             |   |
|                                                                      |                                                              |             |        |             |   |
| The accompanying notes are an integral part of these financial statements |

----

**Virginia Mines Inc.**  (an exploration company)  Notes to Financial Statements(expressed in Canadian dollars)

**1 Incorporation and Nature of Operations**

> 
 The company, incorporated under the Canada Business Corporations Act, is in the business of acquiring and exploring mining    properties. It has not yet determined whether its properties contain ore reserves that are economically recoverable. The    recoverability of the amounts shown for mining properties is dependent upon the existence of economically recoverable ore    reserves, the ability of the company to obtain necessary financing to continue the exploration and development of its properties,    and upon future profitable production or proceeds from the disposal of properties.

**2 Summary of Significant Accounting Policies**

> 
**Basis of Presentation**

 These financial statements have been prepared in accordance with Canadian generally acepted accounting principles ("GAAP").    Note 20 describes the significant differences of measurement between Canadian GAAP and U.S. GAAP as it relates to the    company. The significant accounting policies, which have been consistently applied, are summarized as follows.

**Use of Estimates**

The preparation of financial statements in conformity with Canadian GAAP requires management to make estimates and    assumptions that affect the amounts of assets and liabilities reported in the financial statements. Those estimates and    assumptions also affect the disclosure of contingencies at the date of the financial statements and the reported amounts of    revenues and expenses for the reporting periods. Significant estimates include the valuation of credit on duties refundable for    loss and the refundable tax credit for resources, future income tax assets and liabilities, the recoverability of short-term    investments and the mining properties, the valuation of long-term investments, the fair value of stock options granted, and    certain liabilities. Actual results could differ from those estimates.

**Cash and Cash Equivalents**

 Cash and cash equivalents consist of cash on hand, balances with banks and highly liquid short-term investments with original    maturities of three months or less at the acquisition date.

**Short-Term Investments**

 Short-term investments consist primarily of bonds, trust units, convertible debentures and investments in public companies that    do not meet the definition of cash and cash equivalents.

    In accordance with the requirements of Section 3855 of the Canadian Institute of Chartered Accountants Handbook ("CICA"),    *Financial Instruments - Recognition and Measurement*, adopted by the company as of March 1, 2007, short-term investments    that are bonds, trust units or investments in public companies are classified as available-for-sale investments. Convertible    debentures and warrants held by the company are classified as investments held for trading.

Prior to March 1, 2007, short-term investments were stated at the lower of amortized cost and market value.

7

----

**Virginia Mines Inc.**  (an exploration company)Notes to Financial Statements

  (expressed in Canadian dollars)

> 
**Financial Instruments**

 The standards require that financial assets and financial liabilities, including derivative financial instruments, be initially    measured at fair value. Subsequent to initial recognition, financial assets and financial liabilities are measured based on their    classification : held for trading, available for sale, loans and receivables or other than held-for-trading liabilities.
- Held for trading  - Financial assets and financial liabilities required to be classified or designated as held for trading are      measured at fair value, with gains, losses and transaction costs recorded in net earnings for the period in which they      arise. Section 3855 allows an entity to designate any financial instrument as held for trading on initial recognition or      adoption of the accounting standard if reliable fair values are available, even if that instrument would not otherwise    satisfy the definition of a security held for trading. Transaction costs are recorded immediately in net earnings.

   
- Available for sale  - Financial assets classified as available for sale are measured at fair value. Unrealized gains and        losses, are recognized directly in other comprehensive income, except for other than temporary impairment losses, which        are recognized in net earnings. Upon derecognition of the financial asset, the accumulated gains or losses previously        recognized in accumulated other comprehensive income are reclassified to net earnings. Transaction costs are added to      the carrying amount of the financial instrument. 

Available-for-sale securities are reviewed on a regular basis to determine whether there has been a decline in value that is      other than temporary. For the purpose of measuring any decline in value, the company takes into account many facts      proper to each investment as well as all the factors that encompass, without being inclusive, a significant or prolonged      decline in fair value, important financial distress of the issuer, a breach of contract, an increasing risk of issuer's      bankruptcy or restructuration, and disappearance of an active market for the financial asset concerned.
- Loans and receivables  - Financial assets classified as loans and receivable are measured at amortized cost using the    effective interest method, which corresponds to par value due to their short-term maturity.

 
- Other than held-for-trading liabilities  - Financial liabilities classified as other than held for trading are measured at    amortized cost using the effective interest method, which corresponds to par value due to their short-term to maturity.

**Transitional Adjustment**

 On March 1, 2007, the company made adjustments to all its financial instruments in the balance sheet. These adjustments made to    the previous fair value of warrants and convertible debentures have been recognized as an adjustment to the opening balance of    deficit and all adjustments to initial fair value of bonds, trust units and shares have been recognized to the opening balance of the    comprehensive income, net of related income taxes. The following table presents the impact of the new accounting standards on    the balance sheet.

----

| **Virginia Mines Inc.**         |   |   |   |   |
|---------------------------------|--------|--------|--------|--------|
| (an exploration company)        |   |   |   |   |
| Notes to Financial Statements   |   |   |   |   |
|                            |   |   |   |   |   |
| (expressed in Canadian dollars) |   |   |   |   |

|   |                                                                                                | **As at    February 28,    2007** | **Impact of      adopting new      accounting      standards** |        | **As at       March 1,       2007** |
|--------|-----------------------------------------------------------------------------------------------------|----------------------------------------|--------------------------------------------------------------------------|--------|------------------------------------------|
|   |                                                                                                |                                        |
|   |                                                                                                |
|   |                                                                                                | **$**                                  | **$**                                                                    |        | **$**                                    |
|   | **Assets**                                                                                          |                                   |                                                                     |   |                                     |
|   | Short-term investments                                                                              | 34,496,012                             | 4,998,383                                                                |   | 39,494,395                               |
|   |                                                                                                |                                        |                                                                          |        |                                          |
|   | **Shareholders' Equity**                                                                            |                                        |                                                                          |        |                                          |
|   | Deficit                                                                                             | (41,445,011)                           | 2,191,822                                                                |        | (39,253,189)                             |
|   | Accumulated other comprehensive income                                                              | -                                      | 2,806,561                                                                | (1)    | 2,806,561                                |
|   |                                                                                                |                                        |                                                                          |        |                                          |
|   | **Impact on Shareholders' Equity**                                                                  | (41,445,011)                           | 4,998,383                                                                |   | (36,446,628)                             |
|   |                                                                                                |                                   |                                                                     |   |                                     |
|   | (1) This amount is net of related income taxes of $600,493, which are accounted for in the deficit. |

> 
**Property, Plant and Equipment and Depreciation**

 Property, plant and equipment are recorded at cost less accumulated depreciation, and are depreciated using the declining    balance method at the rates of 20% for office equipment and 30% for field equipment.

**Mining Properties**

 The company records its interests in mining properties and areas of geological interest at cost less option payments received and    other recoveries. Exploration costs related to these interests and projects are capitalized on the basis of specific claim blocks or    areas of geological interest until the mining properties to which they relate are placed into production, sold or abandoned.    Management reviews for impairment the carrying amount of mining properties on a regular basis. These costs will be amortized    over the estimated useful life of mining properties following commencement of production or written off if the mining    properties are sold or projects are abandoned. General exploration costs not related to specific mining properties are expensed    as incurred.

 Although management has taken actions to verify the ownership rights for mining properties in which the company owns an    interest in accordance with industry standards for the current exploration phase of these properties, these procedures give no    assurance to the company as to title. The title to property may be subject to unrecognized prior agreements and not compliant    with regulatory requirements.

**Credit on Duties Refundable for Loss and Refundable Tax Credit for Resources**

 The company is entitled to a credit on duties refundable for loss under the *Mining Duties Act*. This credit on duties refundable    for loss on mining exploration expenses incurred in the province of Quebec at a rate of 12% has been applied against the costs    incurred.

 Furthermore, the company is entitled to a refundable tax credit for resources for mining companies on qualified expenditures    incurred. The refundable tax credit for resources may reach 38.75%. This tax credit has been applied against the costs incurred.

----

**Virginia Mines Inc.**  (an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

> 
**Asset Retirement Obligations**

 The company follows the recommendations of the CICA in accounting for asset retirement obligations. Under its standard, the    fair values of asset retirement obligations are recorded as liabilities on a discounted basis with a risk-free interest rate when they    are incurred. Amounts recorded for the related assets are increased by the amount of these obligations. Over time, the liabilities    will be accreted for the change in their present value and the initial capitalized costs will be depleted and amortized over the    useful lives of the related assets. As at February 28, 2009, the company has no asset retirement obligations.

**Share Capital**

 Shares issued pursuant to flow-through financing agreements and for the acquisition of mining properties are recorded at their    fair market value. Upon the acquisition of mining properties, the carrying value may exceed the tax basis since the company    renounces the deductions in favour of the investors concerned. Future income taxes arising from the difference between the    carrying amount and the tax basis are recorded as share issue expenses.

 Share issue expenses and future income taxes arising from the difference between the carrying value and the tax basis of    exploration costs are applied against share capital.

**Income Taxes**

 The company provides for income taxes using the liability method. Under this method, future income tax assets and liabilities    are determined based on deductible or taxable temporary differences between financial statement values and tax values of assets    and liabilities using enacted or substantively enacted income tax rates expected to be in effect for the period in which the    differences are expected to reverse.

 The company establishes a valuation allowance against future income tax assets if, based on available information, it is more    likely than not that some or all of the future income tax assets will not be realized.

**Flow-Through Shares**

 The company finances, when appropriate, some exploration work through the issuance of flow-through shares. The resource    expenditure deductions for income tax purposes are renounced to investors in accordance with the appropriate income tax    legislation. The company recognizes future income tax liabilities and reduces share capital when the expenditures are renounced    with the tax legislation.

**Basic and Diluted Earnings per Share**

 Basic earnings per share are calculated using the weighted average number of participating shares outstanding during the year.

 Diluted earnings per share are calculated using the weighted average number of participating shares outstanding during the year,    plus the effects of dilutive potential participating shares outstanding during the year. The calculation of diluted earnings per    share is made using the treasury stock method, as if all dilutive potential shares had been issued at the later of the beginning of    the year or the date of issuance, as the case may be, and as if the funds obtained thereby had been used to purchase participating    shares of the company at the average quoted market value of the participating shares during the year.

----

**Virginia Mines Inc.**  (an exploration company)Notes to Financial Statements

(expressed in Canadian dollars)

> 
**Stock-Based Compensation Plan**

 The company has established a stock-based compensation plan, which is described in note 10a. Any consideration received from    plan members upon the exercise of stock options is credited to share capital. The company accounts for compensation costs for    all forms of stock-based compensation awarded to employees and non-employees, including stock options, using a fair value    based method.

**New Accounting Standards**

**Section 1400, General Standards of Financial Statement Presentation**

 On March 1, 2008, the company adopted Section 1400, *General Standards of Financial Statement Presentation*. This Section    has been amended to include requiremements to assess and disclose an entity's ability to continue as a going concern (going    concern assumption). The adoption of this Section had no impact on the financial statements of the company.

**Section 1535, Capital Disclosures**

 On March 1, 2008, the company adopted Section 1535, *Capital Disclosures*. This Section establishes standards for disclosing    information about an entity's capital. The information will enable users of its financial statements to evaluate its objectives,    policies and processes for managing capital. An entity will also disclose whether it complies with capital requirements to which    it is subject and the consequences of non-compliance. The required disclosures are contained in note 16.

**Section 3862, Financial Instruments - Disclosures and Section 3863, Financial Instruments - Presentation**

 On March 1, 2008, the company adopted Section 3862, *Financial Instruments - Disclosures*, and Section 3863, *Financial  Instruments - Presentation*, which replace Section 3861, *Financial Instruments - Disclosures and Presentation*. These new    Sections require enhanced disclosures on financial asset and liability categories as well as a detailed analysis of the risks    associated with the company's financial instruments and how the entity manages those risks. Presentation requirements remain    unchanged. The required disclosures are contained in note 6.

 Effective July 1, 2008, the Canadian Accounting Standards Board approved amendments to Section 3855, *Financial  Instruments - Recognition and Measurement*, and Section 3862, *Financial Instruments - Disclosures*, from the CICA Handbook.    These amendments focus on the ability to reclassify, under rare circumstances, financial assets out of the held-for-trading    category. The company has not reclassified any of its financial instruments.

**EIC-173, Credit Risk and Fair Value of Financial Assets and Financial Liabilities**

 On January 20, 2009, the Emerging Issues Committee issued EIC-173, *Credit Risk and the Fair Value of Financial Assets and  Financial Liabilities*, which provides further information on determining the fair value of financial assets and financial liabilities    under Section 3855,*Financial Instruments - Recognition and Measurement*. This Abstract states that an entity's own credit risk    and the credit risk of the counterparty should be taken into account in determining the fair value of financial assets and financial    liabilities, including derivative instruments. This recommendation applies retrospectively without restatement of prior period    financial statements to all financial assets and financial liabilities measured at fair value in interim and annual financial    statements for periods ending on or after January 20, 2009, the date of issuance of the Abstract. The adoption of this Abstract    had no impact on the financial statements of the company.

11

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

  (expressed in Canadian dollars)

> 
**EIC-174, Mining Exploration Costs**

 On March 27, 2009, the Emerging Issues Committee issued EIC-174, *Mining exploration costs*, to provide additional guidance    for mining exploration enterprises on when an impairment test is required. This Abstract should be applied to financial  statements issued after March 27, 2009. The adoption of this Abstract had no impact on the financial statements of the company.

**Impact of New Accounting Standards Not Yet Adopted**

**International Financial Reporting Standards ("IFRS")**

 In 2007, the CICA published an update of the Accounting Standards Board's Implementation Plan for incorporating IFRS into    Canadian GAAP. The plan outlines the key decisions that the CICA will need to make as it implements the strategic plan to    converge Canadian GAAP standards with IFRS. While IFRS use a similar conceptual framework to that of Canadian GAAP,    there are still significant accounting policy differences that will need to be resolved. The CICA has confirmed January 1, 2011 as    the change over from current Canadian GAAP to IFRS for publicly accountable companies.

