|   | PricewaterhouseCoopersLLP/s.r.l./s.e.n.c.r.l.Chartered AccountantsPlace de la Cité, Tour Cominar2640 Laurier Boulevard, Suite 1700Québec, QuebecCanada G1V 5C2Telephone +1 (418) 522 7001Facsimile +1 (418) 522 5663 |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Auditors' Report**

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

  We have audited the balance sheets of Virginia Mines Inc. (an exploration company) as at February 28,  2007 and 2006 and the statements of earnings, deficit and cash flows for the twelve-month period  ended February 28, 2007, the twelve-month period ended February 28, 2006 and the nine-month period  ended February 28, 2005. 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 in accordance with Canadian generally accepted auditing standards. Those  standards require that we plan and perform an audit to obtain reasonable assurance whether the  financial statements are free of material misstatement. An audit includes examining, on a test basis,  evidence supporting the amounts and disclosures in the financial statements. An audit also includes  assessing the accounting principles used and significant estimates made by management, as well as  evaluating the overall financial statement presentation.

  In our opinion, these financial statements present fairly, in all material respects, the financial position  of the company as at February 28, 2007 and 2006 and the results of its operations and its cash flows for  the twelve-month period ended February 28, 2007, the twelve-month period ended February 28, 2006  and the nine-month period ended February 28, 2005 in accordance with Canadian generally accepted  accounting principles.

Chartered Accountants  Quebec, Quebec, CanadaMay 14, 2007

PricewaterhouseCoopers refers to the Canadian firm of PricewaterhouseCoopers LLP/s.r.l./s.e.n.c.r.l. and the other member firms ofPricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity.

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**Virginia Mines Inc.**  (an exploration company)  Balance Sheets

 (expressed in Canadian dollars)

|                                                                        |                                                                           | **As at February 28,** |
|-----------------------------------------------------------------------------|--------------------------------------------------------------------------------|------------------------|
|                                                                        |                                                                           | **2007**               | **2006** |
|                                                                        |                                                                           | **$**                  | **$** |
|                                                                        |                                                                           |                        |  |
| **Assets**                                                                  |                                                                                |                        |
|                                                                        |                                                                           |                        |  |
| **Current assets**                                                          |                                                                                |                        |
| Cash and cash equivalents                                                   | 6,139,543                                                                      | 10,455,911             |
| Short-term investments (Note 4)                                             | 34,304,806                                                                     | 21,129,909             |
| Amounts receivable (Note 5)                                                 | 9,113,525                                                                      | 8,902,156              |
| Prepaid expenses (Note 6)                                                   | 96,935                                                                         | 85,863                 |
| Current assets of the discontinued operation (Note 3b)                      | -                                                                              | 1,233,825              |
| Future income tax assets (Note 12)                                          | -                                                                              | 5,886,318              |
|                                                                        |                                                                           |                        |  |
|                                                                        |                                                                           | 49,654,809             | 47,693,982 |
|                                                                        |                                                                           |                        |  |
| **Property, plant and equipment**, at cost less accumulated depreciation of |                                                                                |                        |
|                                                                        | $18,695 ($15,283 as at February 28, 2006)                                      | 11,471                 | 11,217 |
|                                                                        |                                                                           |                        |  |
| **Mining properties** (Note 7)                                              | 9,738,536                                                                      | 6,567,312              |
|                                                                        |                                                                                |                        |
| **Intangible asset**, at cost less accumulated amortization of              |                                                                                |                        |
|                                                                        | $4,963 ($4,091 as at February 28, 2006)                                        | 2,035                  | 2,907 |
|                                                                        |                                                                           |                        |  |
| **Deferred charges**(Note 2)                                                | -                                                                              | 341,722                |
|                                                                        |                                                                           |                        |  |
| **Long-term asset of the discontinued operation** (Note 3b)                 | -                                                                              | 11,397,457             |
|                                                                        |                                                                           |                        |  |
|                                                                        |                                                                           | 59,406,851             | 66,014,597 |
|                                                                        |                                                                           |                        |  |
| **Liabilities**                                                             |                                                                                |                        |
|                                                                        |                                                                           |                        |  |
| **Current liabilities**                                                     |                                                                                |                        |
| Accounts payable and accrued liabilities                                    |                                                                                |                        |
|                                                                        | Related companies                                                              | 30,685                 | 94,033 |
|                                                                        | Others                                                                         | 3,191,435              | 430,051 |
| Current liabilities of the discontinued operation (Note 3b)                 | -                                                                              | 4,435,716              |
|                                                                        |                                                                           |                        |  |
|                                                                        |                                                                           | 3,222,120              | 4,959,800 |
|                                                                        |                                                                           |                        |  |
| **Long-term liabilities of the discontinued operation** (Note 3b)           | -                                                                              | 86,318                 |
|                                                                        |                                                                           |                        |  |
|                                                                        |                                                                           | 3,222,120              | 5,046,118 |
|                                                                        |                                                                           |                        |  |
| **Shareholders' Equity**                                                    |                                                                                |                        |
|                                                                        |                                                                           |                        |  |
| **Share Capital**                                                           | 94,447,526                                                                     | 85,471,959             |
| Authorized                                                                  |                                                                                |                        |
|                                                                        | Unlimited number of common shares, voting and participating, whitout par value |                        |  |
| Issued and fully paid                                                       |                                                                                |                        |
|                                                                        | 26,425,698 common shares (24,078,286 as at February 28, 2006)                  |                        |  |
| **Warrants** (Note 8)                                                       | 261,114                                                                        | 446,117                |
| **Stock options** (Note 9a)                                                 | 2,895,074                                                                      | -                      |
| **Unit options** (Note 9b)                                                  | -                                                                              | 101,178                |
| **Contributed surplus** (Note 9a)                                           | 26,028                                                                         | 1,274                  |
| **Deficit**                                                                 | (41,445,011)                                                                   | (25,052,049)           |
|                                                                        |                                                                           |                        |  |
|                                                                        |                                                                           | 56,184,731             | 60,968,479 |
|                                                                        |                                                                           |                        |  |
|                                                                        |                                                                           | 59,406,851             | 66,014,597 |
|                                                                        |                                                                           |                        |  |
|                                                                        |                                                                           |                        |  |
| **Subsequent events** (Note 15)                                             |                                                                                |                        |
|                                                                        |                                                                           |                        |  |
| The accompanying notes are an integral part of these financial statements.  |                                                                                |                        |
|                                                                        |                                                                           |                        |  |
|                                                                        |                                                                                |

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

Page1

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**Virginia Mines Inc.**(an exploration company)Statements of Earnings

(expressed in Canadian dollars)

|                                                                                            | **Periods Ended February 28,** |
|-------------------------------------------------------------------------------------------------|--------------------------------|
|                                                                                            | **2007**                       | **2006** | **2005** |
|                                                                                            | **$**                          | **$** | **$** |
|                                                                                            | (12 months)                    | (12 months) | (9 months) |
|                                                                                            |                                |  |  |
| **Revenues**                                                                                    |                                |  |  |
| Dividends and interest                                                                          | 1,703,103                      | 1,301,133 | 588,163 |
| Fees                                                                                            | 293,869                        | 106,599 | 147,880 |
| Option payments received as financial instruments in excess of cost ofmining property (Note 7d) | 4,338,141                      | - | - |
| Gain on sale of investments                                                                     | 1,009,767                      | 680,021 | 430,589 |
| Gain on sale of mining properties                                                               | 319,198                        | 429,961 | - |
|                                                                                            | 7,664,078                      | 2,517,714 | 1,166,632 |
| **Expenses**                                                                                    |                                |  |  |
| Professional and maintenance fees (Note 9)                                                      | 2,691,814                      | 449,157 | 347,301 |
| Management fees                                                                                 | 182,144                        | 53,812 | 101,536 |
| Rent, office expenses and bonus                                                                 | 1,039,500                      | 658,763 | 390,825 |
| Employee benefits - stock options                                                               | 3,078                          | 975,472 | 6,210 |
| Advertising and exhibitions                                                                     | 93,236                         | 173,626 | 137,365 |
| Travelling                                                                                      | 80,648                         | 107,398 | 64,952 |
| Depreciation of property, plant and equipment                                                   | 3,412                          | 4,470 | 3,268 |
| Amortization of the intangible asset                                                            | 872                            | 1,245 | 1,104 |
| General exploration costs (Note 9)                                                              | 1,319,369                      | 474,205 | 440,498 |
| Grants, credit on duties refundable for loss and refundable tax credit for resources            | (176,870)                      | (126,676) | (149,371) |
| Cost of mining properties abandoned or written off (Note 7)                                     | 1,909,273                      | 1,124,145 | 4,694,495 |
| Writedown of short-term investments                                                             | 298,960                        | - | - |
|                                                                                            | 7,445,436                      | 3,895,617 | 6,038,183 |
| **Earnings (loss) before income taxes and discontinued operation**                              | 218,642                        | (1,377,903) | (4,871,551) |
| **Income taxes** (Note 12)                                                                      | -                              | (5,405,455) | (332,076) |
| **Net earnings (net loss) from continuing operations**                                          | 218,642                        | 4,027,552 | (4,539,475) |
| **Net earnings (net loss) from the discontinued operation**                                     | (637,494)                      | 151,157 | (165,740) |
| **Net earnings (net loss) for the period**                                                      | (418,852)                      | 4,178,709 | (4,705,215) |
| **Basic net earnings (net loss) per share from continuing operations**(Note 13)                 | 0.009                          | 0.177 | (0.243) |
| **Basic net earnings (net loss) per share from the discontinued operation** (Note 13)           | (0.025)                        | 0.007 | (0.009) |
| **Total basic net earnings (net loss) per share**(Note 13)                                      | (0.016)                        | 0.184 | (0.252) |
| **Diluted net earnings (net loss) per share from continuing operations**(Notes 13)              | 0.009                          | 0.171 | (0.243) |
| **Diluted net earnings (net loss) per share from the discontinued operation** (Note 13)         | (0.025)                        | 0.006 | (0.009) |
| **Total diluted net earnings (net loss) per share**                                             | (0.016)                        | 0.177 | (0.252) |

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

Page 2

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| **Virginia Mines Inc.**    (an exploration company)    Statement of Changes in Shareholder's Equity**For the period ended February 28, 2007**                    |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| (expressed in Canadian dollars)                                                                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | Contri-buted surplus |  |  |  |  |
|                                                                                                                                                             |   | Share capital |   |   |   | Warrants (units) |   | Stock options |   | Unit options |   |   | Deficit |   | Total |
|                                                                                                                                                             | common shares | Warrants |
|                                                                                                                                                             |   | Number |   | $ |   | Number |   | $ |   | Number |   | $ |   | Number |   | $ |   | Number |   | $ |   | $ |   | $ |   | $ |
| Balance as at March 1, 2006                                                                                                                                      |   | 48,156,570 |   | 85,471,959 |   | 835,425 |   | 446,117 |   | - |   | - |   | - |   | - |   | 95,730 |   | 101,178 |   | 1,274 |   | (25,052,049) |   | 60,968,479 |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Unit optionse exercised                                                                                                                                          |   | 95,730 |   | 431,468 |   | - |   | - |   | 23,932 |   | 62,203 |   | - |   | - |   | (95,730) |   | (101,178) |   | - |   | - |   | 392,493 |
| Warrants (units) exercised                                                                                                                                       |   | 1,800 |   | 14,398 |   | - |   | - |   | (1,800) |   | (4,678) |   | - |   | - |   | - |   | - |   | - |   | - |   | 9,720 |
| Warrants exercised                                                                                                                                               |   | 1,525 |   | 9,049 |   | (1,525) |   | (814) |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | 8,235 |
| Stock options granted                                                                                                                                            |   | - |   | - |   | - |   | - |   | - |   | - |   | 20,000 |   | 234,000 |   | - |   | - |   | - |   | - |   | 234,000 |
| Stock option exercised                                                                                                                                           |   | 20,000 |   | 239,610 |   | - |   | - |   | - |   | - |   | (20,000) |   | (234,000) |   | - |   | - |   | - |   | - |   | 5,610 |
|                                                                                                                                                             |   | 48,275,625 |   | 86,166,484 |   | 833,900 |   | 445,303 |   | 22,132 |   | 57,525 |   | - |   | - |   | - |   | - |   | 1,274 |   | (25,052,049) |   | 61,618,537 |
| Exchange of each share of Virginia Gold Mines for 0.5 share of the company as part of the plan of arrangement (Note 3)                                           |   | (24,137,812) |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Exchange of each warrant and warrant (unit) of Virginia Gold Mines for 0.5 warrant and warrant (unit) of the company as part of the plan of arrangement (Note 3) |   | - |   | - |   | (416,950) |   | - |   | (11,066) |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Transfer of Eleonore property's net assets and elimination of future income tax assets (Note 3)                                                                  |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (15,974,110) |   | (15,974,110) |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants granted (Note 8)                                                                                                                                        |   | - |   | - |   | 484,162 |   | 261,114 |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | 261,114 |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock options granted (Note 9a)                                                                                                                                  |   | - |   | - |   | - |   | - |   | - |   | - |   | 1,146,000 |   | 3,056,637 |   | - |   | - |   | - |   | - |   | 3,056,637 |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants exercised (Note 8)                                                                                                                                      |   | 414,664 |   | 935,491 |   | (414,664) |   | (442,861) |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | 492,630 |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock options exercised (Note 9a)                                                                                                                                |   | 52,500 |   | 349,277 |   | - |   | - |   | - |   | - |   | (52,500) |   | (143,152) |   | - |   | - |   | - |   | - |   | 206,125 |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants (units) exercised (Note 9c)                                                                                                                             |   | 10,316 |   | 65,879 |   | - |   | - |   | (10,316) |   | (53,624) |   | - |   | - |   | - |   | - |   | - |   | - |   | 12,255 |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants expired (Note 8)                                                                                                                                        |   | - |   | - |   | (2,286) |   | (2,442) |   | - |   | - |   | - |   | - |   | - |   | - |   | 2,442 |   | - |   | - |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Stock options expired (Note 9a)                                                                                                                                  |   | - |   | - |   | - |   | - |   | - |   | - |   | (7,000) |   | (18,411) |   | - |   | - |   | 18,411 |   | - |   | - |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Warrants (units) expired (Note 9c)                                                                                                                               |   | - |   | - |   | - |   | - |   | (750) |   | (3,901) |   | - |   | - |   | - |   | - |   | 3,901 |   | - |   | - |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance of shares for a cash consideration                                                                                                                      |   | 1,210,405 |   | 4,786,279 |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | 4,786,279 |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Acquisition of a mining property                                                                                                                                 |   | 600,000 |   | 2,168,769 |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | 2,168,769 |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Share issue expenses                                                                                                                                             |   | - |   | (24,653) |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (24,653) |
|                                                                                                                                                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net loss for the period                                                                                                                                          |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | - |   | (418,852) |   | (418,852) |
| Balance as at February 28, 2007                                                                                                                                  |   | 26,425,698 |   | 94,447,526 |   | 484,162 |   | 261,114 |   | - |   | - |   | 1,086,500 |   | 2,895,074 |   | - |   | - |   | 26,028 |   | (41,445,011) |   | 56,184,731 |
|                                                                                                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
|                                                                                                                                                                  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
| The accompanying notes are an integral part of these financial statements.                                                                                       |  |  |  |  |  |  |  |  |  |  |  |

