ANNUAL CONSOLIDATED FINANCIAL
STATEMENTS





December
31, 2009


(Expressed
in United States Dollars, except where noted)














14142
Denver West Parkway, Suite 250, Golden, Colorado 80401


Telephone:
303.278.8464    Facsimile:
303.279.3772    Toll Free:
1.877.692.8182     email:
atna@atna.comwww.atna.com





INDEX
TO


FINANCIAL
STATEMENTS





Financial
Statements





The
following audited consolidated financial statements have been prepared by Atna
Resources Ltd. (the “Company") pursuant to Canadian generally accepted
accounting principles. The consolidated financial statements have been prepared
in United States dollars (“USD” or “US$”), except for certain note disclosures
that are reported in Canadian dollars (“CAD” or “C$”).





Reports
      of Independent Registered Public Accounting Firms
                  
                  Page
      3-4Consolidated
      Balance Sheets
                  
                  Page
      5Consolidated
      Statements of Operations
                  
                  Page
      6Consolidated
      Statement of Changes in Shareholders’ Equity
                  
                  Page
      7Consolidated
      Statements of Cash Flows
                  
                  Pages
      8-9Notes
      to Consolidated Financial Statements
                  
                  Pages 10-39


2


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Board of Directors and Shareholders


Atna
Resources Ltd.


Denver,
Colorado





We have
audited the accompanying consolidated balance sheets of Atna Resources Ltd.
(“the Company”) as of December 31, 2009 and 2008, and the related consolidated
statements of operations, cash flows and shareholders' equity for each of the
years in the two year period ended December 31, 2009.  These
consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.





We
conducted our audits in accordance with generally accepted auditing standards in
Canada and the standards of the Public Company Accounting Oversight Board
(United States).  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the consolidated financial
statements are free of material misstatement.  The Company is not
required to have, nor were we engaged to perform, an audit of its internal
control over financial reporting.  Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Company’s internal control
over financial reporting.  Accordingly, we express no such
opinion.  An audit also includes examining, on a test basis, evidence
supporting the amounts and disclosures in the consolidated 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.  We believe
that our audits provide a reasonable basis for our opinion.





In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the financial position of the Company and
subsidiaries, as of December 31, 2009 and 2008, and the results of their
operations and their cash flows for each of the years in the two year period
ended December 31, 2009, in conformity with Canadian generally accepted
accounting principles.





As
further discussed in Note 3 to the consolidated financial statements, the
Company has elected to change its reporting currency from the Canadian dollar to
the United States dollar in 2009. The 2008 financial statements have been
restated on this basis.





Ehrhardt
Keefe Steiner & Hottman PC





March 25,
2010


Denver,
Colorado


3


REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





DE VISSER
GRAY LLP


CHARTERED
ACCOUNTANTS





401
- 905 West Pender Street


Vancouver,
BC Canada


V6C
1L6





REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM





To the
Shareholders of Atna Resources Ltd.





We have
audited the consolidated statements of operations, changes in shareholders’
equity, and cash flows for the year ended December 31, 2007. 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 audit.





We conducted our audit in accordance
with generally accepted auditing standards in Canada andthe standards of
the Public Company Accounting Oversight Board (United States). 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 consolidated financial statements present fairly, in all material
respects, the results of the Company’s operations and its cash flows for the
year ended December 31, 2007 in accordance with Canadian generally accepted
accounting principles





As
further discussed in Note 3 to the 2009 consolidated financial statements,
during 2009 the Company elected to change its reporting currency from the
Canadian dollar to the United States dollar and the 2007 statements have been
restated on this basis.





“De
Visser Gray LLP”





CHARTERED
ACCOUNTANTS





Vancouver,
British Columbia


March 27,
2008, except as to Note 3 to the 2009




4


ATNA
RESOURCES LTD. AND SUBSIDIARIES


CONSOLIDATED
BALANCE SHEETS


As
of December 31





Restated2009
                                
                                
                                2008ASSETSCurrent
      assetsCash
      and cash equivalents
                                
                                $
                                13,060,300
                                
                                
                                $
                                16,707,300Investments
      available-for-sale
                                
                                
                                267,700
                                
                                
                                
                                287,200Gold
      inventories
                                
                                
                                6,936,200
                                
                                
                                
                                21,000Prepaids
      and other current assets
                                
                                
                                1,067,500
                                
                                
                                