 An analysis of the differences between IFRS and the company's accounting standards is underway. This analysis is being    conducted by taking into account the potential impacts, among others, on accounting policies and financial reporting. The    company is currently evaluating the impact of these new standards on its financial statements.

12

| **Virginia Mines Inc.**         |                                                                 |                        |                |                        |                |
|---------------------------------|----------------------------------------------------------------------|-----------------------------|---------------------|-----------------------------|---------------------|
| (an exploration company)        |                                                                 |                        |                |                        |                |
| Notes to Financial Statements   |                                                                 |                        |                |                        |                |
|                            |                                                                 |                        |                |                        |                |   |
| (expressed in Canadian dollars) |                                                                 |                        |                |                        |                |
|                            |                                                                 |                        |                |                        |                |   |
| **3**                           | **Short-Term Investments**                                           |                        |                |                        |                |   |
|                            |                                                                 |                        |                |                        |                |   |
|                            | a) Allocation of investments by instrument                           |                        |                |                        |                |
|                            |                                                                 |                        |                |                        |                |
|                            | **Short-term investments available for sale**                        | **As at February 28, 2009** |                     | **As at February 29, 2008** |
|                            |                                                                 | Amortized cost         | Carrying value |                             | Amortized cost | Carrying value |
|                            |                                                                 | $                           | $                   |                             | $                   | $ |
|                            | Bonds                                                                |                        |                |                        |                |   |
|                            |                                                                 | Federal                     | -                   | -                           |                | 1,458,062 | 1,563,132 |
|                            |                                                                 | Provincial                  | 1,473,080           | 1,478,900                   |                | 8,671,695 | 8,797,844 |
|                            |                                                                 | Paragovernmental            | 1,652,963           | 1,694,080                   |                | 2,789,246 | 2,870,236 |
|                            |                                                                 | Municipal                   | 16,558,434          | 16,650,707                  |                | 7,508,062 | 7,704,661 |
|                            |                                                                 | Companies                   | 822,572             | 699,779                     |                | 1,306,770 | 1,305,224 |
|                            |                                                                 | Financial institutions      | 536,395             | 536,844                     |                | 151,438 | 141,075 |
|                            |                                                                 | Other                       | 6,627               | 6,627                       |                     | 259,154 | 254,603 |
|                            |                                                                 | 21,050,071                  | 21,066,937          |                        | 22,144,427          | 22,636,775 |
|                            |                                                                 |                        |                |                        |                |   |
|                            | Preferred shares of public companies                                 | 555,824                     | 462,830             |                        | 85,303              | 94,558 |
|                            | Common shares of public companies                                    | 1,270,989                   | 832,995             |                        | 5,390,801           | 6,290,562 |
|                            | Trust units                                                          | 3,199,532                   | 2,826,603           |                        | 3,756,077           | 4,817,645 |
|                            | Other                                                                | -                           | -                   |                             | 278,594             | 288,479 |
|                            | **Total**                                                            | 26,076,416                  | 25,189,365          |                             | 31,655,202          | 34,128,019 |
|                            |                                                                 |                        |                |                        |                |   |
|                            |                                                                 |                        |                |                        |                |
|                            | **Short-term investments held for trading**                          | **As at February 28, 2009** |                     | **As at February 29, 2008** |
|                            |                                                                 | Amortized cost         | Carrying value |                             | Amortized cost | Carrying value |
|                            |                                                                 | $                           | $                   |                             | $                   | $ |
|                            |                                                                 |                        |                |                        |                |   |
|                            | Convertible debentures *                                             | 1,617,081                   | 1,346,694           |                        | 1,996,857           | 1,957,762 |
|                            | Warrants of public companies                                         | 1,493,070                   | -                   |                             | 2,165,938           | 108,320 |
|                            | **Total**                                                            | 3,110,151                   | 1,346,694           |                             | 4,162,795           | 2,066,082 |
|                            |                                                                 | 29,186,567                  | 26,536,059          |                             | 35,817,997          | 36,194,101 |
|                            |                                                                 |                        |                |                        |                |   |
|                            | (*) These convertible debentures are designated as held for trading. |                        |

----

| **Virginia Mines Inc.**         |                                                               |                                                                               |          |          |
|---------------------------------|--------------------------------------------------------------------|------------------------------------------------------------------------------------|---------------|---------------|
| (an exploration company)        |                                                               |                                                                               |          |
| Notes to Financial Statements   |                                                               |                                                                               |          |
|                            |                                                               |                                                                               |          |          |   |
| (expressed in Canadian dollars) |                                                               |                                                                               |          |
|                            |                                                               |                                                                               |          |          |   |
|                            | b) Allocation of bonds and convertible debentures by maturity date |
|                            |                                                               |                                                                               |          |          |   |
|                            | **Bonds maturity**                                                 | **As at February 28, 2009      _________________________________________________** |
|                            |                                                               | **Less than**                                                                      | **From 1 to** | **More than** |  |
|                            |                                                               | **1 year**                                                                         | **5 years**   | **5 years**   | **Total** |
|                            |                                                               | **$**                                                                              | **$**         | **$**         | **$** |
|                            |                                                               |                                                                                    |               |               |  |
|                            | Amortized cost                                                     | 12,584,197                                                                         | 7,945,504     | 520,370       | 21,050,071 |
|                            | Carrying value                                                     | 12,680,597                                                                         | 7,988,179     | 398,161       | 21,066,937 |
|                            |                                                               |                                                                                    |               |               |  |
|                            |                                                               |                                                                                    |               |               |  |
|                            |                                                               | **As at February 29, 2008      _________________________________________________** |
|                            |                                                               | **Less than**                                                                      | **From 1 to** | **More than** |  |
|                            |                                                               | **1 year**                                                                         | **5 years**   | **5 years**   | **Total** |
|                            |                                                               | **$**                                                                              | **$**         | **$**         | **$** |
|                            |                                                               |                                                                                    |               |               |  |
|                            | Amortized cost                                                     | 6,247,681                                                                          | 13,979,189    | 1,917,557     | 22,144,427 |
|                            | Carrying value                                                     | 6,297,182                                                                          | 14,358,621    | 1,980,972     | 22,636,775 |
|                            |                                                               |                                                                                    |               |               |  |
|                            |                                                               |                                                                                    |               |               |  |
|                            |                                                               |                                                                                    |               |               |  |
|                            |                                                               |                                                                                    |               |               |  |
|                            | **Convertible debentures maturity**                                |                                                                                    |               |               |
|                            |                                                               | **As at February 28, 2009      _________________________________________________** |
|                            |                                                               | **Less than**                                                                      | **From 1 to** | **More than** |  |
|                            |                                                               | **1 year**                                                                         | **5 years**   | **5 years**   | **Total** |
|                            |                                                               | **$**                                                                              | **$**         | **$**         | **$** |
|                            |                                                               |                                                                                    |               |               |  |
|                            | Amortized cost                                                     | -                                                                                  | 1,163,371     | 453,710       | 1,617,081 |
|                            | Carrying value                                                     | -                                                                                  | 985,331       | 361,363       | 1,346,694 |
|                            |                                                               |                                                                                    |               |               |  |
|                            |                                                               |                                                                                    |               |               |  |
|                            |                                                               | **As at February 29, 2008      _________________________________________________** |
|                            |                                                               | **Less than**                                                                      | **From 1 to** | **More than** |  |
|                            |                                                               | **1 year**                                                                         | **5 years**   | **5 years**   | **Total** |
|                            |                                                               | **$**                                                                              | **$**         | **$**         | **$** |
|                            |                                                               |                                                                                    |               |               |  |
|                            | Amortized cost                                                     | -                                                                                  | 1,285,012     | 711,845       | 1,996,857 |
|                            | Carrying value                                                     | -                                                                                  | 1,280,736     | 677,026       | 1,957,762 |
|                            |                                                               |                                                                               |          |          |   |
|                            |                                                               |                                                                               |          |          |   |
|                            | c) Interest rate                                                   |                                                                               |          |          |   |

> 
The bonds bear interest at fixed rates ranging from 1.38% to 8.25% (from 3.17% to 8.25% as at February 29, 2008). The convertible debentures bear interest at fixed rates ranging from 5.70% to 8.50% (5.70% to 8.25% as at February 29, 2008).

14

----

| **Virginia Mines Inc.**         |                                                                  |                        |   |
|---------------------------------|-----------------------------------------------------------------------|-----------------------------|--------|
| (an exploration company)        |                                                                  |                        |   |
| Notes to Financial Statements   |                                                                  |                        |   |
|                            |                                                                  |                        |   |   |
| (expressed in Canadian dollars) |                                                                  |                        |   |
|                            |                                                                  |                        |   |   |
| **4**                           | **Tax Credits for Mining Exploration and Commodity Taxes Receivable** |                        |   |
|                            |                                                                  | **As at February 28,** |        | **As at February 29,** |
|                            |                                                                  |                             |
|                            |                                                                  | **2009**                    |        | **2008** |
|                            |                                                                  | **$**                       |        | **$** |
|                            |                                                                  |                        |   |   |
|                            | Refundable tax credit for resources                                   | 3,722,770                   |   | 3,942,713 |
|                            | Credit on duties refundable for loss                                  | 1,461,557                   |        | 2,117,942 |
|                            | Commodity taxes receivable                                            | 116,723                     |        | 771,218 |
|                            |                                                                  | 5,301,050                   |        | 6,831,873 |

**5 Long-Term Investments**

> 
 In August 2007, the Canadian third-party Asset-Backed Commercial Paper ("ABCP") market was hit by a liquidity disruption.    Since then, the securities held by the company have not been traded in an active market.

 On August 16, 2007, a group of financial institutions and other parties agreed, pursuant to the Montreal Accord (the "Accord") to    a standstill period in respect of ABCP sold by 23 conduit issuers. A Pan-Canadian Investors Committee (the "Committee") was    subsequently established to oversee the orderly restructuring of these instruments during this standstill period.

 An ABCP restructuring report of J.P. Morgan dated March 14, 2008 and a restructuring Plan proposed to noteholders dated    March 20, 2008 were published. The Plan was approved by noteholders on April 25, 2008 and on June 5, 2008, the Ontario    Superior Court of Justice homologated it.

 On June 25, 2008, a number of ABCP holders appealed the Ontario Superior Court of Justice's decision to the    Ontario Court of Appeal. On August 18, 2008, the Ontario Court of Appeal upheld the Ontario Superior Court of Justice's    decision approving the Committee's Restructuring Plan. On August 29, 2008, a number of ABCP holders appealed the Ontario    Court of Appeal's decision to the Supreme Court of Canada.

 On September 19, 2008, the Supreme Court of Canada denied leave to appeal by a small group of ABCP holders.

 On December 11, 2008, the Committee announced that an agreement in principle had been reached among various key    participants in the ABCP restructuring, which would result in several significant improvments to the restructuring Plan.

 On December 24, 2008, the Committee confirmed that an agreement for additional back-stop facility had been reached with all    key stakeholders, including the governments of Canada, Quebec, Ontario and Alberta.

 On January 21, 2009, the Committee announced that the third-party ABCP restructuring plan had been implemented. Pursuant to    the terms of the plan, holders of ABCP had their short-term commercial paper exchanged for longer-term notes whose maturities    match those of the assets previously contained in the underlying conduits. As at this date, the company held a portfolio of    $3,800,000 principal amount in non-bank sponsored ABCP.

 As at the plan implementation date, the company remeasured its investments in ABCP at fair value prior to the exchange. During    this valuation, the company reviewed its assumptions to factor in new information available at that date.

----

**Virginia Mines Inc.**  (an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

> 
 Since there is no active market for ABCP securities, the company's management has estimated the fair value of these assets by    discounting future cash flows determined using a valuation model that incorporates management's best estimates based as much    as possible on observable market data, such as the credit risk attributable to underlying assets, relevant market interest rates,    amounts to be received and maturity dates. The company assigns an average discount rate used of 15.70% with an estimated    average term of 7.49 years and the average coupon rate is 1.75%.

 As at January 21, 2009, the fair value of ABCPs held by the company was estimated at $1,275,000. As a result of this valuation,    the company recognized an unrealized loss in ABCP investments of $169,000 ($2,455,387 for the year ended February 29,    2008), which is presented under caption *Loss on investments held for trading*. The company also took into account the first    payment of interest of $147,928 received on January 21, 2009, which includes an estimative part of ABCP accrued interest from    August 2007 to August 31, 2008, net of related restructuring costs of the implementation of the plan. This amount reduced the    unrealized loss in ABCP investments.

 Also on January 21, 2009, the ABCP held by the company at that date was exchanged for new securities. The new notes now    have a par value of $3,768,137 and are detailed as follows:
MAV 2 Class A-1 Synthetic Notes$792,421Class A-2 Synthetic Notes498,716Class B Synthetic Notes90,531Class C Synthetic Notes42,732 $1,424,400 MAV3Tracking Notes - Traditional Assets (TA)$360,699Tracking Notes - Ineligible Assets (IA)1,983,038 $2,343,737
These new notes were designated as held for trading.

On February 28, 2009, the company remeasured its new notes at fair value. During this valuation, the company reviewed its    assumptions to factor in new information available at that date, as well as the changes in credit market conditions. The company    assigns an average discount rate used of 16.59% with an estimated average term of 7.39 years and the average coupon rate is    2.17%. As a result of this valuation, the company recognized an unrealized loss in the new notes of $63,000, which is presented  under caption *Loss on investments designated as held for trading*.

 An increase in the estimated discount rate of 1% would reduce the estimated fair value of the company's investment in the new    notes by approximately $74,000.

 In the absence of an active market, the fair value of the new notes is determined using a weighting approach and the foregoing    assumptions and is based on the company's assessment of market conditions as at February 28, 2009. The reported fair value    may change materially in subsequent periods. The company believes that these differences will not have a material impact on the    company's financial condition.