Page 3

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| **Virginia Mines Inc.**                      |
|----------------------------------------------|
| (an exploration company)                     |
| Statement of Changes in Shareholders' Equity |
| **For the period ended February 28, 2006**   |

| (expressed in canadian dollars)             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        | Contri-buted surplus |        |          |        |           |
|---------------------------------------------|----------|---------------|--------|-------------|--------|------------------|--------|---------------|--------|--------------|--------|----------|---------|-------------|--------|----------------------|--------|----------|--------|-----------|
|                                             |          | Share capital |        |             |        | Warrants (units) |        | Stock options |        | Unit options |        |          | Deficit |             | Total  |
| common shares                               | Warrants |
|                                             |          |               |   |        |        |                  |   |          |        |              |        |          |         |        |   |                 |        |     |   |      |  |  |  |  |  |  |
|                                             |          | Number        |        | $           |        | Number           |        | $             |        | Number       |        | $        |         | Number      |        | $                    |        | Number   |        | $         |  | $ |  | $ |  | $ |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Balance as at March 1, 2005                 |          | 19,479,539    |        | 56,253,306  |        | 994,011          |        | 554,380       |        | -            |        | -        |         | 1,106,655   |        | 460,466              |        | -        |        | -         |  | 1,274 |  | (29,230,758) |  | 28,038,668 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Warrants granted                            |          | -             |        | -           |        | 501,749          |        | 550,771       |        | -            |        | -        |         | -           |        | -                    |        | -        |        | -         |  | - |  | - |  | 550,771 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Option units granted                        |          | -             |        | -           |        | -                |        | -             |        | -            |        | -        |         | 106,500     |        | 341,068              |        | 117,900  |        | 249,301   |  | - |  | - |  | 590,369 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Warrants (units) granted                    |          | -             |        | -           |        | -                |        | -             |        | 17,509       |        | 91,024   |         | -           |        | -                    |        | -        |        | -         |  | - |  | - |  | 91,024 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Warrants exercised                          |          | 1,078,048     |        | 5,648,018   |        | (1,078,048)      |        | (659,034)     |        | -            |        | -        |         | -           |        | -                    |        | -        |        | -         |  | - |  | - |  | 4,988,984 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Stock options exercised                     |          | 1,213,155     |        | 4,519,684   |        | -                |        | -             |        | -            |        | -        |         | (1,213,155) |        | (801,534)            |        | -        |        | -         |  | - |  | - |  | 3,718,150 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Unit options exercised                      |          | 70,035        |        | 631,386     |        | -                |        | -             |        | -            |        | -        |         | -           |        | -                    |        | (70,035) |        | (148,123) |  | - |  | - |  | 483,263 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Warrants (units) exercised                  |          | 17,509        |        | 280,117     |        | -                |        | -             |        | (17,509)     |        | (91,024) |         | -           |        | -                    |        | -        |        | -         |  | - |  | - |  | 189,093 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Issuance of shares for a cash consideration |          | 2,140,000     |        | 18,826,110  |        | -                |        | -             |        | -            |        | -        |         | -           |        | -                    |        | -        |        | -         |  | - |  | - |  | 18,826,110 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Acquisition of a mining property            |          | 80,000        |        | 1,040,000   |        | -                |        | -             |        | -            |        | -        |         | -           |        | -                    |        | -        |        | -         |  | - |  | - |  | 1,040,000 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Share issue expenses                        |          | -             |        | (1,726,662) |        | -                |        | -             |        | -            |        | -        |         | -           |        | -                    |        | -        |        | -         |  | - |  | - |  | (1,726,662) |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Net earnings for the period                 |          | -             |   | -           |   | -                |   | -             |   | -            |   | -        |    | -           |   | -                    |   | -        |   | -         |   | - |   | 4,178,709 |   | 4,178,709 |
|                                             |          |               |        |             |        |                  |        |               |        |              |        |          |         |             |        |                      |        |          |        |           |  |  |  |  |  |  |
| Balance as at February 28, 2006             |          | 24,078,286    |        | 85,471,959  |        | 417,712          |        | 446,117       |        | -            |        | -        |         | -           |        | -                    |        | 47,865   |        | 101,178   |  | 1,274 |   | (25,052,049) |   | 60,968,479 |

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

Page 4

----

| **Virginia Mines Inc.**    (an exploration company)    Statement of Changes in Shareholders' Equity**For the period ended February 28, 2005** |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |
|-----------------------------------------------------------------------------------------------------------------------------------------------|----------|---------------|--------|------------|--------|------------------|--------|---------------|--------|--------------|--------|--------|---------|-----------|
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |
|                                                                                                                                          |     |          |   |       |   |             |   |          |   |         |   |   |    |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| (expressed in Canadian dollars)                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  | Conti-buted surplus |  |  |  |  |
|                                                                                                                                               |          | Share capital |        |            |        | Warrants (units) |        | Stock options |        | Unit options |        |        | Deficit |           | Total |
| common shares                                                                                                                                 | Warrants |
|                                                                                                                                               |          |               |   |       |        |                  |   |          |        |              |        |        |         |      |   |   |  |   |   |   |  |  |  |  |  |  |
|                                                                                                                                               |          | Number        |        | $          |        | Number           |        | $             |        | Number       |        | $      |         | Number    |  | $ |  | Number |  | $ |  | $ |  | $ |  | $ |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance as at June 1, 2004                                                                                                                    |          | 18,319,457    |        | 52,159,266 |        | 1,599,033        |        | 883,255       |        | -            |        | -      |         | 1,374,971 |  | 214,439 |  | - |  | - |  | - |  | (24,525,543) |  | 28,731,417 |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Warrants granted                                                                                                                              |          | -             |        | -          |        | 12,000           |        | 12,984        |        | -            |        | -      |         | -         |  | - |  | - |  | - |  | - |  | - |  | 12,984 |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Stock options granted                                                                                                                         |          | -             |        | -          |        | -                |        | -             |        | -            |        | -      |         | 152,000   |  | 312,494 |  | - |  | - |  | - |  | - |  | 312,494 |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Warrants exercised                                                                                                                            |          | 540,099       |        | 2,344,655  |        | (540,099)        |        | (341,859)     |        | -            |        | -      |         | -         |  | - |  | - |  | - |  | - |  | - |  | 2,002,796 |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Stock options exercised                                                                                                                       |          | 419,816       |        | 692,764    |        | -                |        | -             |        | -            |        | -      |         | (419,816) |  | (65,193) |  | - |  | - |  | - |  | - |  | 627,571 |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Unit options exercised                                                                                                                        |          | -             |        | -          |        | -                |        | -             |        | -            |        | -      |         | -         |  | - |  | - |  | - |  | - |  | - |  | - |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Warrants expired                                                                                                                              |          | -             |        | -          |        | (76,923)         |        | -             |        | -            |        | -      |         | -         |  | - |  | - |  | - |  | - |  | - |  | - |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Stock options cancelled                                                                                                                       |          | -             |        | -          |        | -                |        | -             |        | -            |        | -      |         | (500)     |  | (1,274) |  | - |  | - |  | 1,274 |  | - |  | - |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Issuance of shares for a cash consideration                                                                                                   |          | 200,167       |        | 1,501,249  |        | -                |        | -             |        | -            |        | -      |         | -         |  | - |  | - |  | - |  | - |  | - |  | 1,501,249 |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Share issue expenses                                                                                                                          |          | -             |        | (444,628)  |        | -                |        | -             |        | -            |        | -      |         | -         |  | - |  | - |  | - |  | - |  | - |  | (444,628) |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Net loss for the period                                                                                                                       |          | -             |   | -          |   | -                |   | -             |   | -            |   | -      |    | -         |   | - |   | - |   | - |   | - |   | (4,705,215) |   | (4,705,215) |
|                                                                                                                                               |          |               |        |            |        |                  |        |               |        |              |        |        |         |           |  |  |  |  |  |  |  |  |  |  |  |  |
| Balance as at February 28, 2005                                                                                                               |          | 19,479,539    |   | 56,253,306 |   | 994,011          |   | 554,380       |   | -            |   | -      |    | 1,106,655 |   | 460,466 |   | - |   | - |   | 1,274 |   | (29,230,758) |   | 28,038,668 |

he accompanying notes are an integral part of these financial statements. 

Page 5

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| **Virginia Mines Inc.**                                                            |                                                                                   |                           |         |
|------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------|--------------------------------|--------------|
| (an exploration company)                                                           |                                                                                   |                           |         |
| Statements of Cash Flows                                                           |                                                                                   |                           |         |
|                                                                               |                                                                                   |                           |         |   |
| (expressed in Canadian dollars)                                                    |                                                                                   |                           |         |
|                                                                               |                                                                                   | **Periods Ended February 28,** |
|                                                                               |                                                                                   | **2007**                       | **2006**     | **2005** |
|                                                                               |                                                                                   | **$**                          | **$**        | **$** |
|                                                                               |                                                                                   | (12 months)                    | (12 months)  | (9 months) |
| **Cash flows from operating activities from continuing operations**                |                                                                                   |                           |         |
| Net earnings (net loss) from continuing operations for the period                  | 218,642                                                                                | 4,027,552                      | (4,539,475)  |
| Items not affecting cash and cash equivalents                                      |                                                                                        |                                |              |
|                                                                               | Cost of mining properties abandoned or written off                                     | 1,909,273                      | 1,124,145    | 4,694,495 |
|                                                                               | Depreciation and loss on sale of property, plant and equipment                         | 4,284                          | 6,198        | 4,372 |
|                                                                               | Stock-based compensation costs                                                         | 3,290,637                      | 341,068      | 312,494 |
|                                                                               | Writedown of short-term investments                                                    | 298,960                        | -            | - |
|                                                                               | Option payments received as financial instruments in excess of cost of mining property | (4,338,141)                    | -            | - |
|                                                                               | Gain on sale of investments                                                            | (1,009,767)                    | (680,021)    | (430,589) |
|                                                                               | Gain on sale of mining properties                                                      | (319,198)                      | (429,961)    | - |
|                                                                               | Future income taxes                                                                    | -                              | (5,405,455)  | (332,076) |
|                                                                               |                                                                                   | 54,690                         | (1,016,474)  | (290,779) |
|                                                                               |                                                                                        |                                |              |
| Net change in non-cash working capital items (Note 10a)                            | 3,092,476                                                                              | 252,991                        | (834,148)    |
|                                                                               | 3,147,166                                                                              | (763,483)                      | (1,124,927)  |
| **Cash flows from operating activities from the discontinued operation**(Note 3e)  | (1,802,127)                                                                            | (581,859)                      | (165,740)    |
|                                                                               |                                                                                   | 1,345,039                      | (1,345,342)  | (1,290,667) |
| **Cash flows from financing activities from continuing operations**                |                                                                                        |                                |              |
| Issuance of share capital and warrants                                             | 6,174,461                                                                              | 28,821,013                     | 4,476,676    |
| Share issue expenses                                                               | (24,653)                                                                               | (1,300,019)                    | (444,628)    |
|                                                                               |                                                                                   | 6,149,808                      | 27,520,994   | 4,032,048 |
| **Cash flows from financing activities from the discontinued operation** (Note 3e) | -                                                                                      | 3,000,000                      | -            |
|                                                                               |                                                                                   | 6,149,808                      | 30,520,994   | 4,032,048 |
| **Cash flows from investing activities from**                                      |                                                                                        |                                |              |
|                                                                               | **continuing operations**                                                              |                                |              |  |
| Change in short-term investments                                                   | (7,801,315)                                                                            | (11,805,485)                   | 4,855,844    |
| Change in deposit on exploration costs                                             | -                                                                                      | 49,430                         | 100,570      |
| Change in long-term investments                                                    | -                                                                                      | -                              | 34,973       |
| Acquisition of mining properties                                                   | (4,291,531)                                                                            | (5,866,656)                    | (2,614,739)  |
| Change in credit on duties refundable for loss and refundable tax credit           |                                                                                        |                                |              |
|                                                                               | related to exploration costs applied against mining properties                         | 652,485                        | -            | - |
| Grants cashed                                                                      | -                                                                                      | -                              | 40,000       |
| Acquisition of property, plant and equipment                                       | (3,666)                                                                                | -                              | (8,062)      |
| Proceeds from disposal of mining properties                                        | 15,000                                                                                 | 1,300                          | -            |
| Option payments received                                                           | 90,001                                                                                 | -                              | -            |
| Change in deferred charges                                                         | -                                                                                      | (341,722)                      | -            |
|                                                                               | Acquisition of an intangible asset                                                     | -                              | -            | (700) |
|                                                                               |                                                                                   | (11,339,026)                   | (17,963,133) | 2,407,886 |
| **Cash flows from investing activities from the**                                  |                                                                                        |                                |              |
|                                                                               | **discontinued operation** (Note 3e)                                                   | (472,189)                      | (8,074,910)  | (2,459,869) |
|                                                                               |                                                                                   |                                |              |  |
| **Change in cash and cash equivalents**                                            | (4,316,368)                                                                            | 3,137,609                      | 2,689,398    |
| **Cash and cash equivalent-Beginning of period**                                   | 10,455,911                                                                             | 7,318,302                      | 4,628,904    |
| **Cash and cash equivalents- End of period**                                       | 6,139,543                                                                              | 10,455,911                     | 7,318,302    |