                                880,800Total
      current assets
                                
                                
                                21,331,700
                                
                                
                                
                                17,896,300Non-current
      assetsProperty,
      plant, mine development and mineral interests, net
                                
                                
                                53,038,200
                                
                                
                                
                                43,876,400Restricted
      cash
                                
                                
                                4,076,100
                                
                                
                                
                                4,021,500Other
      non-current assets
                                
                                
                                455,300
                                
                                
                                
                                661,400Deferred
      income tax assets
                                
                                
                                956,000
                                
                                
                                
                                956,000Total
      assets
                                
                                $
                                79,857,300
                                
                                
                                $
                                67,411,600LIABILITIES
      AND SHAREHOLDERS' EQUITYCurrent
      liabilitiesAccounts
      payable
                                
                                $
                                1,802,200
                                
                                
                                $
                                1,992,300Derivative
      liabilities
                                
                                
                                547,600
                                
                                
                                
                                -Asset
      retirement obligations
                                
                                
                                938,900
                                
                                
                                
                                618,400Notes
      payable
                                
                                
                                1,321,200
                                
                                
                                
                                -Gold
      bonds, net of discount
                                
                                
                                2,872,000
                                
                                
                                
                                -Capital
      leases
                                
                                
                                1,623,600
                                
                                
                                
                                46,400Other
      current liabilities
                                
                                
                                574,000
                                
                                
                                
                                354,900Total
      current liabilities
                                
                                
                                9,679,500
                                
                                
                                
                                3,012,000Non-current
      liabilitiesNotes
      payable
                                
                                
                                837,200
                                
                                
                                
                                825,000Gold
      bonds, net of discount
                                
                                
                                9,857,400
                                
                                
                                
                                -Capital
      leases
                                
                                
                                1,355,600
                                
                                
                                
                                -Asset
      retirement obligations
                                
                                
                                4,090,200
                                
                                
                                
                                4,300,000Total
      liabilities
                                
                                
                                25,819,900
                                
                                
                                
                                8,137,000Shareholders'
      equityShare
      capital (no par value) unlimited shares authorized;
                                  issued
      and outstanding:  83,291,100 at December 31, 2009,
                                  and
      83,291,100 at December 31, 2008
                                
                                
                                83,583,000
                                
                                
                                
                                83,583,000Contributed
      surplus
                                
                                
                                2,809,900
                                
                                
                                
                                2,333,400Retained
      deficit
                                
                                
                                (34,020,000
                                )
                                
                                
                                (28,059,900
                                )Accumulated
      other comprehensive loss
                                
                                
                                1,664,500
                                
                                
                                
                                1,418,100Total
      shareholders' equity
                                
                                
                                54,037,400
                                
                                
                                
                                59,274,600Total
      liabilities and shareholders' equity
                                
                                $
                                79,857,300
                                
                                
                                $
                                67,411,600





On behalf
of the Board of Directors:





/s/ David K. Fagin
              
              /s/ David H. WatkinsDavid
      K. Fagin, Independent Director
              David
      H. Watkins, Chairman





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


5


ATNA
RESOURCES LTD. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF OPERATIONS


For
the Years Ended December 31





Restated
                                
                                
                                Restated2009
                                
                                
                                2008
                                
                                
                                2007REVENUESales
                                
                                $
                                8,689,200
                                
                                
                                $
                                155,100
                                
                                
                                $
                                -EXPENSES
      (GAINS)Cost
      of sales
                                
                                
                                9,126,100
                                
                                
                                
                                148,400
                                
                                
                                
                                -Depreciation
                                
                                
                                155,600
                                
                                
                                
                                125,400
                                
                                
                                
                                109,100General
      and administrative
                                
                                
                                3,402,900
                                
                                
                                
                                4,062,900
                                
                                
                                
                                1,795,100Exploration
                                
                                
                                1,464,700
                                
                                
                                
                                532,800
                                
                                
                                
                                1,779,600Accretion
      expense
                                
                                
                                450,000
                                
                                
                                
                                350,800
                                
                                
                                
                                -Provision
      for final site restoration
                                
                                
                                137,300
                                
                                
                                
                                1,367,900
                                
                                
                                
                                -Write
      off properties and receivables
                                
                                
                                -
                                
                                
                                
                                514,600
                                
                                
                                