----

| **Virginia Mines Inc.**         |                                                                                                                      |                         |                      |                 |                                  |            |            |
|---------------------------------|---------------------------------------------------------------------------------------------------------------------------|------------------------------|---------------------------|----------------------|---------------------------------------|------------|------------|
| (an exploration company)        |                                                                                                                      |                         |                      |                 |                                  |       |            |
| Notes to Financial Statements   |                                                                                                                      |                         |                      |                 |                                  |       |       |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
| (expressed in Canadian dollars) |                                                                                                                      |                         |                      |                 |                                  |       |       |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
| **6**                           | **Financial Instruments**                                                                                                 |                         |                      |                 |                                  |       |       |   |   |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            | **Classification**                                                                                                        |                         |                      |                 |                                  |       |       |   |   |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            | The classification of financial instruments as at February 28, 2009 and as at February 29, 2008 is summarized as follows: |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       | **As at February 28, 2009** |
|                            |                                                                                                                           |                              |                           |                      |                                       |            |            | Carrying value | Fair value |
|                            |                                                                                                                           | Held for trading             | Available        for sale | Loans and receivable | Other      financial      liabilities | Total      | Total      |
|                            |                                                                                                                           | $                            |                           | $                    |                                       | $          | $          | $ | $ |
|                            | **Financial Assets**                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            |                                                                                                                      | Cash and cash equivalents    | 7,633,221                 |                 | -                                     |       | -          | - | 7,633,221 | 7,633,221 |
|                            |                                                                                                                      | Short-term investments       | 1,346,694                 | (1)                  | 25,189,365                            | (2)        | -          | - | 26,536,059 | 26,536,059 |
|                            |                                                                                                                      | Other amounts receivable     | -                         |                 | -                                     |       | 134,038    | - | 134,038 | 134,038 |
|                            |                                                                                                                      | Long-term investments        | 1,212,000                 | (3)                  | -                                     | -          | -          | 1,212,000 | 1,212,000 |
|                            |                                                                                                                      | 10,191,915                   | 25,189,365                | 134,038              | -                                     | 35,515,318 | 35,515,318 |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            | **Financial Liabilities**                                                                                                 |                         |                      |                 |                                  |       |       |   |   |
|                            |                                                                                                                      | Accounts payable and accrued |                      |                 |                                  |       |       |   |   |   |
|                            |                                                                                                                      |                         | liabilities               | -                    |                                  | -          |       | - | 1,211,983 | 1,211,983 | 1,211,983 |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       | **As at February 29, 2008** |
|                            |                                                                                                                           |                              |                           |                      |                                       |            |            | Carrying value | Fair value |
|                            |                                                                                                                           | Held for trading             | Available      for sale   | Loans and receivable | Other      financial      liabilities | Total      | Total      |
|                            |                                                                                                                           | $                            |                           | $                    |                                       | $          | $          | $ | $ |
|                            | **Financial Assets**                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            |                                                                                                                      | Cash and cash equivalents    | 8,665,254                 |                 | -                                     |       | -          | - | 8,665,254 | 8,665,254 |
|                            |                                                                                                                      | Short-term investments       | 2,066,082                 | (1)                  | 34,128,019                            | (2)        | -          | - | 36,194,101 | 36,194,101 |
|                            |                                                                                                                      | Other amounts receivable     | -                         |                 | -                                     |       | 180,476    | - | 180,476 | 180,476 |
|                            |                                                                                                                      | Long-term investments        | 1,444,000                 | (3)                  | -                                     | -          | -          | 1,444,000 | 1,444,000 |
|                            |                                                                                                                      | 12,175,336                   | 34,128,019                | 180,476              | -                                     | 46,483,831 | 46,483,831 |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            | **Financial Liabilities**                                                                                                 |                         |                      |                 |                                  |       |       |   |   |
|                            |                                                                                                                      | Accounts payable and accrued |                      |                 |                                  |       |       |   |   |   |
|                            |                                                                                                                      |                         | liabilities               | -                    |                                  | -          |       | - | 3,895,275 | 3,895,275 | 3,895,275 |
|                            |                                                                                                                      |                         |                      |                 |                                  |       |       |   |   |
|                            | (1) Warrants and convertible debentures                                                                                   |                         |                      |                 |                                  |       |       |   |
|                            | (2) Bonds, trust units and shares                                                                                         |                         |                      |                 |                                  |       |       |   |   |
|                            | (3) MAV 2 and MAV 3 notes (ABCP for 2008)                                                                                 |                         |                      |                 |                                  |       |       |   |

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

> 
Other amounts receivable and accounts payable and accrued liabilities are financial instruments whose carrying value  approximates their fair value due to their short-term maturity. Cash and cash equivalents are valued at fair value.

 The fair value of available-for-sale short-term investments is established using the bid price on the most beneficial active market    for these instruments that is readily available to the company. When a bid price is not available, the company uses the closing    price of the most recent transaction on such instrument.

 The fair value of convertible debentures is established in a manner similar to available-for-sale short-term investments. Since    there is no active market for the warrants, the company determines fair value using an option pricing model (Black & Scholes    model) with observable data.

 The fair value of long-term investments was determined using the method described in note 5.

 As at February 28, 2009, gross unrealized losses on available-for-sale securities totalled $1,321,181. Of this sum, an amount of    $138,146 is related to bonds and results from wider credit spreads due to recent disruptions in capital markets as well as changes    in market interest rates and not from deterioration in the creditworthiness of issuers. The balance of $1,183,035 related to    common shares, preferred shares, and trust units is mainly explained by fluctuation of prices and early years in business cycle of    the investees for certain investments. The company has the ability and intent to hold these securities for a period of time    sufficient to allow for recovery in fair value. It determined that the gross unrealized losses are temporary in nature.

 The total interest income for financial assets that are not classified as held for trading is $778,000 ($1,028,000 for the year ended    February 29, 2008).

**Financial Risks**

 The company has exposure to various financial risks, such as credit risk, liquidity risk and market risk from its use of financial    instruments.

**Credit Risk**

 Credit risk associated with short-term investments arises mainly from the possibility that the issuer of securities may be unable    to fulfill payment obligations. The company minimizes its exposure to issuer risk by investing only in products having a high    quality investment-grade rating. It also ensures to achieve a good diversification of its banking investments. In addition, the    company attempts to minimize its risks by entering into agreements only with Canadian institutions and their subsidiaries.    Exposure to these risks is closely monitored and maintained within the limits stated in the investment policy of the company,    which is revised regularly.

 Credit risk associated with other amounts receivable arises from the possibility that the partners may not be able to repay their    debts. These receivables result from exploration work carried out on projects in partnership with other mining companies. The    company considers that the credit risk related to amounts receivable from such partnerships are minimal, because the company    signed agreements with major mining companies.

**Liquidity Risk**

 Liquidity risk is the risk that the company may be unable to fulfill its financial obligations related to financial liabilities. The    company's approach to managing liquidity risk is to ensure that it will have sufficient liquidities to meet liabilities when due. As    at February 28, 2009, the company had a cash balance of $7,633,221 ($8,665,254 as at February 29, 2008) to settle current    liabilities of $1,211,983 ($3,895,275 as at February 29, 2008). All of the company's financial liabilities have contractual    maturities of less than 30 days and are subject to normal trade terms.

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

> 
**Market Risk**

 Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in    market prices. Market risk includes interest rate risk, currency risk and other price risks such as equity risk.

**Interest Rate Risk**

 Interest rate risk is the risk that the fair value of future cash flows of a financial instrument fluctuate due to changes to market    interest rates. The company's current policy is to invest excess cash principally in bonds and convertible debentures refundable    before maturity and/or in interest-bearing accounts of Canadian banks and their subsidiaries.

As at February 28, 2009 and as at February 29, 2008, the company's exposure to interest rate risk is summarized as follows:  

| Cash and cash equivalents                | Variable interest rate                           |
|------------------------------------------|--------------------------------------------------|
| Short-term investments                   | Fixed interest rates ranging from 1.38% to 8.50% |
| Other amounts receivable                 | Non-interest-bearing                             |
| Long-term investments                    | As described in note 5                           |
| Accounts payable and accrued liabilities | Non-interest-bearing                             |
|                                          |                                                  |

> 
For the year ended February 28, 2009, the sensivity to a +/- 1% change in bank balance rates would have an estimated after-tax effect of $76,000 on the Statement of Earnings (Loss).

Changes in fair value of available-for-sale bonds are recorded in Other Comprehensive Loss. For the company's available-forsale    bonds, a variation of +/- 1% of interest rates as at February 28, 2009, would result in an estimated after-tax effect in Other    Comprehensive Loss of $152,000.

**Foreign Exchange Risk**

 The company's functional currency is the Canadian dollar and most of its purchases are made in Canadian dollars. The company    holds foreign currency in a chartered Canadian bank account as at February 28, 2009, but the risk is minimized because the    balance of the bank account is not significant for the company. As a result, the company's exposure to foreign exchange risk is    minimal.

**Equity risk**

 Equity risk is the risk that the fair value of a financial instrument varies due to equity market changes.

 Changes in fair value of trust units and available-for-sale shares are recorded in Other Comprehensive Loss. For the company's    trust units and available-for-sale shares, a variation of +/- 10 % of the quoted market prices as at February 28, 2009, would result    in an estimated after-tax effect in Other Comprehensive Loss of $350,000.

 Changes in fair value of warrants and convertible debentures held for trading are recorded in the Statements of Earnings. There    is no material risk related to the warrants for the company due to the zero carrying value as at February 28, 2009. Changes in fair    value of convertible debentures would be more impacted by the stock markets than the interest rate variation. A variation of +/- 10% in market prices as at February 28, 2009, would result in a maximal estimated after-tax effect in the Statements of Earnings    (Loss) of $135,000.

----

| **Virginia Mines Inc.**                |                  |                         |
|----------------------------------------|-----------------------|------------------------------|
| (an exploration company)               |                  |                         |   |   |
| Notes to Financial Statements          |                  |                         |   |   |   |
|                                   |                  |                         |   |   |   |   |   |
| (expressed in Canadian dollars)        |                  |                         |   |   |   |
|                                   |                  |                         |   |   |   |   |   |
| **7**                                  | **Mining Properties** |                         |   |   | **Mining        Properties      Abandoned,      Written Off,      Under Option or      Sold, Credit on      Duties      Refundable for      Loss,      Refundable Tax      Credit for    Resources** |   |
|                                   |                       |                         |   |   |   |   |
|                                   |                  |                         |   |   |   |   |
|                                   |                  |                         |   |   |   |   |
|                                   |                  |                         |   |   |   |   |
|                                   |                  |                         |   |   |   |   |
|                                   |                  |                         |   |   |   |   |
|                                   |                  |                         |   |   |   |   |
|                                   |                  |                         |   |   |   |   |
|                                   |                  | **# Claims /     # Permits** | **Undivided Interest** | **Balance as at     March 1, 2008** | **Costs      Incurred** | **Balance as at February 28, 2009** |
|                                   |                  |                         | **%** | **$** | **$** | **$** | **$** |
| Anatacau (note 7b)                     | 207                   |                         |   |   |   |   |
|                                   | Mining property       | 0                            | 25,345 | 20,700 | - | 46,045 |
|                                   | Exploration costs     |                         | 368,841 | 432,742 | (199,494) | 602,089 |
|                                   |                  |                         |   | 394,186 | 453,442 | (199,494) | 648,134 |
|                                   |                  |                         |   |  |  |  |  |
| Ashuanipi                              | 1,339                 |                         |  |  |  |  |
|                                   | Mining property       |                         | 100 | 150,420 | 3,565 | - | 153,985 |
|                                   | Exploration costs     |                         |  | 109,548 | 1,157,647 | (277,871) | 989,324 |
|                                   |                  |                         |   | 259,968 | 1,161,212 | (277,871) | 1,143,309 |
|                                   |                  |                         |   |  |  |  |  |
| Corvet Est                             | 655                   |                         |  |  |  |  |
|                                   | Mining property       |                         | 50 | 30,401 | 25,657 | (4,995) | 51,063 |
|                                   | Exploration costs     |                         |   | 972,474 | 398,082 | (289,190) | 1,081,366 |
|                                   |                  |                         |   | 1,002,875 | 423,739 | (294,185) | 1,132,429 |
|                                   |                  |                         |   |  |  |  |  |
| Coulon (note 7e)                       | 3,035                 |                         |  |  |  |  |
|                                   | Mining property       |                         | 100 | 277,562 | 4,760,054 | - | 5,037,616 |
|                                   | Exploration costs     |                         |   | 2,311,964 | 6,855,766 | (1,844,582) | 7,323,148 |
|                                   |                  |                         | 2,589,526 | 11,615,820 | (1,844,582) | 12,360,764 |
|                                   |                  |                         |  |  |  |  |
| Éléonore Régional | 740                   |                         |  |  |  |  |
|                                   | Mining property       |                         | 100 | 157,361 | 81,739 | - | 239,100 |
|                                   | Exploration costs     |                         |   | 482,189 | 299,768 | (138,193) | 643,764 |
|                                   |                  |                         | 639,550 | 381,507 | (138,193) | 882,864 |
|                                   |                  |                         |  |  |  |  |
| FCI                                    | 412                   |                         |  |  |  |  |
|                                   | Mining property       |                         | 100 | 82,462 | 14,981 | - | 97,443 |
|                                   | Exploration costs     |                         |   | 639,410 | 5,370 | (2,475) | 642,305 |
|                                   |                  |                         | 721,872 | 20,351 | (2,475) | 739,748 |
|                                   |                  |                         |   |  |  |  |  |
|                                   |                  | (forward)                    |   | 5,607,977 | 14,056,071 | (2,756,800) | 16,907,248 |