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

Page 6

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**Virginia Mines Inc.**

(expressed in Canadian dollars)

> 
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.

> 
**Basis of presentation**    These financial statements have been prepared in accordance with Canadian generally accepted accounting principles. These principles conform, in all material respects, with United States generally accepted accounting principles, except as described in note 16. 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 generally accepted accounting principles 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 carrying amount of mining properties, the credit on duties refundable for loss, the refundable tax credit for resources and certain accrued liabilities. Actual results could differ from those estimates.  

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

Exploration funds consist of cash, term deposits and short-term investments and represent the unexpended proceeds of financings under the terms of which the company must spend the amounts on the exploration of mining properties.
**Short-term investments**  Short-term investments are valued at the lower of cost and market value.
Page 7

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

> 
**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.

**Intangible asset**

The intangible asset, which consists of Web site development expenses, is recorded at cost less accumulated amortization, and is amortized using the declining balance method at a rate of 30%.

**Deferred charges**

Deferred charges consist of expenses incurred with respect to the arrangement entered into on March 31, 2006 between the company, Goldcorp Inc. and Virginia Gold Mines Inc.

**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.

Page 8

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005 

(expressed in Canadian dollars) 

> 
**Share capital**

Shares issued for non-monetary consideration are generally recorded at the quoted market price of the shares over a reasonable period of time before and after the agreement to issue the shares was announced.

Shares issued pursuant to flow-through financing agreements are recorded at their fair 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.

**Government grants**

Government grants are recorded as revenue when the company has reasonable assurance that it has complied and will continue to comply with all the conditions related to the grant. Grants related to working capital are included in earnings when the related expenses are incurred. Grants related to exploration costs are deducted from the related mining properties.

**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.

**Basic and diluted earnings per share**

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

Diluted earnings per share are calculated using the weighted average number of participating shares outstanding during the period, plus the effects of dilutive potential participating shares outstanding during the period. 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 period.

Page 9

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005 

(expressed in Canadian dollars) 

> 
**Stock-based compensation plan**

The company has established a stock-based compensation plan, which is described in Note 9. 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**

In January 2005, the CICA issued four new accounting standards relating to financial instruments: Section 3855, “Financial Instruments — Recognition and measurement”, Section 3865, “Hedges”, Section 1530, “Comprehensive Income”, and Section 3251, “Equity”.

Section 3855 expands on Section 3860, “Financial Instruments — Disclosure and Presentation”, by prescribing when a financial instrument is to be recognized on the balance sheet and at what amount. It also specifies how financial instrument gains and losses are to be presented.

Section 3865 provides alternative treatments to Section 3855 for entities that choose to designate qualifying transactions as hedges for accounting purposes. It replaces and expands on Accounting Guideline 13, “Hedging Relationships”, and the hedging guidance in Section 1650, “Foreign Currency Translation”, by specifying how hedge accounting is applied and what disclosures are necessary when it is applied.

Section 1530, “Comprehensive Income”, introduces a new requirement to temporarily present certain gains and losses outside net income.

Accordingly, Section 3250, “Surplus” has been revised as Section 3251, “Equity”.

**Recognition of financial assets and liabilities**

**Short-term investments**

The short-term investments will be classified as available-for-sale investments. The company will continue to    recognize transactions on the settlement date.

These investments will be recognized at fair value. Unrealized gains and losses will be recognized, net of    income taxes, if any, in "Accumulated other comprehensive income". Upon the disposal or impairment of these    investments, these gains or losses will be reclassified in earnings.

**Transition**

The recognition, derecognition and measurement methods used as well as the hedge accounting policies used to    prepare the financial statements of periods prior to the effective date of the new standards were    unchanged and, therefore those financial statements will not be restated.

Sections 1530, 3251, 3855 and 3865 will be adopted by the Company on March 1, 2007. As of that date, the    company will recognize all of its financial assets and liabilities in the balance sheet according to their classification. Any adjustment made to a previous carrying amount will be recognized as an adjustment to the balance of deficit at that date or as the opening balance of a separate item in "Accumulated other comprehensive income", net of income taxes, if any.

Page 10

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005 

(expressed in Canadian dollars) 

> 
The difference between the carrying amount and the fair value of investments classified as available for sale will be recognized as an adjustment to the opening balance of "Accumulated other comprehensive income", net of income taxes.

**Effective interest rate method**

The impact of the use of the effective interest rate method will be recognized as an adjustment to the opening    balance of deficit, net of income taxes, if any. 

Page 11

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005 

(expressed in Canadian dollars) 

| **3** | **Discontinued operation** |   |
|-------|----------------------------|--------|

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

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

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 null, 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.

Comparative figures are derived from the financial statements of Virginia Gold Mines.

Page 12

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005 

(expressed in Canadian dollars) 

a)Presented below is a simplified corporate structure of Virginia Mines Inc. before and after the completion of the plan of arrangement with Goldcorp

**Structure before the plan of arrangement**

| **Virginia Gold Mines        Shareholders**

100%                                                                                                 |
|---------------------------------------------------------------------------------------------------------------------------------------------------|
| **Virginia Gold Mines**
- Listed company
- Non-Eleonore Assets and Liabilities
- Eleonore Assets and Liabilities (discontinued operations) 

100% |
| **Virginia Mines Inc.**                                                                                                                           |

**Structure after the plan of arrangement**

| **Goldcorp        Shareholders**                                                                                                         | **Virginia Mines Inc. Shareholders**

 (0.4 of a Goldcorp Share in exchange for one Virginia Gold Mines Share) | **Virginia Mines Inc. Shareholders**

 (0.5 of Virginia Mines Share in exchange for one Virginia Gold Mines Share) 

100% |
|------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------|
| **Goldcorp Inc.**

100%                                                                                                                  |                                                                                                           |
| **Virginia Gold Mines****Inc. **
-  De-listed from TSX 
-  Eleonore Assets and Liabilities 
-  Became Les Mines Opinaca Ltée | **Virginia Mines****Inc. **
-  Listed company 
-  Non-Eleonore Assets and Liabilities                     |

Page 13

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005 

(expressed in Canadian dollars) 

| b)                    | The assets and liabilities of the discontinued operation shown on the balance sheets are as follows: |
|-----------------------|------------------------------------------------------------------------------------------------------|
|                  |                                                                                                 |   |   |   |
|                  |                                                                                                 |   | **As at February 28,** |
|                  |                                                                                                 |   | **2007** | **2006** |
|                  |                                                                                                 |   | **$** | **$** |
|                  |                                                                                                 |   |   |   |
|                  | **Assets**                                                                                           |   |   |   |
|                  | Current assets                                                                                       |   |   |   |
|                  | Refundable tax credit for resources                                                                  |   | - | 879,493 |
|                  | Credit on duties refundable for loss                                                                 |   | - | 166,820 |
|                  | Other accounts receivable                                                                            |   | - | 187,512 |
|                  |                                                                                                 |   |  |  |
|                  | Current assets of the discontinued operation                                                         |   | - | 1,233,825 |
|                  |                                                                                                 |   |  |  |
|                  | Long-term assets of the discontinued operation                                                       |   |  |  |
|                  | Mining property abandoned                                                                            |   | - | 11,397,457 |
|                  |                                                                                                 |   |  |  |
|                  | **Total assets of the discontinued operation**                                                       |   | - | 12,631,282 |
|                  |                                                                                                 |   |  |  |
|                  | **Liabilities**                                                                                      |   |  |  |
|                  | Current liabilities                                                                                  |   |  |  |
|                  | Advances from Goldcorp Inc., non interest-bearing,                                                   |   |  |  |
|                  | and with no terms of repayment                                                                       |   | - | 3,000,000 |
|                  | Other accounts payable and accrued liabilities                                                       |   | - | 1,435,716 |
|                  |                                                                                                 |   |  |  |
|                  |                                                                                                 |   | - | 4,435,716 |
| Long-term liabilities |                                                                                                 |  |  |
| Future income taxes   |                                                                                                 | - | 86,318 |
|                  |                                                                                                 |   |  |  |
|                  | **Total liabilities of the discontinued operation**                                                  |   | - | 4,522,034 |
|                  |                                                                                                 |   |   |   |
|                  |                                                                                                 |   |   |   |
|                  |                                                                                                 |   |   |   |
| c)                    | Earnings of the discontinued operation                                                               |   |   |   |
|                  |                                                                                                 |   |   |   |
|                  |                                                                                                 | **Periods Ended February 28,** |
|                  |                                                                                                 | **2007** | **2006** | **2005** |
|                  |                                                                                                 | **$** | **$** | **$** |
|                  |                                                                                                 | (12 months) | (12 months) | (9 months) |
|                  |                                                                                                 |   |   |   |
|                  |                                                                                                 |   |   |   |
|                  | Loss before income taxes                                                                             | (637,494) | (394,348) | (165,740) |
|                  |                                                                                                 |  |  |  |
|                  | Income taxes recovery                                                                                | - | 545,505 | - |
|                  |                                                                                                 |  |  |  |
|                  | Net earnings (net loss) from the discontinued operation                                              | (637,494) | 151,157 | (165,740) |

Page 14

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005 

(expressed in Canadian dollars) 

| d)     | The mining property discontinued has changed as follows during the reporting periods: |
|--------|---------------------------------------------------------------------------------------|
|   |                                                                                       |   |
|   |                                                                                  | **Periods Ended February 28,** |
|   |                                                                                  | **2007** | **2006** | **2005** |
|   |                                                                                  | **$** | **$** | **$** |
|   |                                                                                  | (12 months) | (12 months) | (9 months) |
|   |                                                                                  |   |   |   |
|   | Mining property -Beginning of period                                                  | 192,124 | 160,994 | 45,800 |
|   |                                                                                  |   |   |   |
|   | Costs incurred (claims and permits)                                                   | - | 31,130 | 115,194 |
|   |                                                                                  |   |   |   |
|   | Mining property discontinued                                                          | (192,124) | - | - |
|   |                                                                                  |  |  |  |
|   | Mining property- End of period                                                        | - | 192,124 | 160,994 |
|   |                                                                                  |   |   |   |
|   | Exploration costs- Beginning of period                                                | 11,205,333 | 2,772,151 | 427,476 |
|   |                                                                                  |   |   |   |
|   | Cost incurred during the period                                                       |   |   |   |
|   |                                                                                  |   |   |   |
|   | Analyses                                                                              | 4,536 | 795,975 | 246,494 |
|   | Drilling                                                                              | 303,403 | 7,059,936 | 1,935,325 |
|   | Geophysics                                                                            | - | 248,629 | 53,304 |
|   | Geology                                                                               | 107,799 | 2,003,366 | 777,781 |
|   | Stripping                                                                             | - | 206,531 | 130,877 |
|   | Transport                                                                             | 169,304 | 2,380,411 | 753,913 |
|   | Blasting                                                                              | - | - | 1,500 |
|   | Professional fees                                                                     | 276,770 | 2,192,219 | 739,050 |
|   | Accomodation                                                                          | 14,234 | 301,275 | 122,518 |
|   |                                                                                  | 12,081,379 | 17,960,493 | 5,188,238 |
|   |                                                                                  |   |   |   |
|   |                                                                                  |   |   |   |
|   | Credit on duties refundable for loss and refundable tax credit                        |   |   |   |
|   | for resources                                                                         | (249,673) | (6,755,160) | (2,416,087) |
|   |                                                                                  |   |   |   |
|   | Exploration costs discontinued                                                        | (11,831,706) | - | - |
|   |                                                                                  |  |  |  |
|   | Exploration costs- End of period                                                      | - | 11,205,333 | 2,772,151 |
|   |                                                                                  |   |   |   |
|   | **Total mining property disposed**                                                    | - | 11,397,457 | 2,933,145 |