                                174,80014,736,600
                                
                                
                                
                                7,102,800
                                
                                
                                
                                3,858,600Operating
      loss
                                
                                
                                (6,047,400
                                )
                                
                                
                                (6,947,700
                                )
                                
                                
                                (3,858,600
                                )OTHER
      INCOME (EXPENSE)Interest
      income
                                
                                
                                59,300
                                
                                
                                
                                338,300
                                
                                
                                
                                475,800Interest
      expense
                                
                                
                                (433,600
                                )
                                
                                
                                (49,600
                                )
                                
                                
                                -Unrealized
      gain on derivatives
                                
                                
                                119,600
                                
                                
                                
                                -
                                
                                
                                
                                -Gain
      on asset disposals
                                
                                
                                196,300
                                
                                
                                
                                19,788,200
                                
                                
                                
                                125,700Write
      off of marketable securities
                                
                                
                                -
                                
                                
                                
                                (405,900
                                )
                                
                                
                                -(Loss)
      gain on sale of investments available-for-sale
                                
                                
                                (26,800
                                )
                                
                                
                                24,800
                                
                                
                                
                                257,500Unrealized
      loss on short term investments
                                
                                
                                -
                                
                                
                                
                                (24,100
                                )
                                
                                
                                -Other
      income (loss)
                                
                                
                                172,500
                                
                                
                                
                                76,900
                                
                                
                                
                                (116,800
                                )87,300
                                
                                
                                
                                19,748,600
                                
                                
                                
                                742,200(5,960,100
                                )
                                
                                
                                12,800,900
                                
                                
                                
                                (3,116,400
                                )Income
      tax benefit
                                
                                
                                -
                                
                                
                                
                                3,004,100
                                
                                
                                
                                -Net
      (loss) income
                                
                                
                                (5,960,100
                                )
                                
                                
                                15,805,000
                                
                                
                                
                                (3,116,400
                                )COMPREHENSIVE
      (LOSS) INCOMEUnrealized
      losses on translating the financials of self sustaining foreign
      operations
                                
                                
                                (7,000
                                )
                                
                                
                                (394,100
                                )
                                
                                
                                2,020,100Unrealized
      gains on translating the adjustment to opening balance, change in
      accounting policy
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                252,000Unrealized
      gain (loss) on investments available-for-sale
                                
                                
                                53,900
                                
                                
                                
                                -
                                
                                
                                
                                (202,400
                                )Realized
      gain (loss) on available for sale securities recognized in net
      loss
                                
                                
                                199,500
                                
                                
                                
                                -
                                
                                
                                
                                (257,500
                                )Other
      comprehensive income (loss)
                                
                                
                                246,400
                                
                                
                                
                                (394,100
                                )
                                
                                
                                1,812,200Comprehensive
      (loss) income
                                
                                
                                (5,713,700
                                )
                                
                                
                                15,410,900
                                
                                
                                
                                (1,304,200
                                )LOSS
      PER SHAREBasic
      and diluted (loss) income per share
                                
                                $
                                (0.07
                                )
                                
                                $
                                0.20
                                
                                
                                $
                                (0.05
                                )Basic
      weighted-average shares outstanding
                                
                                
                                83,291,133
                                
                                
                                
                                79,166,725
                                
                                
                                
                                64,581,804Effect
      of dilutive securities:Stock
      options, convertible debentures, and warrants
                                
                                
                                -
                                
                                
                                
                                -
                                
                                
                                
                                -Diluted
      weighted-average shares outstanding
                                
                                
                                83,291,133
                                
                                
                                
                                79,166,725
                                
                                
                                
                                64,581,804





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


6


ATNA
RESOURCES LTD. AND SUBSIDIARIES


CONSOLIDATED
STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY


For
the Year Ended December 31





AccumulatedShare
      Capital
                              
                              
                              
                              
                              
                              
                              
                              
                              Other
                              
                              
                              TotalNumber
      of
                              
                              
                              
                              
                              
                              Retained
                              
                              
                              Contributed
                              
                              
                              Comprehensive
                              
                              
                              Shareholders'Shares
                              
                              
                              Amount
                              
                              
                              Deficit
                              
                              
                              Surplus
                              
                              
                              Gain
      (Loss)
                              
                              
                              EquityBalances,
      December 31, 2006, restated
                              
                              
                              64,176,800
                              
                              
                              $
                              52,159,900
                              
                              
                              $
                              (40,748,500
                              )
                              