----

| **Virginia Mines Inc.**                                      |                                    |                   |                                                |                    |
|--------------------------------------------------------------|-----------------------------------------|------------------------|-----------------------------------------------------|-------------------------|
| (an exploration company)                                     |                                    |                   |                                                |                    |
| Notes to Financial Statements                                |                                    |                   |                                                |                    |   |
|                                                         |                                    |                   |                                                |                    |   |   |   |
| (expressed in Canadian dollars)                              |                                    |                   |                                                |                    |   |
|                                                         |                                         |                   |                                                |                    |   | **Mining        Properties        Abandoned,        Written Off,****Under Option or      Sold, Credit on****Duties      Refundable for      Loss,      Refundable Tax      Credit for      Resources** |   |
|                                                         |                                    |                   |                                                |                    |   |   |
|                                                         |                                    |                   |                                                |                    |   |   |
|                                                         |                                    |                   |                                                |                    |   |   |
|                                                         |                                    |                   |                                                |                    |   |   |
|                                                         |                                    |                   |                                                |                    |   |   |
|                                                         |                                    |                   |                                                |                    |   |   |
|                                                         |                                    |                        |                                                     |                         |  | **Balance as at February 28, 2009** |
|                                                         | **# Claims /      # Permits** | **Undivided Interest** | **Balance as at March 1, 2008** | **Costs      Incurred** |
|                                                         |                                    | **%**                  | **$**                                               | **$**                   | **$** | **$** |
|                                                         |                                    |                   |                                                |                    |   |   |   |
|                                                         | (brought forward)                       |                   | 5,607,977                                           | 14,056,071              | (2,756,800) | 16,907,248 |
|                                                         |                                    |                   |                                                |                         |  |  |  |
| Laguiche                                                     | 1,653                                   |                   |                                                     |                         |  |  |
|                                                         | Mining property                         |                   | 100                                                 | 395,540                 | 43,585 | (196,751) | 242,374 |
|                                                         | Exploration costs                       |                   |                                                | 249,550                 | 72,746 | (162,807) | 159,489 |
|                                                         |                                    |                   | 645,090                                             | 116,331                 | (359,558) | 401,863 |
|                                                         |                                    |                   |                                                |                         |  |  |  |
| Lac Gayot (note 7d)                                          | 609                                     |                   |                                                     |                         |  |  |
|                                                         | Mining property                         | 1                      | 100                                                 | 2,265,920               | - | (74,937) | 2,190,983 |
|                                                         | Exploration costs                       |                   |                                                | 797,475                 | (269) | (26,264) | 770,942 |
|                                                         |                                    |                   |                                                | 3,063,395               | (269) | (101,201) | 2,961,925 |
|                                                         |                                    |                   |                                                |                         |  |  |  |
| Nichicun                                                     | 610                                     |                   |                                                     |                         |  |  |
|                                                         | Mining property                         |                   | 100                                                 | 177,228                 | 50,255 | (135,434) | 92,049 |
|                                                         | Exploration costs                       |                   |                                                | 244,539                 | 19,638 | (159,195) | 104,982 |
|                                                         |                                    |                        |                                                | 421,767                 | 69,893 | (294,629) | 197,031 |
|                                                         |                                    |                   |                                                |                         |  |  |  |
| Poste Lemoyne Ext.                                           | 252                                     |                   |                                                     |                         |  |  |
|                                                         | Mining property                         |                   | 100                                                 | 1,103,304               | 5,175 | - | 1,108,479 |
|                                                         | Exploration costs                       |                   |                                                | 1,532,281               | 2,074,254 | (737,708) | 2,868,827 |
|                                                         |                                    |                   |                                                | 2,635,585               | 2,079,429 | (737,708) | 3,977,306 |
|                                                         |                                    |                   |                                                |                         |  |  |  |
| Wabamisk                                                     | 750                                     |                   |                                                     |                         |  |  |
|                                                         | Mining property                         |                   | 100                                                 | 142,655                 | 86,222 | - | 228,877 |
|                                                         | Exploration costs                       |                   |                                                | 601,087                 | 358,017 | (165,046) | 794,058 |
|                                                         |                                    |                   |                                                | 743,742                 | 444,239 | (165,046) | 1,022,935 |
|                                                         |                                    |                        |                                                |                         |  |  |  |
| Other                                                        |                                    |                   |                                                     |                         |  |  |
|                                                         | Mining properties                       |                   |                                                | 1,009,043               | 221,695 | (425,412) | 805,326 |
|                                                         | Exploration costs                       |                   |                                                | 770,118                 | 1,588,960 | (1,558,333) | 800,745 |
|                                                         |                                    |                   | 1,779,161                                           | 1,810,655               | (1,983,745) | 1,606,071 |
|                                                         |                                    |                   |                                                | 14,896,717              | 18,576,349 | (6,398,687) | 27,074,379 |
|                                                         |                                    |                   |                                                |                    |   |   |   |
|                                                         |                                    |                   |                                                |                    |   |   |   |
|                                                         |                                    |                   |                                                |                    |   |   |   |
| All mining properties are located in the province of Quebec. |                                    |                   |                                                |

----

| **Virginia Mines Inc.**                |              |                                  |                        |                                                |
|----------------------------------------|-------------------|---------------------------------------|-----------------------------|-----------------------------------------------------|
| (an exploration company)               |              |                                  |                        |                                                |
| Notes to Financial Statements          |              |                                  |                        |                                                |
|                                   |              |                                  |                        |                                                |   |   |   |
| (expressed in Canadian dollars)        |              |                                  |                        |                                                |
|                                   |                   |                                  |                        |                                                |   | **Mining    Properties    Abandoned,    Written Off,    Under Option or    Sold, Credit on    Duties    Refundable for    Loss,    Refundable Tax    Credit for    Resources** |   |
|                                   |              |                                  |                        |                                                |   |   |
|                                   |              |                                  |                        |                                                |   |   |
|                                   |              |                                  |                        |                                                |   |   |
|                                   |              |                                  |                        |                                                |   |   |
|                                   |              |                                  |                        |                                                |   |   |
|                                   |              |                                  |                        |                                                |   |   |
|                                   |              |                                       |                             |                                                     |  | **Balance as at February 29, 2008** |
|                                   |              | **# Claims /    # Permits** | **Undivided      Interest** | **Balance as at March 1, 2007** | **Costs Incurred** |
|                                   |              |
|                                   |              | **%**                                 | **$**                       | **$**                                               | **$** | **$** |
| Anatacau                               | 207               |                                       |                             |                                                     |  |  |
|                                   | Mining property   |                                  | 0                           | -                                                   | 25,345 | - | 25,345 |
|                                   | Exploration costs |                                  |                             | -                                                   | 684,306 | (315,465) | 368,841 |
|                                   |              |                                  |                             | -                                                   | 709,651 | (315,465) | 394,186 |
|                                   |              |                                  |                             |                                                     |  |  |  |
| Corvet Est                             | 723               |                                       |                             |                                                     |  |  |
|                                   | Mining property   |                                  | 100                         | 30,401                                              | - | - | 30,401 |
|                                   | Exploration costs |                                  |                             | 1,007,474                                           | - | (35,000) | 972,474 |
|                                   |              |                                  |                             | 1,037,875                                           | - | (35,000) | 1,002,875 |
|                                   |              |                                       |                             |                                                     |  |  |
| Coulon JV                              | 3,035             |                                       |                             |                                                     |  |  |
|                                   | Mining property   |                                  | 50                          | 185,531                                             | 92,031 | - | 277,562 |
|                                   | Exploration costs |                                  |                             | 699,025                                             | 3,619,062 | (2,006,123) | 2,311,964 |
|                                   |              |                                       | 884,556                     | 3,711,093                                           | (2,006,123) | 2,589,526 |
|                                   |              |                                       |                             |                                                     |  |  |
| Éléonore Régional | 641               |                                       |                             |                                                     |  |  |
|                                   | Mining property   |                                  | 100                         | 55,901                                              | 101,460 | - | 157,361 |
|                                   | Exploration costs |                                  |                             | 168,143                                             | 582,646 | (268,600) | 482,189 |
|                                   |              |                                       | 224,044                     | 684,106                                             | (268,600) | 639,550 |
|                                   |              |                                       |                             |                                                     |  |  |
| FCI                                    | 412               |                                       |                             |                                                     |  |  |
|                                   | Mining property   |                                  | 100                         | 51,828                                              | 30,634 | - | 82,462 |
|                                   | Exploration costs |                                  |                             | 336,351                                             | 562,261 | (259,202) | 639,410 |
|                                   |              |                                       | 388,179                     | 592,895                                             | (259,202) | 721,872 |
|                                   |              |                                       |                             |                                                     |  |  |
| Gipouloux                              | 1,846             |                                       |                             |                                                     |  |  |
|                                   | Mining property   |                                  | 100                         | 206,432                                             | - | - | 206,432 |
|                                   | Exploration costs |                                  |                             | 62,162                                              | 230,471 | (106,247) | 186,386 |
|                                   |              |                                  |                             | 268,594                                             | 230,471 | (106,247) | 392,818 |
|                                   |              |                                  |                             |                                                     |  |  |  |
|                                   |              | (forward)                             |                             | 2,803,248                                           | 5,928,216 | (2,990,637) | 5,740,827 |

----

| **Virginia Mines Inc.**                                      |              |                         |                   |                                                |
|--------------------------------------------------------------|-------------------|------------------------------|------------------------|-----------------------------------------------------|
| (an exploration company)                                     |              |                         |                   |                                                |
| Notes to Financial Statements                                |              |                         |                   |                                                |   |
|                                                         |              |                         |                   |                                                |   |   |   |
| (expressed in Canadian dollars)                              |              |                         |                   |                                                |   |
|                                                         |                   |                         |                   |                                                |   | **Mining       Properties      Abandoned,      Written Off, Under Option or      Sold, Credit on      Duties      Refundable for      Loss,      Refundable Tax      Credit for      Resources** |   |
|                                                         |              |                         |                   |                                                |   |   |
|                                                         |              |                         |                   |                                                |   |   |
|                                                         |              |                         |                   |                                                |   |   |
|                                                         |              |                         |                   |                                                |   |   |
|                                                         |              |                         |                   |                                                |   |   |
|                                                         |              |                         |                   |                                                |   |   |
|                                                         |              |                              |                        |                                                     |  | **Balance as at      February 29,      2008** |
|                                                         |              | **# Claims /     # Permits** | **Undivided Interest** | **Balance as at March 1, 2007** | **Costs      Incurred** |
|                                                         |              |
|                                                         |              | **%**                        | **$**                  | **$**                                               | **$** | **$** |
|                                                         |              |                         |                   |                                                |   |   |   |
|                                                         | (brought forward) |                         | 2,803,248              | 5,928,216                                           | (2,990,637) | 5,740,827 |
|                                                         |              |                         |                   |                                                     |  |  |  |
| Laguiche                                                     | 2,990             |                         |                        |                                                     |  |  |
|                                                         | Mining property   |                         | 100                    | 247,150                                             | 148,390 | - | 395,540 |
|                                                         | Exploration costs |                         |                   | 41,300                                              | 566,011 | (357,761) | 249,550 |
|                                                         |              |                         | 288,450                | 714,401                                             | (357,761) | 645,090 |
|                                                         |              |                         |                   |                                                     |  |  |  |
| Lac Gayot                                                    | 492               |                         |                        |                                                     |  |  |
|                                                         | Mining property   | 2                            | 100                    | 2,245,429                                           | 20,491 | - | 2,265,920 |
|                                                         | Exploration costs |                         |                   | 750,692                                             | 142,454 | (95,671) | 797,475 |
|                                                         |              |                         |                   | 2,996,121                                           | 162,945 | (95,671) | 3,063,395 |
|                                                         |              |                         |                   |                                                     |  |  |  |
| Nichicun                                                     | 1,501             |                         |                        |                                                     |  |  |
|                                                         | Mining property   |                         | 100                    | 157,574                                             | 19,654 | - | 177,228 |
|                                                         | Exploration costs |                         |                   | 3,074                                               | 447,986 | (206,521) | 244,539 |
|                                                         |              |                              |                   | 160,648                                             | 467,640 | (206,521) | 421,767 |
|                                                         |              |                         |                   |                                                     |  |  |  |
| Poste Lemoyne Ext.                                           | 230               |                         |                        |                                                     |  |  |
|                                                         | Mining property   |                         | 100                    | 1,079,399                                           | 23,905 | - | 1,103,304 |
|                                                         | Exploration costs |                         |                   | 775,682                                             | 1,403,708 | (647,109) | 1,532,281 |
|                                                         |              |                         |                   | 1,855,081                                           | 1,427,613 | (647,109) | 2,635,585 |
|                                                         |              |                         |                   |                                                     |  |  |  |
| Wabamisk                                                     | 734               |                         |                        |                                                     |  |  |
|                                                         | Mining property   |                         | 100                    | 141,681                                             | 974 | - | 142,655 |
|                                                         | Exploration costs |                         |                   | 228,435                                             | 691,377 | (318,725) | 601,087 |
|                                                         |              |                         |                   | 370,116                                             | 692,351 | (318,725) | 743,742 |
|                                                         |              |                              |                   |                                                     |  |  |  |
| Other                                                        |              |                         |                        |                                                     |  |  |
|                                                         | Mining properties |                         |                   | 542,446                                             | 410,585 | - | 953,031 |
|                                                         | Exploration costs |                         |                   | 722,426                                             | 851,279 | (880,425) | 693,280 |
|                                                         |              |                         | 1,264,872              | 1,261,864                                           | (880,425) | 1,646,311 |
|                                                         |              |                         |                   | 9,738,536                                           | 10,655,030 | (5,496,849) | 14,896,717 |
|                                                         |              |                         |                   |                                                |   |   |   |
|                                                         |              |                         |                   |                                                |   |   |   |
|                                                         |              |                         |                   |                                                |   |   |   |
| All mining properties are located in the province of Quebec. |