Page 15

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005 

(expressed in Canadian dollars) 

| e)     | Cash used by the discontinued operation are as follows:  |                           |        |        |
|--------|----------------------------------------------------------|--------------------------------|-------------|-------------|
|   |                                                     |                           |        |        |
|   |                                                     |                           |        |        |
|   |                                                     |                           |        |        |
|   |                                                     | **Periods Ended February 28,** |
|   |                                                     | **2007**                       | **2006**    | **2005**    |
|   |                                                     | **$**                          | **$**       | **$**       |
|   |                                                     | (12 months)                    | (12 months) | (9 months)  |
|   |                                                     |                           |        |        |
|   | **Cash flows from operating activities**                 |                           |        |        |
|   | Net earnings (net loss) from the discontinued operation  | (637,494)                      | 151,157     | (165,740)   |
|   | Items not affecting cash and cash equivalents            |                           |        |        |
|   | Future income taxes                                      | -                              | (545,505)   | -           |
|   | Defered charges expensed for the period                  | 341,722                        | -           | -           |
|   |                                                     | (295,772)                      | (394,348)   | (165,740)   |
|   | Change in non-cash working capital items                 |                           |        |        |
|   | Amounts receivable                                       | (688,989)                      | (187,511)   | -           |
|   | Other accounts payable and accrued liabilities           | (817,366)                      | -           | -           |
|   |                                                     | (1,802,127)                    | (581,859)   | (165,740)   |
|   | **Cash flows from financing activities**                 |                                |             |             |
|   | Advances from Goldcorp Inc.                              | -                              | 3,000,000   | -           |
|   |                                                     |                                |             |             |
|   | **Cash flows from investing activities**                 |                                |             |             |
|   | Acquisition of a mining property                         | (472,189)                      | (8,074,910) | (2,459,869) |
|   |                                                     |                                |             |             |
|   | **Cash used by the discontinued operation**              | (2,274,316)                    | (5,656,769) | (2,625,609) |
|   |                                                     |                           |        |        |
|   |                                                     |                           |        |        |
| f)     | Items not affecting cash related to investing activities |                           |        |        |
|   |                                                     |                           |        |        |
|   |                                                     | **Periods Ended February 28,** |
|   |                                                     | **2007**                       | **2006**    | **2005**    |
|   |                                                     | **$**                          | **$**       | **$**       |
|   |                                                     | (12 months)                    | (12 months) | (9 months)  |
|   |                                                     |                           |        |        |
|   | Credit on duties refundable for loss and                 |                           |        |        |
|   | refundable tax credit related to exploration costs       |                           |        |        |
|   | applied against the mining property disposed             | -                              | (1,046,314) | -           |
|   | Acquisition of a mining property included in             |                           |        |        |
|   | accounts payable and accrued liabilities                 | -                              | 1,435,716   | -           |

Page 16

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **4**  | **Short-term investments**                                                       |                   |       |
|--------|----------------------------------------------------------------------------------|------------------------|------------|
|   |                                                                             |                   |       |
|   |                                                                             | **As at February 28,** |
|   |                                                                             | **2007**               | **2006**   |
|   |                                                                             | **$**                  | **$**      |
|   |                                                                             |                   |       |
|   | Investments in public companies (Quoted market value: $15,282,359;               |                   |       |
|   | $6,387,600 as at February 28, 2006)                                              | 10,490,837             | 4,883,109  |
|   | Bonds and other securities, bearing interest at annual rates ranging from 3.00 % |                   |       |
|   | to 8.25 % (from 3,41 % to 12,75 % as at February 28, 2006), maturing between     |                   |       |
|   | April 2007 and May 2016 (quoted market value: $24,020,830;                       |                   |       |
|   | $16,324,229 as at February 28, 2006)                                             | 23,813,969             | 16,246,800 |
|   |                                                                             | 34,304,806             | 21,129,909 |
|   |                                                                             |                        |            |
| **5**  | **Amounts receivable**                                                           |                   |       |
|   |                                                                             | **As at February 28,** |
|   |                                                                             | **2007**               | **2006**   |
|   |                                                                             | **$**                  | **$**      |
|   |                                                                             |                   |       |
|   | Refundable tax credit for resources                                              | 7,166,994              | 5,698,499  |
|   | Credit on duties refundable for loss                                             | 1,370,068              | 1,914,727  |
|   | Interest receivable                                                              | 191,206                | 229,593    |
|   | Amounts receivable under agreements with mining exploration companies            | 71,898                 | 54,353     |
|   | Commodity taxes receivable                                                       | 197,284                | 324,262    |
|   | Loans to service providers related to the exercise of stock options,             |                   |       |
|   | non-interest-bearing, cashed on April 25, 2006                                   | -                      | 664,291    |
|   | Others                                                                           | 116,075                | 16,431     |
|   |                                                                             | 9,113,525              | 8,902,156  |
|   |                                                                             |                   |       |
| **6**  | **Prepaid expenses**                                                             |                   |       |
|   |                                                                             |                   |       |
|   |                                                                             | **As at February 28,** |
|   |                                                                             | **2007**               | **2006**   |
|   |                                                                             | **$**                  | **$**      |
|   |                                                                             |                   |       |
|   | Investor relations                                                               | 31,562                 | 11,360     |
|   | Others                                                                           | 65,373                 | 74,503     |
|   |                                                                             | 96,935                 | 85,863     |

Page 17

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(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, 2006** | **Costs incurred**                                                                                                                            | **Balance as at February 28, 2007** |
|   |                  | **%**                         | **$**                  | **$**                           | **$**                                                                                                                                         |                                     |
|   |                  |                          |                   |                            |                                                                                                                                          |                                |
|   | Corvet Est            | 723                           |                        |                            |                                                                                                                                          |                                |   |
|   | Mining property       |                          | 100                    | 30,401                          | -                                                                                                                                             | -                                   | 30,401 |
|   | Exploration costs     |                          |                        | 1,037,729                       | (474)                                                                                                                                         | (29,781)                            | 1,007,474 |
|   |                  |                          |                        | 1,068,130                       | (474)                                                                                                                                         | (29,781)                            | 1,037,875 |
|   |                  |                          |                        |                                 |                                                                                                                                               |                                     |  |
|   | Coulon Pitaval        | 368                           |                        |                                 |                                                                                                                                               |                                     |  |
|   | Mining property       |                          | 100                    | 62,132                          | 10,264                                                                                                                                        | -                                   | 72,396 |
|   | Exploration costs     |                          |                        | 231,800                         | 97,686                                                                                                                                        | (44,695)                            | 284,791 |
|   |                  |                          |                        | 293,932                         | 107,950                                                                                                                                       | (44,695)                            | 357,187 |
|   |                  |                          |                        |                                 |                                                                                                                                               |                                     |  |
|   | Coulon J/V            | 598                           |                        |                                 |                                                                                                                                               |                                     |  |
|   | Mining property       |                          | 100                    | 100,940                         | (15)                                                                                                                                          | -                                   | 100,925 |
|   | Exploration costs     |                          |                        | 376,439                         | 9,599                                                                                                                                         | (28,876)                            | 357,162 |
|   |                  |                          |                        | 477,379                         | 9,584                                                                                                                                         | (28,876)                            | 458,087 |
|   |                  |                               |                        |                                 |                                                                                                                                               |                                     |
|   | Eleonore Regional     | 613                           |                        |                                 |                                                                                                                                               |                                     |  |
|   | Mining property       |                          | 100                    | 770                             | 55,131                                                                                                                                        | -                                   | 55,901 |
|   | Exploration costs     |                               | 45,469                 | 247,160                         | (124,486)                                                                                                                                     | 168,143                             |
|   |                  |                               | 46,239                 | 302,291                         | (124,486)                                                                                                                                     | 224,044                             |
|   |                  |                          |                        |                                 |                                                                                                                                               |                                     |  |
|   | FCI                   | 121                           |                        |                                 |                                                                                                                                               |                                     |  |
|   | Mining property       | 2                             | 100                    | 12,820                          | 19,871                                                                                                                                        | -                                   | 32,691 |
|   | Exploration costs     |                               | 39,649                 | 338,855                         | (155,942)                                                                                                                                     | 222,562                             |
|   |                  |                               | 52,469                 | 358,726                         | (155,942)                                                                                                                                     | 255,253                             |
|   |                  |                          |                        |                                 |                                                                                                                                               |                                     |  |
|   | Gipouloux             | 1,613                         |                        |                                 |                                                                                                                                               |                                     |  |
|   | Mining property       |                          | 100                    | -                               | 206,432                                                                                                                                       | -                                   | 206,432 |
|   | Exploration costs     |                               | -                      | 115,328                         | (53,166)                                                                                                                                      | 62,162                              |
|   |                  |                          | -                      | 321,760                         | (53,166)                                                                                                                                      | 268,594                             |
|   |                  |                          |                   |                                 |                                                                                                                                               |                                     |  |
|   |                  | (forward)                     |                   | 1,938,149                       | 1,099,837                                                                                                                                     | (436,946)                           | 2,601,040 |

Page 18

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

|   |               |                    |                   |                                 |                    | **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, 2006** | **Costs incurred** | **Balance as at Febuary 28, 2007**                                                                                                            |
|   |               | **%**                   | **$**                  | **$**                           | **$**              | **$**                                                                                                                                         |
|   |               |                    |                   |                            |               |                                                                                                                                          |      |
|   |               | (brought forward)       |                   | 1,938,149                       | 1,099,837          | (436,946)                                                                                                                                     | 2,601,040 |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Laguiche           | 2,213                   |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    |                    | 100                    | 58,520                          | 188,630            | -                                                                                                                                             | 247,150   |
|   | Exploration costs  |                    |                   | 270                             | 76,123             | (35,093)                                                                                                                                      | 41,300    |
|   |               |                    |                   | 58,790                          | 264,753            | (35,093)                                                                                                                                      | 288,450   |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Lac Gayot          | 116                     |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    | 3                       | 100                    | 47,660                          | 2,197,769          | -                                                                                                                                             | 2,245,429 |
|   | Exploration costs  |                    |                   | 701,067                         | 91,687             | (42,062)                                                                                                                                      | 750,692   |
|   |               |                    |                   | 748,727                         | 2,289,456          | (42,062)                                                                                                                                      | 2,996,121 |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Saganash           | 458                     |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    | 100                     | 31,537                 | 51,258                          | -                  | 82,795                                                                                                                                        |
|   | Exploration costs  |                    | 35,846                 | 211,961                         | (97,670)           | 150,137                                                                                                                                       |
|   |               |                    |                   | 67,383                          | 263,219            | (97,670)                                                                                                                                      | 232,932   |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Poste Lemoyne Ext. | 211                     |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    | 100                     | 1,074,205              | 5,194                           | -                  | 1,079,399                                                                                                                                     |
|   | Exploration costs  |                    | 429,686                | 641,905                         | (295,909)          | 775,682                                                                                                                                       |
|   |               |                    |                   | 1,503,891                       | 647,099            | (295,909)                                                                                                                                     | 1,855,081 |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Wabamisk           | 734                     |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    | 100                     | 48,124                 | 93,557                          | -                  | 141,681                                                                                                                                       |
|   | Exploration costs  |                    | 43,820                 | 342,417                         | (157,802)          | 228,435                                                                                                                                       |
|   |               |                    |                   | 91,944                          | 435,974            | (157,802)                                                                                                                                     | 370,116   |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Others             |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining properties  |                    | 568,629                | 492,014                         | (412,071)          | 648,572                                                                                                                                       |
|   | Exploration costs  |                    | 1,589,799              | 1,274,903                       | (2,118,478)        | 746,224                                                                                                                                       |
|   |               |                    | 2,158,428              | 1,766,917                       | (2,530,549)        | 1,394,796                                                                                                                                     |
|   |               |                    |                   | 6,567,312                       | 6,767,255          | (3,596,031)                                                                                                                                   | 9,738,536 |