                              $
                              1,545,300
                              
                              
                              $
                              -
                              
                              
                              $
                              12,956,700Adjustment
      to opening balance, change in accounting policy
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              1,795,500
                              
                              
                              
                              -
                              
                              
                              
                              252,000
                              
                              
                              
                              2,047,500Exercise
      of stock options
                              
                              
                              545,800
                              
                              
                              
                              351,800
                              
                              
                              
                              -
                              
                              
                              
                              (87,900
                              )
                              
                              
                              -
                              
                              
                              
                              263,900Share-based
      compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              546,900
                              
                              
                              
                              -
                              
                              
                              
                              546,900Unrealized
      loss on investments available-for-sale
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (202,400
                              )
                              
                              
                              (202,400
                              )Realized
      loss on available for sale securities
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (257,500
                              )
                              
                              
                              (257,500
                              )Foreign
      exchange loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              2,020,100
                              
                              
                              
                              2,020,100Net
      loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (4,911,900
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (4,911,900
                              )Balances,
      December 31, 2007, restated
                              
                              
                              64,722,600
                              
                              
                              $
                              52,511,700
                              
                              
                              $
                              (43,864,900
                              )
                              
                              $
                              2,004,300
                              
                              
                              $
                              1,812,200
                              
                              
                              $
                              12,463,300Exercise
      of stock options
                              
                              
                              850,000
                              
                              
                              
                              820,600
                              
                              
                              
                              -
                              
                              
                              
                              (252,500
                              )
                              
                              
                              -
                              
                              
                              
                              568,100Issuance
      cost of stock options
                              
                              
                              -
                              
                              
                              
                              (58,100
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (58,100
                              )Issuance
      for merger
                              
                              
                              17,114,200
                              
                              
                              
                              29,821,700
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              29,821,700Issuance
      for property purchase
                              
                              
                              604,300
                              
                              
                              
                              487,100
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              487,100Share-based
      compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              581,600
                              
                              
                              
                              -
                              
                              
                              
                              581,600Foreign
      exchange loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (394,100
                              )
                              
                              
                              (394,100
                              )Net
      income
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              15,805,000
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              15,805,000Balances,
      December 31, 2008, restated
                              
                              
                              83,291,100
                              
                              
                              $
                              83,583,000
                              
                              
                              $
                              (28,059,900
                              )
                              
                              $
                              2,333,400
                              
                              
                              $
                              1,418,100
                              
                              
                              $
                              59,274,600Share-based
      compensation
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              381,900
                              
                              
                              
                              -
                              
                              
                              
                              381,900Options
      converted into cash
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (7,300
                              )
                              
                              
                              -
                              
                              
                              
                              (7,300
                              )Unrealized
      gain on available for sale securities
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              53,900
                              
                              
                              
                              53,900Realized
      loss on available for sale securities
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              199,500
                              
                              
                              
                              199,500Equity
      portion of debentures
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              101,900
                              
                              
                              
                              -
                              
                              
                              
                              101,900Foreign
      exchange loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (7,000
                              )
                              
                              
                              (7,000
                              )Net
      loss
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (5,960,100
                              )
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (5,960,100
                              )Balances,
      December 31, 2009
                              
                              
                              83,291,100
                              
                              
                              $
                              83,583,000
                              
                              
                              $
                              (34,020,000
                              )
                              
                              $
                              2,809,900
                              
                              
                              $
                              1,664,500
                              
                              
                              $
                              54,037,400





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


7


ATNA
RESOURCES LTD. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS


For
the Years Ended December 31





Restated
                              
                              
                              Restated2009
                              
                              
                              2008
                              
                              
                              2007Cash
      flows from operating activities:Net
      (loss) income
                              
                              $
                              (5,960,100
                              )
                              
                              $
                              15,805,000
                              
                              
                              $
                              (3,116,400
                              )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
                              
                              
                              155,600
                              
                              
                              
                              125,400
                              
                              
                              
                              109,100Unrealized
      gain on derivatives
                              
                              
                              (119,600
                              )
                              
                              
                              -
                              
                              
                              
                              -Investment
      income
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              (325,300
                              )Gain
      on asset disposals
                              
                              
                              (196,300
                              )
                              
                              
                              (19,788,200
                              )
                              