----

| **Virginia Mines Inc.**         |                                                           |             |   |
|---------------------------------|----------------------------------------------------------------|------------------|--------|
| (an exploration company)        |                                                           |             |   |
| Notes to Financial Statements   |                                                           |             |   |
|                            |                                                           |             |   |   |
| (expressed in Canadian dollars) |                                                           |             |   |
|                            |                                                           |             |   |   |
|                            | **Change in Mining Properties**                                |             |   |   |
|                            |                                                           |             |   |   |
|                            |                                                           | **Year ended**   |        | **Year ended** |
|                            |                                                           | **February 28,** |        | **February 29,** |
|                            |                                                           | **2009**         |        | **2008** |
|                            |                                                           | **$**            |        | **$** |
|                            |                                                           |                  |        |  |
|                            |                                                           |                  |        |  |
|                            | Balance - Beginning of year                                    | 14,896,717       |        | 9,738,536 |
|                            |                                                           |                  |        |  |
|                            | Costs incurred during the year                                 |                  |        |  |
|                            |                                                           |                  |        |  |
|                            | Acquisition of mining properties                               | 4,750,000        |        | 124,000 |
|                            | Claims and permits                                             | 563,628          |        | 749,469 |
|                            | Analyses                                                       | 734,949          |        | 506,819 |
|                            | Drilling                                                       | 4,627,792        |        | 2,663,005 |
|                            | Geophysics                                                     | 1,805,079        |        | 1,146,434 |
|                            | Geology                                                        | 438,847          |        | 585,843 |
|                            | Geochemistry                                                   | 21,136           |        | 131,040 |
|                            | Transport                                                      | 3,158,826        |        | 2,978,877 |
|                            | Fees                                                           | 2,120,464        |        | 1,453,003 |
|                            | Accommodation                                                  | 355,628          |        | 316,540 |
|                            |                                                           | 18,576,349       |        | 10,655,030 |
|                            |                                                           |             |   |   |
|                            | Mining properties under option                                 | (45,762)         |   | (359,472) |
|                            | Mining properties abandoned, written off or sold               | (2,048,536)      |   | (640,557) |
|                            | Credit on duties refundable for loss and refundable tax credit |             |   |   |
|                            | for resources                                                  | (4,304,389)      |        | (4,496,820) |
|                            |                                                           | (6,398,687)      |        | (5,496,849) |
|                            |                                                           |                  |        |  |
|                            | Balance - End of year                                          | 27,074,379       |        | 14,896,717 |

> 
a) On March 1, 2007, the company granted Exploration Matamec Inc. ("Matamec") the option to acquire a 100% interest in the            Uranium Nord property for a consideration consisting of $47,532 in cash and the issuance of 200,000 shares of a company that    will be incorporated later by Matamec. As at February 28, 2009, Matamec made a cash payment of $47,532 to acquire a 50%  interest.

 b) On April 26, 2007, IAMGOLD Corporation granted the company the option to acquire a 100% interest in the Anatacau              property for a consideration consisting of $25,000 in cash and exploration work totalling $3,000,000 to be carried out no later              than December 31, 2012. As at February 28, 2009, the company made a cash payment of $25,000 and spent $1,117,048 on            exploration work.

----

**Virginia Mines Inc.**  (an exploration company)Notes to Financial Statements

  (expressed in Canadian dollars)

> 
 c) On May 8, 2007, the company granted Breakwater Resources Ltd. ("Breakwater") the option to acquire a 50% interest in the    Trieste property for a consideration consisting of $50,000 in cash and exploration work totalling $1,000,000 no later than May 8,    2011. As at February 28, 2009 Breakwater made a cash payment of $50,000 and spent $437,552 on exploration work.

 d) On August 20, 2007, the company granted Breakwater the option to acquire a 50% interest in the Lac Gayot property for a    consideration consisting of $170,000 in cash over a four year period and exploration work totalling $10,000,000 no later than    August 20, 2016. As at February 28, 2009 Breakwater made a cash payment of $35,000 and spent $950,539 on exploration work.

 e) On December 11, 2008, the company announced the execution of an agreement with Breakwater pursuant to which the company    acquired Breakwater's 50% undivided interest in the Coulon JV property in consideration for the issuance of 1,666,666 shares of    the company to Breakwater. Under the terms of this agreement, Breakwater does not retain any interest or royalty in the property.    The company has become the sole owner of the Coulon property.

----

| **Virginia Mines Inc.**         |                                                   |                                   |                  |   |
|---------------------------------|--------------------------------------------------------|----------------------------------------|-----------------------|--------|
| (an exploration company)        |                                                   |                                   |                  |   |
| Notes to Financial Statements   |                                                   |                                   |                  |   |
|                            |                                                   |                                   |                  |   |   |   |
| (expressed in Canadian dollars) |                                                   |                                   |                  |   |
|                            |                                                   |                                   |                  |   |   |   |
|                            | **Cost of Mining Properties Abandoned or Written Off** |
|                            |                                                   |                                   |                  |   |   |   |
|                            |                                                   |                                   | **Year ended**        |        | **Year ended** | **Year ended** |
|                            |                                                   |                                   | **February 28,** |        | **February 29,** | **February 28,** |
|                            |                                                   |                                   | **2009**              |        | **2008** | **2007** |
|                            |                                                   |                                   | **$**                 |        | **$** | **$** |
|                            |                                                   |                                   |                  |   |   |   |
|                            |                                                   | Angilbert                              | 43,540                |   | - | - |
|                            |                                                   | Apple                                  | -                     |   | - | 41,914 |
|                            |                                                   | Auclair                                | 28,567                |   | - | 385,706 |
|                            |                                                   | Barbanègre                      | 29,746                |   | - | - |
|                            |                                                   | Champdoré                       | 76,229                |   | - | - |
|                            |                                                   | Corvet Est                             | 110,669               |   | - | - |
|                            |                                                   | Coulon                                 | -                     |   | 195,167 | - |
|                            |                                                   | Éléonore Régional | -                     |   | - | 10,545 |
|                            |                                                   | EM1                                    | -                     |   | - | 109,694 |
|                            |                                                   | Gipouloux                              | 439,425               |   | - | - |
|                            |                                                   | Gossan JFO                             | -                     |   | - | 7,599 |
|                            |                                                   | Hélène                   | -                     |   | 54,216 | - |
|                            |                                                   | Eider                                  | -                     |   | 112 | 60,228 |
|                            |                                                   | Eakins                                 | -                     |   | - | 40,751 |
|                            |                                                   | Lac Clarkie                            | -                     |   | 34,972 | - |
|                            |                                                   | Lac Fagnant                            | 8,852                 |   | - | - |
|                            |                                                   | Lac Gayot                              | 66,325                |   | - | - |
|                            |                                                   | Lac Hayot                              | -                     |   | - | 7,956 |
|                            |                                                   | Wahemen                                | -                     |   | - | 25,581 |
|                            |                                                   | LG 3.5                                 | 16,341                |   | - | - |
|                            |                                                   | Laguiche                               | 326,022               |   | 96,830 | - |
|                            |                                                   | Megatem                                | -                     |   | - | 943,757 |
|                            |                                                   | Megatem III                            | -                     |   | - | 247,137 |
|                            |                                                   | Narber                                 | 85,239                |   | - | - |
|                            |                                                   | Nemiscau                               | -                     |   | 116,597 | - |
|                            |                                                   | Nichicun                               | 285,576               |   | - | - |
|                            |                                                   | Noëlla                            | 10,357                |   | - | - |
|                            |                                                   | Phoenix                                | 158,447               |   | - | - |
|                            |                                                   | Piscau                                 | 59,361                |        | - | - |
|                            |                                                   | Rivière Broadback               | -                     |   | 73,068 | - |
|                            |                                                   | Rivière Georges                 | 15,358                |   | - | - |
|                            |                                                   | Rivière Giard                   | 147,817               |   | - | - |
|                            |                                                   | Saganash                               | 41,789                |   | - | - |
|                            |                                                   | Uranium Sud                            | 18,313                |   | 9,202 | - |
|                            |                                                   | Willbob                                | 46,093                |   | 22,193 | - |
|                            |                                                   | 23D                                    | -                     |   | - | 8,199 |
|                            |                                                   | YZW                                    | 31,677                |   | - | - |
|                            |                                                   | Other                                  | 2,751                 |        | 9,154 | 20,206 |
|                            |                                                   |                                   |                       |        |  |  |
|                            |                                                   | Total *                                | 2,048,494             |        | 611,511 | 1,909,273 |

* Mining properties are abandoned or written off in whole or in part because of their low discovery potential.

----

| **Virginia Mines Inc.**         |
|---------------------------------|
| (an exploration company)        |
| Notes to Financial Statements   |
|                            |   |
| (expressed in Canadian dollars) |
|                            |   |
| **8**                           | **Share Capital** |
|                            |   |
|                            | Authorized |
|                            | Unlimited number of common shares, voting and participating, without par value |
|                            | Issued and fully paid |
|                            |   |
|                            | The number of shares in Share Capital changed as follows: |
|                            |   |

|   |                                                     | **Year ended February 28, 2009** | **Year ended February 29, 2008** | **Year ended February 28, 2007** |
|--------|----------------------------------------------------------|--------------------------------------------|--------------------------------------------|--------------------------------------------|
|   |                                                     |                                       |                                       |                                       |
|   | Balance - beginning of year                              | 27,005,110                                 | 26,425,698                                 | 24,078,286                                 |
|   |                                                     |                                       |                                       |                                       |
|   | Warrants exercised                                       | -                                          | 484,162                                    | 415,426                                    |
|   | Stock options exercised                                  | 30,000                                     | 80,250                                     | 62,500                                     |
|   | Unit options exercised                                   | -                                          | -                                          | 47,865                                     |
|   | Warrants (units) exercised                               | -                                          | -                                          | 11,216                                     |
|   | Acquisition of a mining property (note 7e)               | 1,666,666                                  | 15,000                                     | 600,000                                    |
|   | Issuance of flow-through shares for a cash consideration | 500,000                                    | -                                          | 1,210,405                                  |
|   |                                                     |                                            |                                            |                                            |
|   | Balance - end of year                                    | 29,201,776                                 | 27,005,110                                 | 26,425,698                                 |
|   |                                                     |                                       |                                       |                                       |

| **9** | **Warrants** |
|-------|--------------|

|   |                                                                    | **Year ended        February 28, 2009** | **Year ended         February 29, 2008** | **Year ended        February 28, 2007** |
|--------|-------------------------------------------------------------------------|--------------------------------------------------------|---------------------------------------------------------|--------------------------------------------------------|
|   |                                                                    |
|   |                                                                    | ****                                                   | **Weighted**                                            | ****                                                   | **Weighted** | **** | **Weighted** |
|   |                                                                    |                                                        | **Average**                                             |                                                        | **Average** |  | **Average** |
|   |                                                                    | **Number**                                             | **Exercise Price**                                      | **Number**                                             | **Exercise Price** | **Number** | **Exercise Price** |
|   |                                                                    |                                                        | **$**                                                   |                                                        | **$** |  | **$** |
|   |                                                                    |                                                   |                                                    |                                                   |   |   |   |
|   | Outstanding - beginning of year                                         | -                                                      | -                                                       | 484,162                                                | 5.84 | (2) 417,712 | 10.80 |
|   | Granted                                                                 | (1) 25,000                                             | 9.00                                                    | -                                                      | - | (3) 484,162 | 5.84 |
|   | Exercised                                                               | -                                                      | -                                                       | (484,162)                                              | 5.84 | (415,426) | 10.80 |
|   | Expired                                                                 | -                                                      | -                                                       | -                                                      | - | (2,286) | 10.80 |
|   | Outstanding and exercisable - end of year | 25,000                                                 | 9.00                                                    | -                                                      | - | 484,162 | 5.84 |
|   |                                                                         |                                                   |                                                    |                                                   |   |   |  |

| (1)    | These 25,000 warrants were granted through a private placement and expire on December 5, 2009.                              |
|--------|-----------------------------------------------------------------------------------------------------------------------------|
| (2)    | Under the agreement entered into with Goldcorp Inc. ("Goldcorp"), 11% of the exercise price of those warrants has |
|   | been cashed by the company and the balance has been allocated to Goldcorp (see note 14).                                    |
| (3)    | These 484,162 warrants of $5.84 were granted under a private placement with Goldcorp.                                       |

----

| **Virginia Mines Inc.**         |                                                                                                                     |                             |                        |
|---------------------------------|--------------------------------------------------------------------------------------------------------------------------|----------------------------------|-----------------------------|
| (an exploration company)        |                                                                                                                     |                             |                        |
| Notes to Financial Statements   |                                                                                                                     |                             |                        |
|                            |                                                                                                                     |                             |                        |   |
| (expressed in Canadian dollars) |                                                                                                                     |                             |                        |
|                            | The fair value of warrants granted has been estimated by using the Black & Sholes valuation model with the following |
|                            | assumptions:                                                                                                             |                             |                        |   |
|                            |                                                                                                                     |                             |                        |   |
|                            |                                                                                                                     | **Year ended      February 28,** | **Year ended February 29,** | **Year ended February 28,** |
|                            |                                                                                                                     | **2009**                         | **2008**                    | **2007** |
|                            |                                                                                                                     |                                  |                             |  |
|                            | Risk-free interest rate                                                                                                  | 2.78%                            | -                           | 4.11% |
|                            | Expected volatility                                                                                                      | 53%                              | -                           | 50% |
|                            | Dividend yield                                                                                                           | Nil                              | -                           | Nil |
|                            | Weighted average expected life                                                                                           | 18 months                        | -                           | 18 months |
|                            | Weighted average fair value of warrants granted                                                                          | $1.079                           | -                           | $0.539 |

**10 Stock Options, Unit Options and Warrants (Units)**

> 
**a) Stock Option Plan**

On March 24, 2006, the company established a new stock option plan under which certain key employees, officers, directors and    suppliers may be granted stock options of the company. The number of stock options can't exceed, at any time, 10% of the    number of outstanding shares. Options vest immediately, except for 50,000 options granted to an officer, which will vest until  December 16, 2009, and are exercisable over a maximum period of ten years following the grant date.