Page 19

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

|   |              |                         |                        |                                 |                    | **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, 2005** | **Costs incurred** | **Balance as at February 28, 2006**                                                                                                           |
|   |              | **%**                   | **$**                  | **$**                           | **$**              | **$**                                                                                                                                         |
|   | Auclair           | 240                     |                   |                            |               |                                                                                                                                          |      |
|   | Mining property   | 100                     | 239,138                | 12,268                          | -                  | 251,406                                                                                                                                       |
|   | Exploration costs |                         | 146,567                | 2,921                           | (1,344)            | 148,144                                                                                                                                       |
|   |              |                         | 385,705                | 15,189                          | (1,344)            | 399,550                                                                                                                                       |
|   |              |                         |                        |                                 |                    |                                                                                                                                               |
|   | Corvet Est        | 723                     |                        |                                 |                    |                                                                                                                                               |           |
|   | Mining property   | 100                     | 55,401                 | -                               | (25,000)           | 30,401                                                                                                                                        |
|   | Exploration costs |                         | 950,271                | 751                             | 86,707             | 1,037,729                                                                                                                                     |
|   |              |                         | 1,005,672              | 751                             | 61,707             | 1,068,130                                                                                                                                     |
|   |              |                         |                        |                                 |                    |                                                                                                                                               |
|   | Coulon Pitaval    | 368                     |                        |                                 |                    |                                                                                                                                               |           |
|   | Mining property   | 100                     | 41,701                 | 30,312                          | (9,881)            | 62,132                                                                                                                                        |
|   | Exploration costs |                         | 262,366                | 13,679                          | (44,245)           | 231,800                                                                                                                                       |
|   |              |                         | 304,067                | 43,991                          | (54,126)           | 293,932                                                                                                                                       |
|   |              |                         |                        |                                 |                    |                                                                                                                                               |
|   | Coulon J/V        | 598                     |                        |                                 |                    |                                                                                                                                               |           |
|   | Mining property   | 100                     | 67,728                 | 49,261                          | (16,049)           | 100,940                                                                                                                                       |
|   | Exploration costs |                         | 426,111                | 22,186                          | (71,858)           | 376,439                                                                                                                                       |
|   |              |                         | 493,839                | 71,447                          | (87,907)           | 477,379                                                                                                                                       |
|   |              |                         |                        |                                 |                    |                                                                                                                                               |
|   | Lac Gayot         | 75                      |                        |                                 |                    |                                                                                                                                               |           |
|   | Mining property   | 4                       | 50                     | 38,731                          | 8,929              | -                                                                                                                                             | 47,660    |
|   | Exploration costs |                    | 682,741                | 9,248                           | 9,078              | 701,067                                                                                                                                       |
|   |              |                    | 721,472                | 18,177                          | 9,078              | 748,727                                                                                                                                       |
|   |              |                    |                   |                                 |                    |                                                                                                                                               |           |
|   |              | (forward)               |                   | 2,910,755                       | 149,555            | (72,592)                                                                                                                                      | 2,987,718 |

Page 20

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

|   |               |                         |                        |                                 |                    | **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, 2005** | **Costs incurred** | **Balance as at February 28,2006**                                                                                                            |
|   |               | **%**                   | **$**                  | **$**                           | **$**              | **$**                                                                                                                                         |
|   |               |                    |                   |                            |               |                                                                                                                                          |      |
|   |               | (brought forward)       |                   | 2,910,755                       | 149,555            | (72,592)                                                                                                                                      | 2,987,718 |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Poste Lemoyne Ext. | 211                     |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    | 100                     | 15,455                 | 1,058,750                       | -                  | 1,074,205                                                                                                                                     |
|   | Exploration costs  |                    | 417,258                | 5,858                           | 6,570              | 429,686                                                                                                                                       |
|   |               |                    |                   | 432,713                         | 1,064,608          | 6,570                                                                                                                                         | 1,503,891 |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Megatem            | 882                     |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    | 45                      | 23,768                 | -                               | -                  | 23,768                                                                                                                                        |
|   | Exploration costs  |                    | 696,962                | 350,887                         | (128,721)          | 919,128                                                                                                                                       |
|   |               |                    |                   | 720,730                         | 350,887            | (128,721)                                                                                                                                     | 942,896   |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Megatem III        | 463                     |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    | 49                      | -                      | -                               | -                  | -                                                                                                                                             |
|   | Exploration costs  |                    | 207,097                | -                               | -                  | 207,097                                                                                                                                       |
|   |               |                    |                   | 207,097                         | -                  | -                                                                                                                                             | 207,097   |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Wabamisk           | 667                     |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining property    | 100                     | 47,244                 | 880                             | -                  | 48,124                                                                                                                                        |
|   | Exploration costs  |                    | 1,834                  | 77,598                          | (35,612)           | 43,820                                                                                                                                        |
|   |               |                    |                   | 49,078                          | 78,478             | (35,612)                                                                                                                                      | 91,944    |
|   |               |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Others             |                    |                   |                                 |                    |                                                                                                                                               |           |
|   | Mining properties  |                    | 307,047                | 271,515                         | (181,461)          | 397,101                                                                                                                                       |
|   | Exploration costs  |                    | 645,311                | 1,000,289                       | (1,208,935)        | 436,665                                                                                                                                       |
|   |               |                    | 952,358                | 1,271,804                       | (1,390,396)        | 833,766                                                                                                                                       |
|   |               |                    |                   | 5,272,731                       | 2,915,332          | (1,620,751)                                                                                                                                   | 6,567,312 |

Page 21

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **Change in mining properties**                                |        |        |
|----------------------------------------------------------------|-------------|-------------|
|                                                           | **2007**    | **2006**    |
|                                                           | **$**       | **$**       |
|                                                           |             |             |
|                                                           |             |             |
| Balance- Beginning of period                                   | 6,567,312   | 5,272,731   |
|                                                           |             |             |
| Costs incurred during the period                               |             |             |
|                                                           |             |             |
| Acquisition of a mining property                               | 2,168,769   | -           |
| Claims et permits                                              | 1,151,336   | 1,431,915   |
| Analyses                                                       | 290,252     | 99,794      |
| Drilling                                                       | 421,173     | 406,742     |
| Geophysics                                                     | 457,406     | 106,761     |
| Geology                                                        | 301,911     | 193,970     |
| Geochemistry                                                   | 24,393      | -           |
| Transport                                                      | 1,036,784   | 317,010     |
| Blasting                                                       | -           | 39,577      |
| Professional fees                                              | 763,041     | 290,542     |
| Accomodation                                                   | 152,190     | 29,021      |
|                                                           | 6,767,255   | 2,915,332   |
|                                                           |             |             |
| Mining properties under option                                 | (80,424)    | (35,000)    |
| Mining properties abandoned, written off or sold               | (1,939,285) | (1,130,042) |
| Credit on duties refundable for loss and refundable tax credit |             |             |
| for resources                                                  | (1,576,322) | (455,709)   |
|                                                           | (3,596,031) | (1,620,751) |
|                                                           |             |             |
| Balance- End of period                                         | 9,738,536   | 6,567,312   |

a) On May 6, 2005, the company granted Goldcorp Inc. ( formerly Placer Dome (CLA) Limited ) the option to acquire a 50% interest in the Corvet Est property for a consideration consisting of $90,000 in cash and exploration work totalling $4,000,000 to be carried out no later than May 6, 2010. As at February 28, 2007, Goldcorp Inc. had made a cash payment of $55,000 and had spent $1,891,109 on exploration work.

b) On December 9, 2005, the company granted Exploration Matamec Inc. the option to acquire a 50% interest in the La Grande Est property for a consideration consisting of $50,000 in cash and exploration work totalling $600,000 to be carried out no later than October 31, 2008. As at February 28, 2007, Exploration Matamec Inc. had made a cash payment of $25,000 and had spent $116,389 on exploration work.

----

| **Virginia Mines Inc.**          |
|----------------------------------|
| (an exploration company)         |
| Notes to Financial Statements    |   |
| February 28, 2007, 2006 and 2005 |
|                             |   |   |   |
| (expressed in Canadian dollars)  |   |

c) On April 10, 2006, the company granted Breakwater Resources Ltd. the option to acquire a 50 % interest in the Coulon JV property for a consideration consisting of $180,000 in cash and exploration work totalling $6,500,000 to be carried out no later than April 10, 2014. As at February 28, 2007, Breakwater Resources Ltd. had made a cash payment of $25,000 and had spent $1,697,243 on exploration work.

d) On April 27, 2006, the company granted Uranium Star ( formerly Yukon Resources Corporation ) the option to acquire a 75% interest in the Sagar property for a consideration consisting of 2,000,000 shares and 2,000,000 warrants of its share capital and exploration work totalling $2,000,000 to be carried out no later than August 31, 2008. Moreover, Uranium Star can, at any time, buy the 25 % Virginia interest in consideration of 1,000,000 shares and 1,000,000 warrants. As at February 28, 2007, Uranium Star had issued 3,000,000 shares and 3,000,000 warrants and had spent $1,779,121 in exploration work. The gain of $4,328,564 arising from this transaction is presented in the financial statements under "Option payments received as financial instruments in excess of cost of mining property". 

e) On August 29, 2006, the company granted MacDonald Mines Ltd. the option to acquire a 50% interest in the LG 3.5 property for a consideration consisting of $40,000 in cash and exploration work totalling $1,200,000 to be carried out no later than August 29, 2011. As at February 28, 2007, MacDonald Mines Ltd. had made a cash payment of $5,000 and had spent $59,253 on exploration work.

f) On November 20, 2006, the company granted Eloro Resources Ltd. the option to acquire a 50% interest in the La Grande Nord property for a consideration consisting of $50,000 in cash or in shares and exploration work totalling $1,000,000 to be carried out no later than November 20, 2011. As at February 28, 2007, Eloro Resources Ltd. had made a share payment of $15,000 and had not carried out any exploration work.

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **Cost of mining properties abandoned or written off**                                                          |                            |
|-----------------------------------------------------------------------------------------------------------------|---------------------------------|
|                                                                                                            |                            |   |   |
|                                                                                                            |                            | **2007** | **2006** |
|                                                                                                            |                            | **$** | **$** |
|                                                                                                            |                            |  |  |
|                                                                                                            | Apple                           | 41,914 | - |
|                                                                                                            | Auclair                         | 385,706 | - |
|                                                                                                            | Baie Payne                      | - | 65,652 |
|                                                                                                            | Chutes Des Passes               | - | 159,020 |
|                                                                                                            | Coulon                          | - | 180,078 |
|                                                                                                            | Dieppe                          | 3,764 | - |
|                                                                                                            | Duquet                          | - | 14,291 |
|                                                                                                            | Eléonore Régional | 10,545 | - |
|                                                                                                            | EM1                             | 109,694 | - |
|                                                                                                            | Gossan JFO                      | 7,599 | - |
|                                                                                                            | Grenville                       | 4,273 | - |
|                                                                                                            | Guyer Sud                       | 216 | 4,069 |
|                                                                                                            | La Grande Sud                   | 2,908 | - |
|                                                                                                            | Eider                           | 60,228 | - |
|                                                                                                            | Eakins                          | 40,751 | - |
|                                                                                                            | Lac Bonfait                     | - | 65,436 |
|                                                                                                            | Lac Fagnant                     | - | 65,587 |
|                                                                                                            | Lac Gayot                       | - | 1,052 |
|                                                                                                            | Lac Hayot                       | 7,956 | - |
|                                                                                                            | Lac Noëlla                 | - | 560,708 |
|                                                                                                            | Wahemen                         | 25,581 | - |
|                                                                                                            | Lac Watson                      | 4,293 | - |
|                                                                                                            | Megatem                         | 943,757 | 6,703 |
|                                                                                                            | Megatem III                     | 247,137 | - |
|                                                                                                            | Triestre                        | 4,747 | - |
|                                                                                                            | 23D                             | 8,199 | - |
|                                                                                                            | Others                          | 5 | 1,549 |
|                                                                                                            |                            |  |  |
|                                                                                                            | Total *                         | 1,909,273 | 1,124,145 |
|                                                                                                            |                            |   |   |
|                                                                                                            |                            |   |   |
| * Mining properties are abandonned or written off in whole or in part because of their low discovery potential. |

Page 24

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **8**                                                                                                                      | **Warrants**                                    |                                          |         |               |
|----------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------|-----------------------------------------------|--------------|--------------------|
|                                                                                                                       |                                            |                                          |         |               |
| The following tables present the warrant activity since June 1, 2004 and summarize information about outstanding warrants: |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       | **Twelve-Month Period Ended February 28, 2007** |
|                                                                                                                       |                                            |                                               |              | **Weighted**       |
|                                                                                                                       |                                            |                                               | **Carrying** | **average**        |
|                                                                                                                       |                                            | **Number**                                    | **value**    | **exercise price** |
|                                                                                                                       |                                            |                                               | **$**        | **$**              |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       | Outstanding as at March 1, 2006 *               | 417,713                                       | 446,117      | 10.80              |
|                                                                                                                       | Granted **                                      | 484,162                                       | 261,114      | 5.84               |
|                                                                                                                       | Exercised                                       | (415,427)                                     | (443,675)    | 10.80              |
|                                                                                                                       | Expired                                         | (2,286)                                       | (2,442)      | 10.80              |
|                                                                                                                       | Outstanding as at February 28, 2007 ***         | 484,162                                       | 261,114      | 5.84               |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       | **Twelve-Month Period Ended February 28, 2006** |
|                                                                                                                       |                                            |                                               |              | **Weighted**       |
|                                                                                                                       |                                            |                                               | **Carrying** | **average**        |
|                                                                                                                       |                                            | **Number**                                    | **value**    | **exercise price** |
|                                                                                                                       |                                            |                                               | **$**        | **$**              |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       | Outstanding as at March 1, 2005                 | 994,011                                       | 554,380      | 4.02               |
|                                                                                                                       | Granted ****                                    | 501,750                                       | 550,771      | 10.80              |
|                                                                                                                       | Exercised                                       | (1,078,048)                                   | (659,034)    | 4.62               |
|                                                                                                                       | Outstanding as at February 28, 2006             | 417,713                                       | 446,117      | 10.80              |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       |                                            |                                          |         |               |
|                                                                                                                       |                                            | **Nine-Month Period Ended February 28, 2005** |
|                                                                                                                       |                                            |                                               |              | **Weighted**       |
|                                                                                                                       |                                            |                                               | **Carrying** | **average**        |
|                                                                                                                       |                                            | **Number**                                    | **value**    | **exercise price** |
|                                                                                                                       |                                            |                                               | **$**        | **$**              |
|                                                                                                                       |                                            |                                               |              |                    |
|                                                                                                                       | Outstanding as at June 1, 2004                  | 1,599,033                                     | 883,255      | 3.86               |
|                                                                                                                       | Granted ****                                    | 12,000                                        | 12,984       | 7.50               |
|                                                                                                                       | Exercised                                       | (540,099)                                     | (341,859)    | 3.70               |
|                                                                                                                       | Matured                                         | (76,923)                                      | -            | 3.20               |
|                                                                                                                       | Outstanding as at February 28, 2005             | 994,011                                       | 554,380      | 4.02               |