                              
                              (125,700
                              )Income
      tax benefit
                              
                              
                              -
                              
                              
                              
                              (3,004,100
                              )
                              
                              
                              -Write
      off  properties and receivables
                              
                              
                              -
                              
                              
                              
                              514,600
                              
                              
                              
                              174,800Purchase
      short term investments
                              
                              
                              -
                              
                              
                              
                              (113,900
                              )
                              
                              
                              (912,500
                              )Write
      off marketable securities
                              
                              
                              -
                              
                              
                              
                              405,900
                              
                              
                              
                              -Share
      based compensation expense
                              
                              
                              381,900
                              
                              
                              
                              581,600
                              
                              
                              
                              546,900Provision
      for asset retirement obligation
                              
                              
                              137,300
                              
                              
                              
                              1,367,900
                              
                              
                              
                              -Accretion
      of asset retirement obligation
                              
                              
                              450,000
                              
                              
                              
                              350,800
                              
                              
                              
                              -Other
      adjustments
                              
                              
                              77,800
                              
                              
                              
                              (24,800
                              )
                              
                              
                              (257,500
                              )Changes
      in operating assets and liabilities:(Increase)
      decrease in inventories
                              
                              
                              (3,813,300
                              )
                              
                              
                              130,400
                              
                              
                              
                              -(Increase)
      decrease in prepaid and other assets
                              
                              
                              (240,600
                              )
                              
                              
                              (846,400
                              )
                              
                              
                              (10,300
                              )Increase
      in accounts payable and accrued liabilities
                              
                              
                              76,100
                              
                              
                              
                              336,600
                              
                              
                              
                              117,300Decrease
      in asset retirement obligations
                              
                              
                              (527,300
                              )
                              
                              
                              (1,619,200
                              )
                              
                              
                              -Decrease
      in other liabilities
                              
                              
                              -
                              
                              
                              
                              -
                              
                              
                              
                              -Increase
      in restricted cash
                              
                              
                              (54,700
                              )
                              
                              
                              (285,700
                              )
                              
                              
                              (3,500
                              )Total
      adjustments
                              
                              
                              (3,673,100
                              )
                              
                              
                              (21,869,100
                              )
                              
                              
                              (686,700
                              )Net
      cash used in operating activities
                              
                              
                              (9,633,200
                              )
                              
                              
                              (6,064,100
                              )
                              
                              
                              (3,803,100
                              )Cash
      flows from investing activities:Purchases
      and development of property and equipment
                              
                              
                              (8,633,100
                              )
                              
                              
                              (8,203,500
                              )
                              
                              
                              (618,500
                              )Merger
      transaction costs
                              
                              
                              -
                              
                              
                              
                              (730,700
                              )
                              
                              
                              (702,500
                              )Cash
      received in merger
                              
                              
                              -
                              
                              
                              
                              867,600
                              
                              
                              
                              -Proceeds
      from sale of investments available-for-sale
                              
                              
                              720,000
                              
                              
                              
                              6,816,500
                              
                              
                              
                              4,590,600Proceeds
      from sale of property and equipment
                              
                              
                              70,500
                              
                              
                              
                              20,020,000
                              
                              
                              
                              252,900Net
      cash (used in) provided by investing activities
                              
                              
                              (7,842,600
                              )
                              
                              
                              18,769,900
                              
                              
                              
                              3,522,500Cash
      flows from financing activities:Issuance
      of stock - exercise of options
                              
                              
                              (7,400
                              )
                              
                              
                              568,100
                              
                              
                              
                              264,000Transaction
      costs other
                              
                              
                              (983,000
                              )
                              
                              
                              (58,100
                              )Issuance
      of gold bonds
                              
                              
                              14,500,000
                              
                              
                              
                              -
                              
                              
                              
                              -Issuance
      of notes payable
                              
                              
                              1,423,100
                              
                              
                              
                              -
                              
                              
                              
                              -Payments
      on capital lease obligations
                              
                              
                              (1,112,700
                              )
                              
                              
                              (14,400
                              )
                              
                              
                              -Net
      cash provided by financing activities
                              
                              
                              13,820,000
                              
                              
                              
                              495,600
                              
                              
                              
                              264,000Effect
      of exchange rate changes on cash
                              
                              
                              8,800
                              
                              
                              
                              (75,400
                              )
                              