The following table presents the stock option activity since March 1, 2006 and summarizes information about stock options  outstanding and exercisable as at February 28, 2009:

|                            |      | Year ended       February 28, 2009 | Year ended     February 29, 2008 | Year ended     February 28, 2007 |
|---------------------------------|-----------|------------------------------------|----------------------------------|----------------------------------|
|                            |      |
|                            |      | ****                               | Weighted                         | ****                             | Weighted | **** | Weighted |
|                            |      |                                    | Average                          |                                  | Average |  | Average |
|                            |      | Number                             | Exercise Price              | Number                           | Exercise Price | Number | Exercise Price |
|                            |      |                                    | $                                |                                  | $ |  | $ |
|                            |      |                               |                             |                             |   |   |   |
| Outstanding - beginning of year | 1,367,000 | 4.80                               | 1,086,500                        | 4.18                             | - | - |
| Granted                         |      | 492,000                            | 4.81                             | 361,750                          | 6.53 | 1,166,000 | 4.17 |
| Exercised                       |      | (30,000)                           | 4.11                             | (80,250)                         | 4.39 | (72,500) | 3.93 |
| Expired                         |      | (127,500)                          | 4.87                             | (1,000)                          | 6.30 | (7,000) | 4.20 |
|                            |      |                                    |                                  |                                  |  |  |  |
| Outstanding - End of year       | 1,701,500 | 4.80                               | 1,367,000                        | 4.80                             | 1,086,500 | 4.18 |
|                            |      |                               |                             |                             |   |   |   |
| Exercisable - End of year       | 1,651,500 | 4.76                               | 1,367,000                        | 4.80                             | 996,500 | 4.16 |

----

**Virginia****Mines Inc.**  (an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

The following table summarizes information about stock options outstanding and exercisable as at February 28, 2009:

| Options outstanding | Options exercisable |
|---------------------|---------------------|

|                                          |            |                                                                    |       | **Weighted Average Exercise Price** |           | **Weighted       Average       Exercise       Price** |
|------------------------------------------|------------|--------------------------------------------------------------------|-------|-------------------------------------|-----------|-------------------------------------------------------|
|                                          |            | **Weighted Average     Remaining Contractual Life** |       |
| **Range of Exercise****Price** | **Number** |                                                                    |
| **Number**                               |
|                                          |            | **(years)**                                                        | **$** |                                     | **$**     |
|                                          |            |                                                                    |       |                                     |           |                                                       |
| $3.21 to $4.44                           | 1,109,250  |                                                                    | 7.09  | 4.06                                | 1,109,250 | 4.06                                                  |
| $5.22 to $7.08                           | 592,250    |                                                                    | 8.73  | 6.19                                | 542,250   | 6.20                                                  |

The fair value of stock options granted has been estimated by using the Black & Scholes model with the followingassumptions:

|                                           | **Year ended February 28,** | **Year ended February 29,** | **Year ended February 28,** |
|------------------------------------------------|----------------------------------|----------------------------------|----------------------------------|
|                                           | **2009**                         | **2008**                         | **2007**                         |
|                                           |                                  |                                  |                                  |
| Risk-free interest rate                        | 2.92%                            | 4.00%                            | 4.29%                            |
| Expected volatility                            | 56%                              | 53%                              | 63%                              |
| Dividend yield                                 | Nil                              | Nil                              | Nil                              |
| Weighted average expected life                 | 64 months                        | 72 months                        | 82 months                        |
| Weighted average fair value of options granted | $2.334                           | $3.524                           | $2.685                           |

**b) Unit options**

The following table presents the unit option activity since March 1, 2006 and summarizes information about unit optionsoutstanding and exercisable as at February 28, 2009:

|                                                |        | **Year ended    February 28, 2009** | **Year ended    February 29, 2008** | **Year ended    February 28, 2007** |
|-----------------------------------------------------|-------------|-------------------------------------|-------------------------------------|-------------------------------------|
|                                                |        |
|                                                |        | ****                                | **Weighted**                        | ****                                | **Weighted** | **** | **Weighted** |
|                                                |        |                                     | **Average**                         |                                     | **Average** |  | **Average** |
|                                                |        | **Number**                          | **Exercise Price**                  | **Number**                          | **Exercise Price** | **Number** | **Exercise Price** |
|                                                |        |                                     | **$**                               |                                     | **$** |  | **$** |
|                                                |        |                                |                                |                                |   |   |   |
| Outstanding - beginning of year | -           | -                                   | -                                   | -                                   | 47,865 | 8.20 |
| Exercised                                           | -           | -                                   | -                                   | -                                   | (47,865) | 8.20 |
|                                                |        |                                |                                |                                |   |   |   |
| Outstanding and exercisable -                       |        |                                |                                |                                |   |   |
|                                                | end of year | -                                   | -                                   | -                                   | - | - | - |

----

| **Virginia Mines Inc.**         |                                                                                                                                                                                  |                                 |                                 |       |                         |
|---------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------------------------------------|--------------------------------------|------------|-------------------------|
| (an exploration company)        |                                                                                                                                                                                  |                                 |                                 |       |                    |
| Notes to Financial Statements   |                                                                                                                                                                                  |                                 |                                 |       |                    |
|                            |                                                                                                                                                                                  |                                 |                                 |       |                    |   |   |
| (expressed in Canadian dollars) |                                                                                                                                                                                  |                                 |                                 |       |                    |   |
|                            |                                                                                                                                                                                  |                                 |                                 |       |                    |   |   |
|                            | **c) Warrants (Units)**                                                                                                                                                               |                                 |                                 |       |                    |   |
|                            |                                                                                                                                                                                  |                                 |                                 |       |                    |   |   |
|                            | The following table presents the warrants (units) activity since March 1, 2006 and summarizes information about warrants (units) outstanding and exercisable as at February 28, 2009: |
|                            |
|                            |                                                                                                                                                                                  |                                 |                                 |       |                    |   |   |
|                            | **Year ended     February 28, 2009**                                                                                                                                                  | **Year ended     February 29, 2008** | **Year ended     February 28, 2007** |
|                            |                                                                                                                                                                                  | ****                                 | **Weighted**                         | ****       | **Weighted**            | **** | **Weighted** |
|                            |                                                                                                                                                                                  |                                      | **Average**                          |            | **Average**             |  | **Average** |
|                            |                                                                                                                                                                                  | **Number**                           | **Exercise Price**              | **Number** | **Exercise Price** | **Number** | **Exercise Price** |
|                            |                                                                                                                                                                                  |                                      | **$**                                |            | **$**                   |  | **$** |
|                            |                                                                                                                                                                                  |                                      |                                      |            |                         |  |  |
|                            | Outstanding - beginning of year                                                                                                                                   | -                                    | -                                    | -          | -                       | - | - |
|                            | Further to the exercise of unit                                                                                                                                                       |                                      |                                      |            |                         |  |  |
|                            | ****options (1)                                                                                                                                                                       | -                                    | -                                    | -          | -                       | 11,966 | 10.80 |
|                            | Exercised                                                                                                                                                                             | -                                    | -                                    | -          | -                       | (11,216) | 10.80 |
|                            | Expired                                                                                                                                                                               | -                                    | -                                    | -          | -                       | (750) | 10.80 |
|                            |                                                                                                                                                                                  |                                      |                                      |            |                         |  |  |
|                            | Outstanding and exercisable -                                                                                                                                                         |                                      |                                      |            |                         |  |  |
|                            | ****end of year                                                                                                                                                                       | -                                    | -                                    | -          | -                       | - | - |
|                            |                                                                                                                                                                                  |                                 |                                 |       |                    |   |   |

| (1)    | Under the agreement entered into with Goldcorp, 11% of the exercise price of those warrants has been cashed by the company and the balance has been allocated to Goldcorp (see note 14). |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   |

----

| **Virginia Mines Inc.**         |                                                                                                                          |                             |    |                             |                                  |
|---------------------------------|-------------------------------------------------------------------------------------------------------------------------------|----------------------------------|---------|----------------------------------|----------------------------------|
| (an exploration company)        |                                                                                                                          |                             |    |                             |                             |
| Notes to Financial Statements   |                                                                                                                          |                             |    |                             |                             |
|                            |                                                                                                                          |                             |    |                             |                             |   |
| (expressed in Canadian dollars) |                                                                                                                          |                             |    |                             |                             |
|                            |                                                                                                                          |                             |    |                             |                             |   |
| **11**                          | **Cash Flows**                                                                                                                |                             |    |                             |                             |   |
|                            |                                                                                                                          |                             |    |                             |                             |   |
|                            | a) Net change in non-cash working capital items                                                                               |                             |    |                             |                             |
|                            |                                                                                                                          | **Year ended February 28,** |         | **Year ended February 29,** | **Year ended February 28,** |   |
|                            |                                                                                                                          |                                  |    |
|                            |                                                                                                                          |                                  |    |
|                            |                                                                                                                          | **2009**                         |         | **2008**                         | **2007**                         |   |
|                            |                                                                                                                          | **$**                            |         | **$**                            | **$**                            |   |
|                            | Tax credits for mining exploration and commodity                                                                              |                             |    |                             |                             |   |
|                            | ****taxes receivable                                                                                                          | 654,495                          |    | (573,934)                        | 126,978                          |   |
|                            | Other amounts receivable                                                                                                      | 46,438                           |    | 7,497                            | 776,695                          |   |
|                            | Prepaid expenses                                                                                                              | 54,837                           |    | (31,549)                         | (11,072)                         |   |
|                            | Accounts payable and accrued liabilities                                                                                      | (1,566,342)                      |         | (364,360)                        | 2,391,081                        |   |
|                            |                                                                                                                          | (810,572)                        |         | (962,346)                        | 3,283,682                        |   |
|                            |                                                                                                                          |                             |    |                             |                             |   |
|                            |                                                                                                                          |                             |    |                             |                             |   |
|                            | b) Items not affecting cash and cash equivalents related to financing and investing activities, and interest received

  |
|                            |                                                                                                                          |                             |    | **Year ended February 28,** | **Year ended February 29,** | **Year ended February 28,** |
|                            |                                                                                                                          |                             |    | **2009**                         | **2008**                         | **2007** |
|                            |                                                                                                                          |                             |    | **$**                            | **$**                            | **$** |
|                            |                                                                                                                          |                             |    |                             |                             |   |
|                            | Credit on duties refundable for loss and refundable                                                                           |                             |    |                             |                             |   |
|                            | tax credit receivable with respect to exploration costs                                                                       |                             |    |                             |                             |
|                            | applied against mining properties                                                                                             |                             |    | 5,184,327                        | 6,060,655                        | 8,537,062 |
|                            | Acquisition of mining properties included in accounts payable                                                                 |                             |    |                             |                             |
|                            | ****and accrued liabilities                                                                                                   |                             |    | 272,317                          | 1,289,354                        | 351,752 |
|                            | Stock options exercised and included in share capital                                                                         |                             |    | 80,753                           | 219,847                          | 377,152 |
|                            | Warrants exercised and included in share capital                                                                              |                             |    | -                                | 261,114                          | 443,675 |
|                            | Warrants granted and included in issue expenses                                                                               |                             |    | 26,962                           | -                                | - |
|                            | Warrants (units) granted and included in share capital                                                                        |                             | -       | -                                | 62,203                           |
|                            | Warrants (units) exercised and included in share capital                                                                      |                             | -       | -                                | 58,302                           |
|                            | Unit options exercised and included in share capital                                                                          |                             | -       | -                                | 101,178                          |
|                            | Stock options expired and included in contributed surplus                                                                     |                             | 112,557 | 3,453                            | 18,411                           |
|                            | Share issue expenses resulting from the renunciation of tax deductions                                                        |                             |    |                             |
|                            | ****included in share capital                                                                                                 |                             |    | 1,135,530                        | -                                | - |
|                            | Mining properties sold in consideration of short-term investments                                                             |                             | 11,500  | 6,389,046                        | 4,662,774                        |
|                            | Acquisition of mining property in consideration of the issuance of shares                                                     | 4,750,000                        | 99,000  | 2,168,769                        |
|                            | Mining properties optioned in consideration of short-term investments                                                         | -                                | 15,000  | -                                |
|                            | Acquisitions of property, plant and equipment included in accounts                                                            |                             |    |                             |
|                            | ****payable and accrued liabilities                                                                                           |                             |    | -                                | 99,913                           | - |
|                            |                                                                                                                          |                             |    |                             |                             |   |
|                            | Interest received                                                                                                             |                             |    | 1,345,971                        | 1,500,479                        | 1,224,372 |

----

| **Virginia Mines Inc.**         |                         |                             |   |                                  |
|---------------------------------|------------------------------|----------------------------------|--------|----------------------------------|
| (an exploration company)        |                         |                             |   |                             |
| Notes to Financial Statements   |                         |                             |   |                             |
|                            |                         |                             |   |                             |   |
| (expressed in Canadian dollars) |                         |                             |   |                             |
|                            |                         |                             |   |                             |   |
|                            | c) Cash and cash equivalents |                             |   |                             |   |
|                            |                         | **As at      February 28,** |        | **As at      February 29,** | **As at      February 28,** |
|                            |                         |                                  |
|                            |                         | **2009**                         |        | **2008**                         | **2007** |
|                            |                         | **$**                            |        | **$**                            | **$** |
|                            |                         |                             |   |                             |   |
|                            | Cash                         | 7,633,221                        |   | 8,270,345                        | 4,141,247 |
|                            | Cash equivalents             | -                                |        | 394,909                          | 1,998,296 |
|                            |                         | 7,633,221                        |        | 8,665,254                        | 6,139,543 |

**12 Related Party Transactions**

> 
The company entered into the following transactions with companies owned by directors:

|                                      | **Year ended February 28,** |        | **Year ended February 29,** | **Year ended February 28,** |
|-------------------------------------------|-----------------------------|--------|-----------------------------|-----------------------------|
|                                      | **2009**                    |        | **2008**                    | **2007**                    |
|                                      | **$**                       |        | **$**                       | **$**                       |
|                                      |                        |   |                        |                        |
| Expenses capitalized in mining properties | -                           |        | 818,373                     | 362,357                     |
| Management fees                           | -                           |        | 300,000                     | 182,144                     |
| Rent, office expenses and other           | 257,123                     |        | 706,052                     | 1,125,988                   |
| General exploration costs                 | -                           |        | 201,582                     | 156,013                     |
|                                      | 257,123                     |        | 2,026,007                   | 1,826,502                   |

These transactions are in the normal course of operations and are measured at the exchange amount, which is the amountof consideration established and agreed to by the related parties.