Page 25

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| *Under the agreement entered into with Goldcorp Inc., 11% of the exercise price of those warrants will be cashed by the  |
|--------------------------------------------------------------------------------------------------------------------------|
| company and the balance will be allocated to Goldcorp Inc.                                                               |   |   |
| **These 484,162 warrants of $5.84 were granted under a private placement with Goldcorp Inc.                              |
| ***The warrants expire on November 18, 2007                                                                              |   |   |   |
| ****These warrants were granted in connection with private placements to common shareholders and to agents as share      |
| issue expenses.                                                                                                          |   |   |   |
|                                                                                                                     |   |   |   |
|                                                                                                                     |   |   |   |
| The fair value of stock options granted has been estimated using the Black-Sholes model with the following assumptions : |
|                                                                                                                     |   |   |   |
|                                                                                                                     | **Periods Ended February 28,** |
|                                                                                                                     | **2007** | **2006** | **2005** |
|                                                                                                                     |  |  |  |
| Risk-free interest rate                                                                                                  | 4.11% | 2.90% | 2.94% |
| Expected volatility                                                                                                      | 50% | 55% | 51% |
| Dividend yield                                                                                                           | Nil | Nil | Nil |
| Weighted average expected life                                                                                           | 18 months | 12 months | 12 months |
| Weighted average fair value of warrants granted                                                                          | $0.539 | $0.549 | $0.541 |

Page 26

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **9**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              | **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. A maximum of 10% of outstanding shares may be granted (maximum of 5% of the number of common shares outstanding in favour of one person).      
Options are exercisable over a maximum period of ten years following the date of grant. All options are vested, except for:

● 90,000 options granted to directors and officers during the period ended February 28, 2007, which vest after one year of   service, being April 6, 2007. |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                |                                            |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | The following tables present the stock option activity since June 1, 2004 and summarize information about stockoptions outstanding and exercisable as at February 28, 2007 : |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                |                                            |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                | **Twelve-Month Period Ended February 28, 2007** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                |                                                 |  | **Weighted** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                |                                                 | **Carrying** | **average** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                | **Number**                                      | **value** | **exercise price** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                |                                                 | **$** | **$** |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         | Outstanding and exercisable as at March 1, 2006     | -                                               | - | - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         | Granted                                             | 1,146,000                                       | - | 4.17 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         | Exercised                                           | (52,500)                                        | (143,152) | 3.93 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         | Cancelled *                                         | (7,000)                                         | (18,411) | 4.20 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         | Stock-base compensation                             | -                                               | 3,076,683 | - |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                     |                                                 |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         | Outstanding as at February 28, 2007                 | 1,086,500                                       | 2,915,120 | 4.18 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                     |                                                 |  |  |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         | Outstanding and exercisable as at February 28, 2007 | 996,500                                         | 2,895,074 | 4.16 |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                |                                            |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |                                                                                                                                                                         |                                                |                                            |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               | * During the period ended February 28, 2007, 7,000 stock options were cancelled.                                                                                             |
| The fair value of stock options in the amount of $18,411 has been reflected in the contributed surplus.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |

|   | The following table summarizes information about stock options outstanding as at February 28, 2007 : |
|--------|------------------------------------------------------------------------------------------------------|
|   |                                                                                                 |   |   |   |   |   |
|   |                                                                                                 | **Options outstanding** |
|   |                                                                                                 |  |  | **Weighted average remaining contractual life (years)** | **Weighted average exercise price $** |
|   |                                                                                                 | **Exercise price** | **Number** |
|   |                                                                                                 |  |
|   |                                                                                                 | between $3.89 and $4.44 | 1,086,500 |  | 9.18 | 4.18 |

Page 27

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

 (expressed in Canadian dollars)

|                                                                                                                      |                                                | **Twelve-Month Period Ended February 28, 2006** |
|---------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|-------------------------------------------------|
|                                                                                                                      |                                                |                                                 |  | **Weighted** |
|                                                                                                                      |                                                |                                                 | **Carrying** | **average** |
|                                                                                                                      |                                                | **Number**                                      | **value** | **exercise price** |
|                                                                                                                      |                                                |                                                 | **$** | **$** |
|                                                                                                                      |                                                |                                                 |  |  |
|                                                                                                                      | Outstanding and exercisable as at March 1, 2005     | 1,106,655                                       | 460,466 | 2.04 |
|                                                                                                                      | Granted                                             | 106,500                                         | 341,068 | 13.82 |
|                                                                                                                      | Exercised                                           | (1,213,155)                                     | (801,534) | 3.06 |
|                                                                                                                      |                                                     |                                                 |  |  |
|                                                                                                                      | Outstanding and exercisable as at February 28, 2006 | -                                               | - | - |
|                                                                                                                      |                                                |                                            |   |   |
|                                                                                                                      |                                                |                                            |   |   |
|                                                                                                                      |                                                |                                            |   |   |
|                                                                                                                      |                                                | **Nine-Month Period Ended February 28, 2005**   |
|                                                                                                                      |                                                |                                                 |  | **Weighted** |
|                                                                                                                      |                                                |                                                 | **Carrying** | **average** |
|                                                                                                                      |                                                | **Number**                                      | **value** | **exercise price** |
|                                                                                                                      |                                                |                                                 | **$** | **$** |
|                                                                                                                      |                                                |                                                 |  |  |
|                                                                                                                      | Outstanding and exercisable as at June 1, 2004      | 1,374,971                                       | 214,439 | 1.54 |
|                                                                                                                      | Granted                                             | 152,000                                         | 312,494 | 5.08 |
|                                                                                                                      | Exercised                                           | (419,816)                                       | (65,193) | 1.50 |
|                                                                                                                      | Cancelled *                                         | (500)                                           | (1,274) | 7.27 |
|                                                                                                                      |                                                     |                                                 |  |  |
|                                                                                                                      | Outstanding and exercisable as at February 28, 2005 | 1,106,655                                       | 460,466 | 2.04 |
|                                                                                                                      |                                                |                                            |   |   |
| * During the nine-month period ended February 28, 2005, 500 stock options were cancelled. The fair value of stock options |
| in the amount of $1,274 has been reflected in the contributed surplus.                                                    |                                                |
|                                                                                                                      |                                                |                                            |   |   |
| The fair value of stock options has been estimated using the Black-Scholes model with the following assumptions:          |
|                                                                                                                      |                                                |                                            |   |   |
|                                                                                                                      |                                                |                                            |   |   |
|                                                                                                                      |                                                | **Periods Ended February 28,**                  |
|                                                                                                                      |                                                | **2007**                                        | **2006** | **2005** |
|                                                                                                                      |                                                |                                                 |  |  |
|                                                                                                                      | Risk-free interest rate                             | 4.29%                                           | 2.95% | 3.98% |
|                                                                                                                      | Expected volatility                                 | 63%                                             | 57% | 56.5% |
|                                                                                                                      | Dividend yield                                      | Nil                                             | Nil | Nil |
|                                                                                                                      | Weighted average expected life                      | 82 months                                       | 12 months | 51 months |
| Weighted average fair value of options granted                                                                            | $2.685                                              | $1.601                                          | $1.03 |

Page 28

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

The fair value of stock options granted during the year has been included in the statements of earnings under captions “Professional and maintenance fees” and “General exploration costs”, and in Shareholders’ Equity under caption “Stock options”.

| **Stock-based compensation costs from stock option grants are included in the following items:**                                                                             |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                         |   |   |   |   |
|                                                                                                                                                                         |   | **Periods Ended February 28,** |
|                                                                                                                                                                         |   | **2007** | **2006** | **2005** |
|                                                                                                                                                                         | Professionnal and maintenance fees | 2,374,315 | 225,580 | 196,924 |
|                                                                                                                                                                         | General exploration costs | 916,322 | 115,488 | 115,570 |
|                                                                                                                                                                         |   | 3,290,637 | 341,068 | 312,494 |
|                                                                                                                                                                         |   |   |   |   |
|                                                                                                                                                                         |   |   |   |   |
|                                                                                                                                                                         |   |   |   |   |
| **b) Unit options**                                                                                                                                                          |   |   |   |
| The following tables present the unit option activity since March 1, 2005 and summarizes information about unit options outstanding and exercisable as at February 28, 2007: |
|                                                                                                                                                                         |   |  |  | **Weighted** |
|                                                                                                                                                                         |   |  | **Carrying** | **average** |
|                                                                                                                                                                         |   |  | **value** | **exercise price** |
|                                                                                                                                                                         |   | **Number** | **$** | **$** |
|                                                                                                                                                                         |   |  |  |  |
|                                                                                                                                                                         | Outstanding and exercisable as at March 1, 2006 | 47,865 | 101,178 | 8.20 |
|                                                                                                                                                                         | Exercised | (47,865) | (101,178) | 8.20 |
|                                                                                                                                                                         |   |  |  |  |
|                                                                                                                                                                         | Outstanding and exercisable as at February 28, 2007 | - | - | - |
|                                                                                                                                                                         |   |  |  |  |
|                                                                                                                                                                         |   |  |  |  |
|                                                                                                                                                                         |   |  |  | **Weighted** |
|                                                                                                                                                                         |   |  | **Carrying** | **average** |
|                                                                                                                                                                         |   |  | **value** | **exercise price** |
|                                                                                                                                                                         |   | **Number** | **$** | **$** |
|                                                                                                                                                                         |   |  |  |  |
|                                                                                                                                                                         | Outstanding and exercisable as at March 1, 2005 | - | - | - |
|                                                                                                                                                                         | Granted * | 117,900 | 249,301 | 8.20 |
|                                                                                                                                                                         | Exercised | (70,035) | (148,123) | 8.20 |
|                                                                                                                                                                         |   |  |  |  |
|                                                                                                                                                                         | Outstanding and exercisable as at February 28, 2006 | 47,865 | 101,178 | 8.20 |
|                                                                                                                                                                         |   |   |   |   |
| * Each unit option will entitle its holder, upon exercise, to one common share and one-quarter of one warrant.                                                               |

Page 29

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

 (expressed in Canadian dollars)

The fair value of unit options granted during the twelve-month period ended February 28, 2006 has been estimated using the Black-Scholes model with the following assumptions:

|                                                                                                                        | Risk-free interest rate                             |                                                |       | 2.77%        |
|-----------------------------------------------------------------------------------------------------------------------------|-----------------------------------------------------|-----------------------------------------------------|------------|--------------|
|                                                                                                                        | Expected volatility                                 |                                                |       | 56%          |
|                                                                                                                        |                                                | Dividend yield                                      |       |         | Nil |
|                                                                                                                        | Weighted average expected life                      |                                                | 12 months  |
|                                                                                                                        | Weighted average fair value of unit options granted | $1.057                                              |
|                                                                                                                        |                                                |                                                |       |         |   |
|                                                                                                                        |                                                |                                                |       |         |   |
| **c) Warrants (units)**                                                                                                     |                                                |                                                |       |
|                                                                                                                        |                                                |                                                |       |         |   |
| The following table presents the warrant activity since March 1, 2005 and summarizes information about warrants outstanding |
| and exercisable as at February 28, 2007:                                                                                    |                                                |                                                |       |
|                                                                                                                        |                                                |                                                |       |         |   |
|                                                                                                                        |                                                |                                                |            |              | **Weighted** |
|                                                                                                                        |                                                |                                                |            | **Carrying** | **average** |
|                                                                                                                        |                                                |                                                |            | **value**    | **exercise price** |
|                                                                                                                        |                                                |                                                | **Number** | **$**        | **$** |
|                                                                                                                        |                                                |                                                |            |              |  |
|                                                                                                                        |                                                | Outstanding and exercisable as at March 1, 2006     | -          | -            | - |
|                                                                                                                        |                                                | Further to the exercise of unit options*            | 11,966     | 62,203       | 10.80 |
|                                                                                                                        |                                                | Exercised                                           | (11,216)   | (58,302)     | 10.80 |
|                                                                                                                        |                                                | Expired                                             | (750)      | (3,901)      | 10.80 |
|                                                                                                                        |                                                |                                                |            |              |  |
|                                                                                                                        |                                                | Outstanding and exercisable as at February 28, 2007 | -          | -            | - |
|                                                                                                                        |                                                |                                                |       |         |   |
| *Under the agreement entered into with Goldcorp Inc., 11% of the exercise price of those warrants will be cashed by the     |
| company and the balance will be allocated to Goldcorp Inc.                                                                  |                                                |                                                |
|                                                                                                                        |                                                |                                                |       |         |   |
|                                                                                                                        |                                                |                                                |            |              | **Weighted** |
|                                                                                                                        |                                                |                                                |            | **Carrying** | **average** |
|                                                                                                                        |                                                |                                                |            | **value**    | **exercise price** |
|                                                                                                                        |                                                |                                                | **Number** | **$**        | **$** |
|                                                                                                                        |                                                |                                                |            |              |  |
|                                                                                                                        |                                                | Outstanding and exercisable as at March 1, 2005     | -          | -            | - |
|                                                                                                                        |                                                | Further to the exercise of                          |            |              |  |
|                                                                                                                        |                                                | unit options                                        | 17,509     | 91,024       | 10.80 |
|                                                                                                                        |                                                | Exercised                                           | (17,509)   | (91,024)     | 10.80 |
|                                                                                                                        |                                                |                                                |            |              |  |
|                                                                                                                        |                                                | Outstanding and exercisable as at February 28, 2006 | -          | -            | - |