                              
                              567,400Net
      (decrease) increase in cash and cash equivalents
                              
                              
                              (3,647,000
                              )
                              
                              
                              13,126,000
                              
                              
                              
                              550,800Cash
      and cash equivalents, beginning of period
                              
                              
                              16,707,300
                              
                              
                              
                              3,581,300
                              
                              
                              
                              3,030,500Cash
      and cash equivalents, end of period
                              
                              $
                              13,060,300
                              
                              
                              $
                              16,707,300
                              
                              
                              $
                              3,581,300





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


8


ATNA
RESOURCES LTD. AND SUBSIDIARIES


CONSOLIDATED
STATEMENTS OF CASH FLOWS, continued


For
the Years Ended December 31





Restated
                                                
                                                
                                                Restated2009
                                                
                                                
                                                2008
                                                
                                                
                                                2007Supplemental
      disclosures of cash flow information:1.
                                                Interest
      paid
                                                
                                                $
                                                345,600
                                                
                                                
                                                $
                                                49,600
                                                
                                                
                                                $
                                                -Supplemental
      disclosures on noncash investing activity:1.
                                                Capitalized
      leases for Briggs mining equipment
                                                
                                                $
                                                3,955,000
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -Capitalized
      lease for Kendall equipment
                                                
                                                $
                                                116,100
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -2.
                                                Capitalized
      asset retirement obligation for Briggs leach pad
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                344,400
                                                
                                                
                                                $
                                                -3.
                                                Marketable
      securities received for option payments
                                                
                                                $
                                                196,900
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                171,1004.
                                                Marketable
      securities received for sale of Marg property
                                                
                                                $
                                                192,700
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -5.
                                                Reclassification
      of reclamation bonds to temporaryinvestments
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                135,1006.
                                                Embedded
      derivative fair value
                                                
                                                $
                                                667,200
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -7.
                                                Accrued
      gold bond transaction costs
                                                
                                                $
                                                255,000
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -8.
                                                Depreciation
      and amortization included in deferred capitalized stripping
                                                
                                                $
                                                580,600
                                                
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                -Supplemental
      disclosures on noncash financing activities:1.
                                                Issued
      17,114,200 shares for merger
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                29,821,700
                                                
                                                
                                                $
                                                -2
                                                Issued
      604,300 shares for purchase of mineral property
                                                
                                                $
                                                -
                                                
                                                
                                                $
                                                487,100
                                                
                                                
                                                $
                                                -





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


9


ATNA
RESOURCES LTD.


NOTES
TO THE ANNUAL CONSOLIDATED FINANCIAL STATEMENTS





1.           Nature of operations and
liquidity:





Atna
Resources Ltd. is incorporated in British Columbia and the corporate office is
located in Golden, Colorado. References to “Atna Resources”, “Atna”, and the
“Company”, all mean Atna Resources Ltd. and all of the wholly-owned and
majority-owned subsidiaries of Atna Resources Ltd., or any one or more of them,
as the context requires. Atna was originally organized in 1984 to explore for,
acquire, and develop precious metals.





The
Company is involved in all phases of the mining business from exploration,
development drilling, feasibility studies, permitting, construction, operation
and final closure of mining properties. Atna’s ongoing exploration and
development efforts are focused primarily on precious metals in the Western
United States (“US” or “U.S.”). The Company has conducted a portion of its
mineral exploration and development activities through joint ventures with other
companies.





The
Company’s primary focus for 2010 is to increase the value of its four core gold
properties: Briggs, Pinson, Reward and Columbia. Briggs is located in
southeastern California and commenced gold production in May 2009 due to the
mining of previously stripped ore left over from when the mine was shut down in
2004. Briggs mined gold ore that contained a total of 24,272 ounces during
2009 and produced a total of 11,198ounces of gold in doré,
of which 10,886 ounces were sold at an average gold price of $962 per ounce.
Estimated mined recoverable gold inventory at year end was 8,300 ounces in all
stages of processing.





Atna
expects that basic cash requirements over the next 12 months can be funded
through a combination of existing cash, cash flow from the Briggs operation,
short-term investments, debt, asset sales and, if necessary, equity issuances.
Atna’s 2008 sale of its royalty portfolio provided approximately $20 million of
net proceeds, which was sufficient to re-start and operate the Briggs Mine
without additional financing until October 2009 when Atna closed C$1.5 million
in convertible debentures. In December 2009, the Company closed a $14.5 million
Gold Bond offering. Based on the Company’s current low stock price, the Company
does not expect the exercise of options and warrants to be a significant source
of funds during 2010.