----

| **Virginia Mines Inc.**         |                                                                                                                                                                                               |                        |   |                             |
|---------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|-----------------------------|--------|-----------------------------|
| (an exploration company)        |                                                                                                                                                                                               |                        |   |                        |
| Notes to Financial Statements   |                                                                                                                                                                                               |                        |   |                        |
|                            |                                                                                                                                                                                               |                        |   |                        |   |
| (expressed in Canadian dollars) |                                                                                                                                                                                               |                        |   |                        |
|                            |                                                                                                                                                                                               |                        |   |                        |   |
| **13**                          | **Future Income Taxes**                                                                                                                                                                            |                        |   |                        |   |
|                            |                                                                                                                                                                                               |                        |   |                        |   |
|                            | The reconciliation of income taxes, calculated using the combined federal and Quebec provincial statutory tax rates, to income taxes presented in the financial statements is detailed as follows: |
|                            |
|                            |                                                                                                                                                                                               | **Year ended February 28,** |        | **Year ended February 29,** | **Year ended February 28,** |
|                            |                                                                                                                                                                                               | **2009**                    |        | **2008**                    | **2007** |
|                            |                                                                                                                                                                                               | **$**                       |        | **$**                       | **$** |
|                            |                                                                                                                                                                                               |                        |   |                        |   |
|                            |                                                                                                                                                                                               |                        |   |                        |   |
|                            | Earnings (loss) before income taxes and the discontinued operation                                                                                         | (4,357,203)                 |        | (239,740)                   | 218,642 |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Combined federal and provincial income tax rates of                                                                                                                                                |                             |        |                             |  |
|                            | ****30.90% (31.92% as at February 29, 2008 and 33.69% as at                                                                                                                                        |                             |        |                             |  |
|                            | ****February 28, 2007)                                                                                                                                                                             | 1,346,000                   |        | 77,000                      | (74,000) |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Non-taxable credit on duties refundable for loss                                                                                                                                                   | 221,000                     |        | 239,000                     | 96,000 |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Non-deductible stock-based compensation                                                                                                                                                            | (304,000)                   |        | (417,000)                   | (1,109,000) |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Share issue expenses not affecting                                                                                                                                                                 |                             |        |                             |  |
|                            | ****earnings                                                                                                                                                                                       | 103,000                     |        | -                           | 8,000 |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Non-taxable portion of capital gain                                                                                                                                                                | 46,000                      |        | 333,000                     | 16,000 |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Non-deductible writedown and unrealized loss on investments                                                                                                                                        | (297,000)                   |        | (1,215,000)                 | - |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Non-taxable revenue                                                                                                                                                                                | 14,000                      |        | 23,000                      | - |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Change in enacted tax rates                                                                                                                                                                        | -                           |        | 32,000                      | - |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Future income tax assets generated by the plan                                                                                                                                                     |                             |        |                             |  |
|                            | ****of arrangement as described in note 14                                                                                                                                                         | -                           |        | -                           | 5,478,000 |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Other                                                                                                                                                                                              | 44,153                      |        | 66,986                      | (35,000) |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Change in valuation allowance                                                                                                                                                                      | (424,000)                   |        | 715,000                     | (4,380,000) |
|                            |                                                                                                                                                                                               |                             |        |                             |  |
|                            | Future income taxes                                                                                                                                                                                | 749,153                     |        | (146,014)                   | - |

----

| **Virginia Mines Inc.**         |                                                                                                    |                             |   |                                  |
|---------------------------------|---------------------------------------------------------------------------------------------------------|----------------------------------|--------|----------------------------------|
| (an exploration company)        |                                                                                                    |                             |   |                             |
| Notes to Financial Statements   |                                                                                                    |                             |   |                             |
|                            |                                                                                                    |                             |   |                             |   |
| (expressed in Canadian dollars) |                                                                                                    |                             |   |                             |
|                            |                                                                                                    |                             |   |                             |   |
|                            | The significant components of future income tax assets and liabilities are detailed as follows:

  |                             |
|                            |                                                                                                    | **As at      February 28,** |        | **As at      February 29,** | **As at      February 28,** |
|                            |                                                                                                    | **2009**                         |        | **2008**                         | **2007** |
|                            |                                                                                                    | **$**                            |        | **$**                            | **$** |
|                            | Future income tax assets                                                                                |                                  |        |                                  |  |
|                            | ****Short-term investments                                                                              | 1,191,000                        |        | 453,000                          | 473,000 |
|                            | ****Mining properties                                                                                   | 1,538,000                        |        | 1,938,000                        | 3,899,000 |
|                            | ****Long-term investments                                                                               | 404,000                          |        | 384,000                          | - |
|                            | ****Share issue expenses                                                                                | 75,000                           |        | 4,000                            | 6,000 |
|                            | ****Other                                                                                               | 1,000                            |        | 6,000                            | 2,000 |
|                            |                                                                                                    | 3,209,000                        |        | 2,785,000                        | 4,380,000 |
|                            |                                                                                                    |                                  |        |                                  |  |
|                            | Valuation allowance                                                                                     | (3,209,000)                      |        | (2,785,000)                      | (4,380,000) |
|                            |                                                                                                    | -                                |        | -                                | - |

As at February 28, 2009, the non-refundable federal tax credits and non-refundable provincial tax credits for resources    were as follows:

| Expiry Date | Federal |  | Expiry Date | Provincial |
|-------------|---------|--|-------------|------------|
|             | $       |  |             | $          |
| 2027        | 234,114 |  | 2017        | 249,391    |
| 2028        | 625,925 |  | 2018        | 545,564    |
| 2029        | 533,078 |  |             |            |

These credits can be used up to the amount of income taxes payable for those years. These credits are not recognized    because the company does not have the reasonable assurance that the credits will be realized.

----

**Virginia Mines Inc**.(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

**14Discontinued Operation**

> 
At a special shareholders' meeting held on March 24, 2006, a majority of Virginia Gold Mines Inc. ( "Virginia Gold Mines")    shareholders voted in favour of the plan of arrangement (effective March 31, 2006) involving Goldcorp, Virginia Gold Mines  and the company. The transaction was completed on March 31, 2006.

 Further to this plan of arrangement, the following events occurred:

 Virginia Gold Mines became a wholly-owned subsidiary of Goldcorp, and holds the Eleonore property and assumed the    liabilities related to the Eleonore property. Effective April 25, 2006, the name Virginia Gold Mines was changed to "Les Mines    Opinaca Ltée".

 Virginia Gold Mines transferred to the company the assets not related to the Eleonore property at fair market value, for a    consideration consisting of the issuance of 18,017,817 shares by the company and the assumption by the company of the    liabilities not related to the Eleonore property, with the effect of increasing the deficit of $15,974,110 corresponding to the net    assets of Eleonore property and future income taxes assets of Virginia Gold Mines. Furthermore, the company has assumed the    continuing operations of Virginia Gold Mines, except for the Eleonore property.

 The company acquired from Virginia Gold Mines a production royalty on the Eleonore property, for a consideration consisting    of a cash payment of $16,099,000 and the issuance of 400 shares of the company. The stated value of the production royalty    acquired by the company from Virginia Gold Mines was nil, since they were entered into by related parties.

 Virginia Gold Mines then subscribed for 6,119,595 shares of the company for a cash consideration of $16,099,000.

 The reduction of Virginia Gold Mines' stated capital was paid in kind through a distribution of the shares of the company to its    shareholders. Each shareholder of Virginia Gold Mines received 0.5 share of the company for each share of Virginia Gold    Mines.

 In addition, each shareholder of Virginia Gold Mines has exchanged his/her shares at a rate of 0.4 share of Goldcorp for one    share of Virginia Gold Mines.

 Virginia Gold Mines' warrants outstanding as at March 31, 2006 ceased to be exercisable for shares of Virginia Gold Mines.    Each warrant now entitles the holder to receive, upon exercise in accordance with the agreed-upon terms, the number of shares    of Goldcorp and of the company that the holder would have received under the plan of arrangement if, immediately before the    effective time, such holder had been the registered holder of the number of shares of Virginia Gold Mines he would have been    entitled to upon exercise.

 These transactions between the company and Virginia Gold Mines have been recorded at the carrying value since they were    entered into by related parties.

----

| **Virginia Mines Inc.**         |                                                   |
|---------------------------------|--------------------------------------------------------|
| (an exploration company)        |                                                   |
| Notes to Financial Statements   |                                                   |
|                            |                                                   |   |
| (expressed in Canadian dollars) |                                                   |
|                            |                                                   |   |
| a)                              | Earnings of the discontinued operation                 |   |
|                            |                                                   |   |
|                            | **Year ended February 28,**                            |
|                            |                                                   | **2007** |
|                            |                                                   | **$** |
|                            |                                                   |   |
|                            | Operating loss before income taxes                     | (637,494) |
|                            |                                                   |   |
|                            | Net loss from the discontinued operation               | (637,494) |
|                            |                                                   |   |
|                            |                                                   |   |
| b)                              | Cash used by the discontinued operation is as follows: |   |
|                            |                                                   |   |
|                            | Year ended February 28,                                |
|                            |                                                   | **2007** |
|                            |                                                   | **$** |
|                            | **Cash flows used in operating activities**            |   |
|                            | Net loss from the discontinued operation               | (637,494) |
|                            | Items not affecting cash and cash equivalents          |   |
|                            | ****Deferred charges expensed during the year          | 341,722 |
|                            |                                                   | (295,772) |
|                            | Change in non-cash working capital items               |  |
|                            | ****Amounts receivable                                 | (688,989) |
|                            | ****Accounts payable and accrued liabilities           | (817,366) |
|                            |                                                   | (1,802,127) |
|                            |                                                   |  |
|                            | **Cash flows used in investing activities**            |  |
|                            | ****Acquisition of a mining property                   | (472,189) |
|                            |                                                   |  |
|                            | **Cash used by the discontinued operation**            | (2,274,316) |

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

**15 Earnings per Share**

> 
For the years ended February 28, 2009, February 29, 2008 and February 28, 2007, there was no difference between the basic and    diluted loss per share since the dilutive effect of stock options, warrants and unit options was not included in the calculation;    otherwise, the effect would have been anti-dilutive. Accordingly, the diluted loss per share for these years was calculated using  the basic weighted average number of shares outstanding.

|                                                      |          |       | **Year ended February 28,** |            | **Year ended February 29,** | **Year ended February 28,** |
|-----------------------------------------------------------|---------------|------------|-----------------------------|------------|-----------------------------|-----------------------------|
|                                                      |          |       |                             |
|                                                      |          |       |                             |
|                                                      |          |       | **2009**                    |            | **2008**                    | **2007**                    |
|                                                      |          |       | **$**                       |            | **$**                       | **$**                       |
|                                                      |          |       |                             |            |                             |                             |
| Basic weighted average number of shares outstanding       |          | 27,753,181 |                             | 26,610,238 | 25,724,742                  |
| Warrants                                                  |          | -          |                             | 33,232     | -                           |
| Stock options                                             |          | 105,572    |                             | 384,848    | 25,106                      |
| Unit options                                              |          | -          |                             | -          | 55                          |
|                                                      |          |       |                             |            |                             |                             |
| Diluted weighted average number of shares outstanding     |          | 27,858,753 |                             | 27,028,318 | 25,749,903                  |
|                                                      |          |       |                             |            |                             |                             |
| Items excluded from the calculation of diluted            |          |            |                             |            |                             |
| earnings per share because the exercise price was greater |          |            |                             |            |                             |
| than the average quoted value of the common shares        |          |            |                             |            |                             |
|                                                      | Warrants      |       | 25,000                      |            | -                           | 484,162                     |
|                                                      | Stock options |       | 592,250                     |            | 182,750                     | 616,500                     |

**16 Capital Management**

> 
The company considers the items included in shareholders' equity as capital components.

 The company manages its capital structure and makes adjustments to it, based on the funds available to the company, in order to    support the acquisition and exploration of mining properties. Given that the company is in the mineral exploration business, the    Board of Directors does not establish quantitative return on capital criteria for management, but rather relies on the expertise of    the company's management to sustain future development of the business.

 From the management point of view, the working capital as at February 28, 2009 will cover current expenditures and exploration    fees for the next following years.

 The mining properties in which the company currently has an interest are in the exploration stage. Since the company has enough    cash and cash equivalents, it is not dependent on external financing to fund its activities. Furthermore, the company can rely on    its partnership agreements, credit on duties refundable for loss, refundable tax credit for resources and its return on short-term    investments.

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

> 
On June 5, 2008, the company completed a private placement of $4,500,000. The proceeds from the offering were used mainly to  fund exploration on the Coulon JV project.

 On December 11, 2008, the company acquired Breakwater's 50% undivided interest in the Coulon JV property in consideration    for the issuance of 1,666,666 shares of the company to Breakwater.

 The other transactions which had an effect on shareholders' equity are presented in share capital.

 The company is not subject to externally imposed capital requirements or other external requirements.

**17 Commitments**

> 
On August 18, 2008, the company signed a rental lease for its administrative office with a company held by a director. The rental    lease has a term of five years beginning on August 1, 2008 and ending on July 31, 2013. The annual cost is $99,200 and will be  subject to an annual raise according to the consumer price index.

**18 Comparative Figures**

> 
 Certain comparative figures have been reclassified mainly in the Statements of Earnings (Loss) to conform with the current  year presentation.

 19 ****Subsequent Events

> 
**Credit agreement signed in relation with ABCPs**

 On March 16, 2009, the company signed a credit agreement with its financial institution (the "Bank") to receive a revolving credit    facility up to $1,487,278, which represents 75% of the par value of the MAV 3 Tracking Notes Ineligible Assets ("Restructured    Notes IA") received in exchange for ABCP supported by ineligible assets. In exchange, the company contracted to a mortgage    and a first plan security on Restructured Notes IA. These are held in a security account subject to the Bank securities and held by    a trust. The initial maturity of the credit agreement is two years from February 23, 2009.

 Under the credit agreement, the company will have the option, from February 23, 2011, to dispose of Restructuring Notes IA in    favour of the Bank in settlement of facility principal due on the revolving credit line for a maximum amount of $1,487,278,    regardless the fair value of Restructuring Notes IA at the option exercise date.

 The company's management will estimate the fair value of this option by using a model of valuation (Black & Scholes) with    observable data, if available.

 As at March 16, 2009, the fair value of this option was estimated at $1,284,000.

 This financial asset will be classified as held for trading in the company's financial statements.