Page 30

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **10** | **Cash flows**                                                                                 |                           |        |       |
|--------|------------------------------------------------------------------------------------------------|--------------------------------|-------------|------------|
|   |                                                                                           |                           |        |       |
|   | a) Net change in non-cash working capital items                                                |                           |        |       |
|   |                                                                                           |                           |        |       |
|   |                                                                                           | **Periods Ended February 28,** |
|   |                                                                                           | **2007**                       | **2006**    | **2005**   |
|   |                                                                                           | **$**                          | **$**       | **$**      |
|   |                                                                                           | (12 months)                    | (12 months) | (9 months) |
|   |                                                                                           |                           |        |       |
|   | Income taxes recoverable                                                                       | -                              | -           | 13,694     |
|   | Amounts receivable                                                                             | 712,467                        | (84,949)    | (643,649)  |
|   | Prepaid expenses                                                                               | (11,072)                       | (21,752)    | (11,143)   |
|   | Accounts payable and accrued liabilities                                                       | 2,391,081                      | 359,692     | (193,050)  |
|   |                                                                                           | 3,092,476                      | 252,991     | (834,148)  |
|   |                                                                                           |                           |        |       |
|   |                                                                                           |                           |        |       |
|   | b) Items not affecting cash and cash equivalents related to financing and investing activities |

|   |                                                                 | **Periods Ended February 28,** |
|--------|----------------------------------------------------------------------|--------------------------------|
|   |                                                                 | **2007**                       | **2006** | **2005** |
|   |                                                                 |                                | **$** | **$** |
|   |                                                                 | (12 months)                    | (12 months) | (9 months) |
|   |                                                                 |                                |  |  |
|   |                                                                 |                                |  |  |
|   | Long-term investments transferred to short-term investments          | -                              | 13,585 | 110,034 |
|   | Credit on duties refundable for loss and refundable                  |                                |  |  |
|   | tax credit receivable with respect to exploration costs              |                                |  |  |
|   | applied against mining properties                                    | 8,537,062                      | 7,613,226 | 3,878,544 |
|   | Acquisition of mining properties included in accounts payable        |                                |  |  |
|   | and accrued liabilities                                              | 351,752                        | 44,797 | 793,921 |
|   | Stock options exercised and included in share capital                | 377,152                        | 801,534 | 65,303 |
|   | Warrants exercised and included in share capital                     | 443,675                        | 659,034 | 341,859 |
|   | Warrants granted and included in share capital                       | -                              | 524,389 | 12,984 |
|   | Warrants granted and included in issue expenses                      | -                              | 26,382 | - |
|   | Warrants (units) granted and included in shareholders' equity        | 62,203                         | - | - |
|   | Warrants (units) exercised and included in share capital             | 58,302                         | - | - |
|   | Unit options granted and included in issue expenses                  | -                              | 249,301 | - |
|   | Unit options exercised and included in share capital                 | 101,178                        | 148,123 | - |
|   | Stock options granted and included inshare capital                   | -                              | 341,068 | - |
|   | Mining properties sold in consideration of short-term investments    | 6,273,269                      | 434,085 | - |
|   | Mining property purchased in consideration of the issuance of shares | 2,168,769                      | 1,040,000 | - |
|   |                                                                 |                                |  |  |

Page 31

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **11** | **Related party transactions**                                                                           |                           |        |       |
|--------|----------------------------------------------------------------------------------------------------------|--------------------------------|-------------|------------|
|   |                                                                                                     |                           |        |       |
|   | The company entered into the following transactions with companies owned by a director and an executive: |
|   |                                                                                                     |                           |        |       |
|   |                                                                                                     | **Periods Ended February 28,** |
|   |                                                                                                     | **2007**                       | **2006**    | **2005**   |
|   |                                                                                                     | **$**                          | **$**       | **$**      |
|   |                                                                                                     | (12 months)                    | (12 months) | (9 months) |
|   |                                                                                                     |                                |             |            |
|   | Expenses capitalized in mining properties                                                                | 362,357                        | 390,139     | 322,886    |
|   | Management fees                                                                                          | 169,014                        | 300,000     | 251,859    |
|   | Rent, office expenses and bonus                                                                          | 1,059,142                      | 564,497     | 335,697    |
|   | Professional fees                                                                                        | -                              | -           | 3,500      |
|   | Travelling                                                                                               | 62,532                         | 52,912      | 33,077     |
|   | Advertising and exhibitions                                                                              | 4,314                          | 11,513      | 1,144      |
|   | General exploration costs                                                                                | 156,013                        | 82,175      | 119,350    |
|   |                                                                                                     | 1,813,372                      | 1,401,236   | 1,067,513  |

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

Page 32

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **12**                                                                                                                                                                                                                | **Future income taxes**                                                                                                      |                           |        |        |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------|--------------------------------|-------------|-------------|
|                                                                                                                                                                                                                  |                                                                                                                         |                           |        |        |
| The reconciliation of the income tax expense, calculated using the combined federal and Quebec provincial statutory tax rate, to the income tax expense presented in the financial statements is detailed as follows: |
|                                                                                                                                                                                                                  |                                                                                                                         |                           |
|                                                                                                                                                                                                                  |                                                                                                                         |                           |        |        |
|                                                                                                                                                                                                                  |                                                                                                                         | **Periods Ended February 28,** |
|                                                                                                                                                                                                                  |                                                                                                                         | **2007**                       | **2006**    | **2005**    |
|                                                                                                                                                                                                                  |                                                                                                                         | **$**                          | **$**       | **$**       |
|                                                                                                                                                                                                                  |                                                                                                                         | (12 months)                    | (12 months) | (9 months)  |
|                                                                                                                                                                                                                  |                                                                                                                         |                           |        |        |
|                                                                                                                                                                                                                  |                                                                                                                         |                           |        |        |
|                                                                                                                                                                                                                  | Earnings (loss) before income taxes from continued operations                                                                | 218,642                        | (1,377,903) | (4,871,551) |
|                                                                                                                                                                                                                  | Combined federal and provincial income tax rate of33.69% (34.85% as at February 28, 2006 and 35.74% as at February 28, 2005) | 74,000                         | (480,000)   | (1,741,000) |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Non-taxable credit on duties refundable for loss                                                                             | (96,000)                       | (133,000)   | 5,000       |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Tax benefit not recognized previously                                                                                        | -                              | (4,528,000) | (332,076)   |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Non-deductible stock-based compensation                                                                                      | 1,109,000                      | 79,000      | 112,000     |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Expiry of operating losses carried forward                                                                                   | -                              | 127,000     | 285,000     |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Share issue expenses not affecting earnings                                                                                  | (8,000)                        | -           | (59,000)    |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Non-taxable portion of capital gain                                                                                          | (16,000)                       | (90,000)    | (92,000)    |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Change in enacted tax rates                                                                                                  | -                              | (484,000)   | -           |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Future income tax assets generated by the plan of arrangement as describe in Note 3                                          | (5,478,000)                    | -           | -           |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Others                                                                                                                       | 35,000                         | 103,545     | (134,000)   |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Change in valuation allowance                                                                                                | 4,380,000                      | -           | 1,624,000   |
|                                                                                                                                                                                                                  |                                                                                                                         |                                |             |             |
|                                                                                                                                                                                                                  | Future income taxes                                                                                                          | -                              | (5,405,455) | (332,076)   |

Page 33

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

 (expressed in Canadian dollars)

| The significant components of future income tax assets and liabilities are detailed as follows: |
|-------------------------------------------------------------------------------------------------|
|                                                                                            |   |   |   |   |
|                                                                                            |   | **Periods Ended February 28,** |
|                                                                                            |   | **2007** | **2006** | **2005** |
|                                                                                            |   | **$** | **$** | **$** |
|                                                                                            |   |   |   |   |
| Future income tax assets                                                                        |  |   |   |
|                                                                                            | Short-term investments | 473,000 | - | - |
|                                                                                            | Mining properties | 3,899,000 | 4,532,318 | 4,144,000 |
|                                                                                            | Losses carried forward | - | 855,000 | 424,000 |
|                                                                                            | Share issue expenses | 6,000 | 560,000 | 150,000 |
|                                                                                            | Others | 2,000 | 11,000 | 19,000 |
|                                                                                            |   | 4,380,000 | 5,958,318 | 4,737,000 |
|                                                                                            |   |  |  |  |
| Valuation allowance                                                                             | (4,380,000) | - | (4,737,000) |
|                                                                                            |   | - | 5,958,318 | - |
|                                                                                            |   |  |  |  |
| Future income tax liabilities                                                                   |  |  |  |
|                                                                                            | Deferred charges | - | 72,000 | - |
|                                                                                            |   |  |  |  |
| Net future income tax assets                                                                    | - | 5,886,318 | - |

Page 34

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

**13 Earnings per share**For the twelve-month period ended February 28, 2007 and for the nine-month period ended February 28, 2005, 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 periods was calculated using the basic weighted average number of shares outstanding (25,724,742 in 2007 and 18,694,887 in 2005).

|                                                      | **Periods Ended February 28,** |
|-----------------------------------------------------------|--------------------------------|
|                                                      | **2007**                       | **2006** | **2005** |
|                                                      | **$**                          | **$** | **$** |
|                                                      | (12 months)                    | (12 months) | (9 months) |
|                                                      |                           |   |   |
| Basic weighted average number of shares outstanding       | 25,724,742                     | 22,765,904 | 18,694,887 |
| Stock options                                             | 25,106                         | 503,879 | 810,435 |
| Unit options                                              | 55                             | 51,488 | - |
| Warrants                                                  | -                              | 215,541 | 203,686 |
|                                                      |                                |  |  |
| Diluted weighted average number of shares outstanding     | 25,749,903                     | 23,536,812 | 19,709,008 |
|                                                      |                                |  |  |
| 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        |                                |  |  |
| Stock options                                             | 616,500                        | - | 83,000 |
| Warrants                                                  | 484,162                        | - | 12,000 |

**4 Financial instruments**

**Fair value**

Cash and cash equivalents, amounts receivable and accounts payable and accrued liabilities are financial instruments whose fair value approximates their carrying value due to their short-term maturity or the current market rates.

The fair value of short-term investments, determined based on quoted market values, amounts to $39,303,189 and $22,711,829 as at February 28, 2007 and 2006, respectively.

| **Interest rate risk**                                                                                   |                   |
|----------------------------------------------------------------------------------------------------------|------------------------|
|                                                                                                     |                   |
| As at February 28, 2007 and 2006, the company's exposure to interest rate risk is summarized as follows: |
|                                                                                                     |                   |
| Cash and cash equivalents                                                                                | Variable interest rate |
| Short-term investments                                                                                   | As described in Note 4 |
| Amounts receivable                                                                                       | Non-interest -bearing  |
| Accounts payable and accrued liabilities                                                                 | Non-interest- bearing  |

Page 35

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

 (expressed in Canadian dollars)

**15 Subsequent events**

On March 1, 2007, the company granted Matamec Exploration a 50% option in the Uranium Nord property in considerationof payments totalling $47,532, received on April 2, 2007.

On March 31, 2007, Uranium Star fulfilled its commitment with respect to the Sagar property. All the claims of this propertywere transferred to Uranium Star on April 18, 2007.

On March 31, 2007, the company granted Nunavik Mineral Exploration Fund a 50% option in the Riviere Georges andChampdoré properties in consideration of payments totalling $51,940, received on April 10, 2007.

Page 36

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

**16 United States generally accepted accounting principles (U.S. GAAP)**

> 
The consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (GAAP) which differ, in certain respects, from U.S. GAAP.

Additional disclosures required under U.S. GAAP have been provided in the financial statements and notes. In addition, the following summarizes the principal differences between Canadian and U.S. GAAP and other required disclosures under U.S. GAAP.

**Mining properties**

Under U.S. GAAP, the acquisition cost of mining properties and exploration costs incurred are expensed in the year in which they are incurred.

**Short-term investments**

Under U.S. GAAP, short-term investments would be classified as “available for sale” securities. Consequently, these securities would be carried at fair value, with any unrealized holding gains or losses at balance sheet date being reflected in other comprehensive loss, net of income taxes. Under Canadian GAAP, short-term investments are carried at the lower of cost and market value. Gains or losses are determined under the specific identification method for term deposits and the average cost method for shares.

**Income taxes**

Under Canadian GAAP, the tax resulting from carry-forward of a loss recognized in a year subsequent to the year in which the loss was incurred is presented as a component of earnings before discontinued operations, regardless of the classification of the loss in the previous year.

Under U.S. GAAP, the subsequent recognition of the tax effect of items related to share capital must be recognized in the same manner as the transaction that created them.

Page 37

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

> 
**New accounting standards**

**FASB Statement No. 154 - Accounting Changes and Error Corrections (SFAS 154)**

In June 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error Corrections". This standard requires that an accounting change be applied retrospectively if the accounting pronouncement adopted does not include specific transition provisions, unless it is impractical to do. This statement is effective for accounting changes and corrections of errors made in fiscal years ended after December 15, 2005. 

**FASB Statement No. 123R – Share-Based Payment (SFAS 123R)**

On December 16, 2004, the Financial Accounting Standards Board ("FASB") issued SFAS 123R which replaces FASB Statement No. 123 ("SFAS 123"), "Accounting for Stock-Based Compensation" formely used by the company before the adoption of SFAS 123R, and eliminates the ability to account for share-based payment transactions using APB Opinion No. 25, "Accounting for Stock Issued to Employees". SFAS 123R covers the accounting requirements for a wide range of share-based compensation arrangements. SFAS 123R requires that compensation cost for employee stock-based compensation be measured based on the grant-date fair value and recognized in the financial statements over the vesting period (fair value method).

The company adopted this statement on March 1, 2006 and this adoption had no significant impact on its financial statements.

**FASB Interpretation No. 48 – Accounting for Uncertainty in Income Taxes - An interpretation of FASB Statement No. 109 (FIN 48)**

In June 2006, the FASB issued FASB interpretation No. 48, "Accounting for Uncertainty in Income Taxes" ("FIN 48"), an interpretation of FASB Statement No. 109, "Accounting for Income Taxes". FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. FIN 48 requires that the Company recognize the possible impact of the refusal of a tax position in the financial statements if that position is more likely than not of being sustained on audit, based on the technical merits of the position. FIN 48 also provides guidance on derecognition, classification, interest and penalties, accounting in interim periods and disclosure. The provisions of FIN 48 are effective beginning January 1, 2007 with the cumulative effect of the change in accounting principle recorded as an adjustment to the opening balance of deficit. The company has not yet evaluated its impact on its financial position or results of operations.

**FASB Statement No. 157 – Fair Value Measurements (SFAS 157)**

In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements" ("SFAS 157"). SFAS 157 defines fair value, establishes a framework for measuring fair value and expands disclosures regarding fair value measurements. SFAS 157 does not require any new fair value measurements but rather eliminates inconsistencies in guidance found in various prior accounting pronouncements. SFAS 157 is effective for fiscal years beginning after November 15, 2007. The company has not yet evaluated its impact on its financial position or results of operations.

----

**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **Reconciliation of net earnings (net loss) to conform with US GAAP**                                               |                           |        |
|---------------------------------------------------------------------------------------------------------------------|--------------------------------|-------------|
|                                                                                                                |                           |        |   |
| The following table presents the significant adjustments to net loss (net earnings) and net loss (net earnings) per |
| share from the company to comform with US GAAP.                                                                     |                           |        |   |
|                                                                                                                |                           |        |   |
|                                                                                                                | **Periods Ended February 28,** |
|                                                                                                                | **2007**                       | **2006**    | **2005** |
|                                                                                                                | **$**                          | **$**       | **$** |
|                                                                                                                | (12 months)                    | (12 months) | (9 months) |
|                                                                                                                |                           |        |   |
| Net earnings (net loss) from continuing operations for the period in accordance with Canadian GAAP                  | 218,642                        | 4,027,552   | (4,539,475) |
| Mining properties                                                                                                   | (3,171,224)                    | (1,294,581) | 3,741,419 |
| Repricing of stock options                                                                                          | -                              | 2,529,009   | (2,096,155) |
| Tax effect of flow-through shares                                                                                   | -                              | (129,264)   | (82,076) |
| Income taxes                                                                                                        | -                              | (556,259)   | - |
|                                                                                                                |                                |             |  |
| Net earnings (net loss) from continuing operations for the period in accordance with US GAAP                        | (2,952,582)                    | 4,576,457   | (2,976,287) |
|                                                                                                                |                                |             |  |
| Net earnings (net loss) from the discontinued operation for the                                                     |                                |             |  |
| period in accordance with Canadian GAAP                                                                             | (637,494)                      | 151,157     | (165,740) |
| Mining properties                                                                                                   | -                              | (8,464,312) | (2,459,869) |
| Net loss from the discontinued operation for the period in                                                          |                                |             |  |
| accordance with US GAAP                                                                                             | (637,494)                      | (8,313,155) | (2,625,609) |
| Net loss for the period in accordance with US GAAP                                                                  | (3,590,076)                    | (3,736,698) | (5,601,896) |
|                                                                                                                |                                |             |  |
| Other comprehensive loss                                                                                            |                                |             |  |
| Unrealized gains on short-term investments                                                                          | 3,416,463                      | 113,727     | 1,038,672 |
| Unrealized losses on long-term investments                                                                          | -                              | -           | (119,445) |
| Long-term investment transferred to short-term                                                                      |                                |             |  |
| investments                                                                                                         | -                              | (28,915)    | - |
| Comprehensive loss                                                                                                  | (173,613)                      | (3,651,886) | (4,682,669) |
|                                                                                                                |                                |             |  |
| Basic and diluted net earnings (net loss) from continuing                                                           |                                |             |  |
| operations per share in accordance with US GAAP                                                                     | (0.115)                        | 0.201       | (0.159) |
|                                                                                                                |                                |             |  |
| Basic and diluted net loss from the discontinued                                                                    |                                |             |  |
| operation per share in accordance with US GAAP                                                                      | (0.025)                        | (0.365)     | (0.140) |
|                                                                                                                |                                |             |  |
|                                                                                                                |                                |             |  |
| Total basic and diluted net loss per share in accordance with US GAAP                                               | (0.140)                        | (0.164)     | (0.299) |

Page 39

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**Virginia Mines Inc.**.(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| As a result of the above adjustments to net earnings (loss), differences with respect to shareholders' equity under US GAAP are as follows: |
|---------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                        |   |   |
|                                                                                                                                        |   |   |
|                                                                                                                                        | **As at February 28,** |
|                                                                                                                                        | **2007** | **2006** |
|                                                                                                                                        | **$** | **$** |
|                                                                                                                                        |  |  |
| Share capital                                                                                                                               |  |  |
| Share capital in accordance with Canadian GAAP                                                                                              | 94,447,526 | 85,471,959 |
| Stock options                                                                                                                               | 2,895,074 | - |
| Unit options                                                                                                                                | - | 101,178 |
| Warrants                                                                                                                                    | 261,114 | 446,117 |
| Stock-based compensation costs                                                                                                              | 1,200,092 | 1,200,092 |
| Tax effect of flow-through shares                                                                                                           | - | 211,340 |
| Income tax recovery                                                                                                                         | - | 556,259 |
|                                                                                                                                        |  |  |
| Share capital in accordance with US GAAP                                                                                                    | 98,803,806 | 87,986,945 |
|                                                                                                                                        |  |  |
| Contributed surplus                                                                                                                         |  |  |
| Contributed surplus in accordance with Canadian GAAP                                                                                        | 26,028 | 1,274 |
| Stock options cancelled                                                                                                                     | 703,756 | 703,756 |
| Contributed surplus in accordance with US GAAP                                                                                              | 729,784 | 705,030 |
|                                                                                                                                        |  |  |
| Accumulated deficit                                                                                                                         |  |  |
| Deficit in accordance with Canadian GAAP                                                                                                    | (41,445,011) | (25,052,049) |
| Mining properties                                                                                                                           | (9,738,536) | (17,964,769) |
| Stock-based compensation costs                                                                                                              | (1,903,848) | (1,903,848) |
| Tax effect of flow-through shares                                                                                                           | - | (211,340) |
| Income tax recovery                                                                                                                         | - | (556,259) |
|                                                                                                                                        |  |  |
| Deficit in accordance with US GAAP                                                                                                          | (53,087,395) | (45,688,265) |
|                                                                                                                                        |  |  |
| Other accumulated comprehensive income                                                                                                      |  |  |
| Unrealized gains on short-term investments and exploration funds                                                                            |  |  |
| Balance - Beginning of period                                                                                                               | 1,581,920 | 1,468,193 |
| Unrealized gains arising during the period                                                                                                  | 3,416,463 | 113,727 |
|                                                                                                                                        |  |  |
| Balance - End of period                                                                                                                     | 4,998,383 | 1,581,920 |
|                                                                                                                                        |  |  |
| Unrealized gains on long-term investments                                                                                                   |  |  |
| Balance - Beginning of period                                                                                                               | - | 28,915 |
| Long-term investment transferred to short-term investments                                                                                  | - | (28,915) |
|                                                                                                                                        |  |  |
| Balance - End of period                                                                                                                     | - | - |
|                                                                                                                                        |  |  |
| Other accumulated comprehensive income                                                                                                      | 4,998,383 | 1,581,920 |

Page 40

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **Balance sheets**                                  |                   |         |
|-----------------------------------------------------|------------------------|--------------|
|                                                |                   |         |
|                                                | **As at February 28,** |
|                                                | **2007**               | **2006**     |
|                                                | **$**                  | **$**        |
|                                                |                        |              |
| Current assets                                      |                        |              |
| Cash and cash equivalents                           | 6,139,543              | 10,455,911   |
| Short-term investments                              | 39,303,189             | 22,711,829   |
| Amounts receivable                                  | 9,113,525              | 8,902,156    |
| Prepaid expenses                                    | 96,935                 | 85,863       |
| Current assets of the discontinued operation        | -                      | 1,233,825    |
| Future income taxes                                 | -                      | 5,886,318    |
|                                                | 54,653,192             | 49,275,902   |
|                                                |                        |              |
|                                                |                        |              |
| Property, plant and equipment                       | 11,471                 | 11,217       |
| Intangible assets                                   | 2,035                  | 2,907        |
| Deferred charges                                    | -                      | 341,722      |
|                                                | 54,666,698             | 49,631,748   |
|                                                |                        |              |
|                                                |                        |              |
| Current liabilities                                 |                        |              |
| Accounts payable and accrued lisbilities            |                        |              |
| Related companies                                   | 30,685                 | 94,033       |
| Others                                              | 3,191,435              | 430,051      |
| Current liabilities of the discontinued operation   | -                      | 4,435,716    |
|                                                | 3,222,120              | 4,959,800    |
|                                                |                        |              |
| Long-term liabilities of the discontinued operation | -                      | 86,318       |
|                                                |                        |              |
| Shareholders' Equity                                |                        |              |
| Share capital                                       | 98,803,806             | 87,986,945   |
| Contributed surplus                                 | 729,784                | 705,030      |
| Deficit                                             | (53,087,395)           | (45,688,265) |
| Other accumulated comprehensive income              | 4,998,383              | 1,581,920    |
|                                                | 51,444,578             | 44,585,630   |
|                                                | 54,666,698             | 49,631,748   |

Page 41

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**Virginia Mines Inc.**(an exploration company)Notes to Financial StatementsFebruary 28, 2007, 2006 and 2005

(expressed in Canadian dollars)

| **Statements of cash flows**                                 |                           |         |        |
|--------------------------------------------------------------|--------------------------------|--------------|-------------|
|                                                         |                           |         |        |
|                                                         |                           |         |        |
|                                                         | **Periods Ended February 28,** |
|                                                         | **2007**                       | **2006**     | **2005**    |
|                                                         | **$**                          | **$**        | **$**       |
|                                                         | (12 months)                    | (12 months)  | (9 months)  |
|                                                         |                           |         |        |
|                                                         |                           |         |        |
| Operating activities                                         | (491,880)                      | (6,630,139)  | (3,699,666) |
| Financing activities                                         | 6,149,808                      | 27,722,813   | 8,459,133   |
| Investing activities                                         | (7,699,980)                    | (12,096,477) | 4,982,625   |
|                                                         |                                |              |             |
| Increase (decrease) in cash and cash equivalents             | (2,042,052)                    | 8,996,197    | 9,742,092   |
|                                                         |                                |              |             |
| Cash and cash equivalents used by the discontinued operation | (2,274,316)                    | (5,656,769)  | (2,625,609) |
|                                                         |                                |              |             |
| Cash and cash equivalents - Beginning of period              | 10,455,911                     | 7,116,483    | -           |
|                                                         |                                |              |             |
| Cash and cash equivalents - End of period                    | 6,139,543                      | 10,455,911   | 7,116,483   |
|                                                         |                           |         |        |
|                                                         |                           |         |        |
|                                                         |                           |         |        |
| **Statements of earnings**                                   |                           |         |        |
|                                                         |                           |         |        |
|                                                         | **Periods Ended February 28,** |
|                                                         | **2007**                       | **2006**     | **2005**    |
|                                                         | **$**                          | **$**        | **$**       |
|                                                         | (12 months)                    | (12 months)  | (9 months)  |
|                                                         |                                |              |             |
| Revenues                                                     | 7,664,078                      | 1,407,732    | 736,043     |
| Expenses                                                     | (10,616,660)                   | (1,551,207)  | (3,962,330) |
|                                                         |                                |              |             |
| Loss before income taxes and the discontinued operation      | (2,952,582)                    | (143,475)    | (3,226,287) |
|                                                         |                                |              |             |
| Income tax recovery                                          | -                              | (4,719,932)  | (250,000)   |
|                                                         |                                |              |             |
| Net earnings (net loss) from continuing operations           | (2,952,582)                    | 4,576,457    | (2,976,287) |
|                                                         |                                |              |             |
| Net loss from the discontinued operation                     | (637,494)                      | (8,313,155)  | (2,625,609) |
|                                                         |                                |              |             |
| Net loss for the period in accordance with US GAAP           | (3,590,076)                    | (3,736,698)  | (5,601,896) |

Page 42