**Agreement signed with MacDonald Mines Exploration Ltd. ("MacDonald Mines")**

 On May 6, 2009, the company entered into an agreement with MacDonald Mines on the Assinica property. As per the agreement,    MacDonald Mines has the option to acquire a 50% participating interest in the Assinica property, in consideration of payments    totalling $130,000 and $2,500,000 in exploration work to be carried out during the next four years. The company will be the    operator.

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

**20 United States Generally Accepted Accounting Principles**

> 
The financial statements have been prepared in accordance with Canadian GAAP which differ, in certain respects, from U.S.    GAAP as it relates to the company.

 The following disclosures summarize the principal measurement differences between Canadian and U.S. GAAP.

**a) Mining Properties**

 Under U.S. GAAP, the exploration costs related to unproven mineral reserves properties are expensed in the year in which they    are incurred.

 Under Canadian GAAP, the exploration costs incurred are capitalized until the property is sold or abandoned.

**b) Short-Term Investments**

 Under U.S. GAAP, short-term investments, such as bonds, trust units and public company shares are classified as available-for sale    securities or classified as securities held for trading in the case of warrants and convertible debentures. Consequently, these    securities are carried at fair value, with any unrealized holding gains or losses at balance sheet date being reflected in other    comprehensive income, net of income taxes, for available-for-sale securities and recognized in net earnings for securities held    for trading.

 Under Canadian GAAP, short-term investments were carried at the lower of cost and market value before March 1, 2007. Since    that date, there are no accounting differences between Canadian GAAP and U.S. GAAP.

**c) Flow-Through Shares**

 Canadian tax legislation allows a company to issue flow-through shares when the company agrees to incur qualifying    expenditures in accordance with the *Income Tax Act* and to renounce the related tax deductions in favour of investors who    acquire these shares.

 In accordance with Canadian GAAP, upon issuance of flow-through shares, funds received are recorded as share capital. When    qualifying expenditures are renounced, share capital is reduced by the amount of the tax benefits renounced in favour of    investors.

 Under U.S. GAAP, the premium or discount related to the price of flow-through shares, if any, is accounted for separately. When    the company renounces to qualifying expenditures, the related premium or discount is recognized through a reversal of the tax    provision, and future income tax liabilities are adjusted by the same amount through a charge to income. In addition, under U.S.    GAAP, amounts received upon the issuance of flow-through shares and not spent on exploration costs are presented separately    as exploration funds. Exploration funds must be excluded from cash in the statement of cash flows and presented in investing    activities.

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

> 
**d) Future Income Taxes**

 Under Canadian GAAP, the reversal of a valuation allowance directly related to an increase in value of available-for-sale    investments is recognized in net earnings, whereas under U.S. GAAP, such reversal is recorded in comprehensive income.

**New Accounting Standards**

**FASB Statement No. 161 - *Disclosure about Derivative Instruments and Hedging Activities - an Amendment of FASB  Statement no. 133* (SFAS 161)**

 In March 2008, the FASB issued SFAS 161, *Disclosure about Derivative Instruments and Hedging Activities -  an Amendment of FASB Statement no. 133*. According to this standard, which will require entities to provide enhanced disclosures    about derivative instruments and related hedged items and how they affect the entity's financial position, financial performance    and cash flows, the company will adopt this statement on March 1, 2009, and is currently evaluating the impact its adoption will    have on its note disclosures related to financial instruments.

**FASB Statement No. 162 - *The Hierarchy of Generally Accepted Accounting Principles*(SFAS 162)**

 In May 2008, the FASB issued SFAS 162, *The Hierarchy of Generally Accepted Accounting Principles*. The new    standard is intended to improve financial reporting by identifying a consistent framework, or hierarchy, for selecting    accounting principles to be used in preparing financial statements that are presented in conformity with U.S. GAAP for    non-governmental entities. For non-governmental entities, the guidance in SFAS 162 replaces that prescribed    in Statement on Auditing Standards (SAS) No. 69, *The Meaning of Present Fairly in Conformity with Generally    Accepted Accounting Principles* and will become effective 60 days following the SEC's approval of the Public    Company Accounting Oversight Board's amendments to AU Section 411, *The Meaning of Present Fairly    in Conformity with Generally Accepted Accounting Principles*. The company is currently evaluating the impact the    adoption of SFAS 162 will have on its financial statements.

----

| **Virginia Mines Inc.**         |                                                                    |                            |   |                        |
|---------------------------------|-------------------------------------------------------------------------|---------------------------------|--------|-----------------------------|
| (an exploration company)        |                                                                    |                            |   |                        |
| Notes to Financial Statements   |                                                                    |                            |   |                        |
|                            |                                                                    |                            |   |                        |   |
| (expressed in Canadian dollars) |                                                                    |                            |   |                        |
|                            |                                                                    |                            |   |                        |   |
|                            | **Reconciliation of Net Earnings (Net Loss) to Conform with U.S. GAAP** |                            |   |                        |
|                            |                                                                    |                            |   |                        |   |
|                            |                                                                    | **Year ended     February 28,** |        | **Year ended February 29,** | **Year ended February 28,** |
|                            |                                                                    | **2009**                        |        | **2008**                    | **2007** |
|                            |                                                                    | **$**                           |        | **$**                       | **$** |
|                            |                                                                    |                            |   | restated                    | restated |
|                            | Net earnings (net loss) from continuing operations                      |                            |   |                        |   |
|                            | ****in accordance with Canadian GAAP                                    | (3,608,050)                     |   | (385,754)                   | 218,642 |
|                            | Mining properties (a)                                                   | (7,701,563)                     |   | (4,284,712)                 | (263,188) |
|                            | Unrealized gains on held-for-trading investments (b)                    | -                               |   | -                           | 1,591,330 |
|                            | Tax effect of flow-through shares (c)                                   | 374,470                         |   | -                           | - |
|                            | Future income taxes (d)                                                 | 386,377                         |        | 146,014                     | - |
|                            |                                                                    |                                 |        |                             |  |
|                            | Net earnings (net loss) from continuing operations in accordance        |                                 |        |                             |  |
|                            | ****with U.S. GAAP                                                      | (10,548,766)                    |        | (4,524,452)                 | 1,546,784 |
|                            |                                                                    |                                 |        |                             |  |
|                            | Net loss from the discontinued operation in accordance with             |                                 |        |                             |  |
|                            | ****U.S. GAAP                                                           | -                               |        | -                           | (637,494) |
|                            | Net earnings (net loss) in accordance with U.S. GAAP                    | (10,548,766)                    |        | (4,524,452)                 | 909,290 |
|                            |                                                                    |                            |   |                        |   |
|                            |                                                                    |                            |   |                        |   |
|                            | Basic and diluted net earnings (net loss) per share from continuing     |                            |   |                        |   |
|                            | ****operations in accordance with U.S. GAAP                             | (0.380)                         |   | (0.170)                     | 0.060 |
|                            |                                                                    |                            |   |                        |   |
|                            | Basic and diluted net loss per share from the discontinued              |                            |   |                        |   |
|                            | ****operation in accordance with U.S. GAAP                              | -                               |        | -                           | (0.025) |
|                            |                                                                    |                                 |        |                             |  |
|                            | Total basic and diluted net earnings (net loss) per share in accordance |                                 |        |                             |
|                            | ****with U.S. GAAP                                                      | (0.380)                         |        | (0.170)                     | 0.035 |

**Changes in U.S. GAAP Significant Accounting Policies and Restatement**

 Following a review of the financial statements for the year 2008 by the *Securities and Exchange Commission*, the company  determined to make the following accounting policy change under U.S. GAAP and has restated its financial statements for the  years ended February 29, 2008 and February 28, 2007 to conform to this change.

 Before June 1, 2004, the company had expensed the acquisition costs of mining properties, the mining rights and exploration fees.

 Pursuant to EITF 04-02, *Whether Mineral Rights are Tangible or Intangible Assets and Related Issues*, the company has modified  its accounting policy, retroactively effective to June 1, 2004, to capitalize the acquisition of mining properties and mining rights  until the mining property is sold or abandoned. If the acquired mineral rights relate to unproven properties, the company does not  amortize the capitalized mining costs, but evaluates them periodically for impairment.

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

> 
The U.S. GAAP reconciliation has been restated to take into account the capitalization of costs related to the acquisition of    mining properties and mining rights previously expensed.

 The effects of the restatement are as follows:

|                                                  |                                                      | **As previously reported** |                 |             |                 |             |
|-------------------------------------------------------|-----------------------------------------------------------|---------------------------------|-----------------|-------------|----------------------|-------------|
|                                                  |                                                      |                                 | **Restatement** |        | **Balance restated** |
|                                                  |                                                      | **$**                           |                 | **$**       |                 | **$**       |
| **Impact on the opening balance as at March 1, 2006** |                                                      |                            |            |        |                 |
|                                                  | Mining properties                                         | -                               |            | 2,035,736   |                 | 2,035,736   |
|                                                  | Shareholders' Equity                                      | 60,968,479                      |            | 2,035,736   |                 | 63,004,215  |
|                                                  |                                                      |                            |            |        |                 |        |
| **Year ended February 28, 2007**                      |                                                      |                            |            |        |                 |
| **Impact on Statement of Earnings**                   |                                                      |                            |            |        |                 |
|                                                  | Mining properties                                         | (3,171,224)                     |            | 2,908,036   |                 | (263,188)   |
|                                                  | Net earnings (net loss) from continuing operations        | (1,361,252)                     |            | 2,908,036   |                 | 1,546,784   |
|                                                  | Net earnings (net loss)                                   | (1,998,746)                     |            | 2,908,036   |                 | 909,290     |
|                                                  | Basic and diluted net earnings (net loss) per share       |                            |            |        |                 |        |
|                                                  | ****from continuing operations                            | (0.053)                         |            | 0.113       |                 | 0.060       |
|                                                  | Total basic and diluted net earnings (net loss) per share | (0.078)                         |            | 0.113       |                 | 0.035       |
| **Impact on Balance Sheet**                           |                                                      |                            |            |        |                 |
|                                                  | Mining properties                                         | -                               |            | 4,943,772   |                 | 4,943,772   |
|                                                  | Shareholders' Equity                                      | 51,444,578                      |            | 4,943,772   |                 | 56,388,350  |
| **Impact on Cash Flows**                              |                                                      |                            |            |        |                 |
|                                                  | Operating activities from continuing operations           | (195,673)                       |            | 1,151,337   |                 | 955,664     |
|                                                  | Investing activities from continuing operations           | (7,996,187)                     |            | (1,151,337) |                 | (9,147,524) |
|                                                  |                                                      |                            |            |        |                 |        |
| **Year ended February 29, 2008**                      |                                                      |                            |            |        |                 |
| **Impact on Statement of Earnings**                   |                                                      |                            |            |        |                 |
|                                                  | Mining properties                                         | (5,158,181)                     |            | 873,469     |                 | (4,284,712) |
|                                                  | Net loss                                                  | (5,397,921)                     |            | 873,469     |                 | (4,524,452) |
|                                                  | Basic and diluted net loss per share                      | (0.203)                         |            | 0.033       |                 | (0.170)     |
| **Impact on Balance Sheet**                           |                                                      |                            |            |        |                 |
|                                                  | Mining properties                                         | -                               |            | 5,817,241   |                 | 5,817,241   |
|                                                  | Shareholders' Equity                                      | 49,683,753                      |            | 5,817,241   |                 | 55,500,994  |
| **Impact on Cash Flows**                              |                                                      |                            |            |        |                 |
|                                                  | Operating activities                                      | (2,407,773)                     |            | 774,469     |                 | (1,633,304) |
|                                                  | Investing activities                                      | 1,756,156                       |            | (774,469)   |                 | 981,687     |

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial Statements

 (expressed in Canadian dollars)

| **Reconciliation of Shareholders' Equity to Conform with U.S. GAAP** |                                       |   |
|----------------------------------------------------------------------|--------------------------------------------|--------|
|                                                                 |                                       |   |   |
|                                                                 | **As at      February 28, 2009** |   | **As at      February 29, 2008** |
|                                                                 | **$**                                      |   | **$** |
|                                                                 |                                            |   | restated |
|                                                                 |                                       |   |   |
| Shareholders' Equity in accordance with Canadian GAAP      | 66,875,100                                 |   | 64,580,470 |
| Mining properties (a)                                                | (16,781,039)                               |        | (9,079,476) |
|                                                                 |                                            |        |  |
| Shareholders' Equity in accordance with U.S. GAAP                    | 50,094,061                                 |        | 55,500,994 |

**Statements of Cash Flows under U.S. GAAP**

|                                                      | **Year ended February 28,** |        | **Year ended February 29,** | **Year ended February 28,** |
|-----------------------------------------------------------|-----------------------------|--------|-----------------------------|-----------------------------|
|                                                      | **2009**                    |        | **2008**                    | **2007**                    |
|                                                      | **$**                       |        | **$**                       | **$**                       |
|                                                      |                             |        | restated                    | restated                    |
|                                                      |                        |   |                        |                        |
| Cash flows from (used in) continuing operating activities | (9,557,752)                 |   | (1,633,304)                 | 955,664                     |
| Cash flows used in the discontinued operating activity    | -                           |   | -                           | (1,802,127)                 |
|                                                      |                        |   |                        |                        |
| Cash flows from financing activities                      | 4,289,455                   |   | 3,177,328                   | 6,149,808                   |
|                                                      |                        |   |                        |                        |
| Cash flows from (used in) continuing operating activities | 4,236,264                   |   | 981,687                     | (9,147,524)                 |
| Cash flows used in the discontinued operating activity    | -                           |        | -                           | (472,189)                   |
|                                                      |                             |        |                             |                             |
| Increase (decrease) in cash and cash equivalents          | (1,032,033)                 |        | 2,525,711                   | (4,316,368)                 |
|                                                      |                             |        |                             |                             |
| Cash and cash equivalents - Beginning of year             | 8,665,254                   |        | 6,139,543                   | 10,455,911                  |
|                                                      |                             |        |                             |                             |
| Cash and cash equivalents - End of year                   | 7,633,221                   |        | 8,665,254                   | 6,139,543                   |

----