The
Company’s other significant assets include exploration joint venture agreements
with Yamana Gold Inc. on the Clover property and with Golden Predator Mines Inc.
on the Adelaide and Tuscarora properties. The Kendall Mine, located near
Lewistown, Montana, is in the final stage of reclamation and closure activities,
principally relating to a final Environmental Impact Study, top soil placement
and water management.





On March
18, 2008, the Company completed a merger (the “Canyon Merger”) with Canyon
Resources Corporation (“Canyon”). Atna acquired the right to convert all of
Canyon’s issued and outstanding shares of common stock to Atna common shares at
an exchange ratio of 0.32 shares of Atna for each share of Canyon. Atna assumed
the obligations of Canyon’s outstanding warrants and debentures. Canyon is now a
wholly-owned US subsidiary of Atna.





Basis
of presentation





The
Company believes that its cash requirements over the next year can be funded
through a combination of existing cash, cash flows from operations, asset sales,
debt arrangements and equity financing. These consolidated financial statements
do not include any adjustments that might result from the outcome of these
uncertainties. These consolidated financial statements have been prepared
assuming the Company will continue as a going concern or in the normal course of
business.


10


2.           Accounting
policies:




Change
in reporting currency





Effective
July 1, 2009, the Company changed its reporting currency from the Canadian
dollar (“CAD” or “C$”)to
the United States dollar (“USD”
or “US$”). See Note 3 for additional information.





Consolidation
principles





The
Company’s consolidated financial statements include the accounts of Atna and its
significant active wholly-owned subsidiaries: Canyon Resources Corporation; Atna
Resources, Inc.; CR Briggs Corporation; CR Reward Corporation; CR Kendall
Corporation and CR Montana Corporation. All intercompany balances and
transactions have been eliminated in the consolidated financial statements. The
consolidated financial statements are prepared in accordance with Canadian
generally accepted accounting principles (“GAAP”), which differs from US GAAP as
described in Note 22. The consolidated financial statements have been prepared
in United States dollars, except for certain note disclosures that are reported
in Canadian dollars.





Management
estimates and assumptions





Certain
amounts included in or affecting the Company’s consolidated financial statements
and related disclosures must be estimated, requiring that certain assumptions be
made with respect to values or conditions that cannot be made with certainty at
the time the consolidated financial statements are prepared. Therefore, the
reported amounts of the Company’s assets and liabilities, revenues and expenses,
and associated disclosures with respect to contingent assets and obligations are
necessarily affected by these estimates. The Company evaluates these estimates
on an ongoing basis, utilizing historical experience, consultation with experts,
and other methods considered reasonable in the particular circumstances.
Nevertheless, actual results may differ significantly from the Company’s
estimates. The more significant areas requiring the use of management estimates
and assumptions relate to purchase accounting, mineral reserves that are the
basis for future cash flow estimates and units-of-production amortization
determination; determination of deferred stripping costs related to development
operations at the Briggs Mine; completion of technical and feasibility studies,
calculation of gold inventory, recoverability and timing of gold production from
the heap leach process; environmental, reclamation and closure obligations;
asset impairments (including estimates of future cash flows); fair value of
share-based compensation; fair value of financial instruments and nonmonetary
transactions; valuation allowances for future tax assets; future tax
liabilities; contingencies and litigation.





Inventories





Inventory
classifications include stockpiled gold ore, gold-in-process, gold in doré
(finished goods) and materials and supplies inventory. The company’s inventories
except materials and supplies are recorded at the lower of weighted average cost
or market. The stated values of all gold inventories include direct production
costs and applicable overhead and depreciation, depletion and amortization
incurred to bring the gold to its current point in the production cycle. General
and administrative costs for the corporate office are not included in any
inventories.





Stockpiled
ore represents gold ore that has been extracted from the mine and is waiting for
crusher processing. Gold-in-process inventory represents material that is
currently being treated on the leach pad and in the gold processing plant to
extract the contained gold and to transform it into a saleable product. Finished
goods inventory is composed of saleable gold in the form of doré bars that have
been poured and shipped but where title has not passed to the buyer. The bars
are valued at the lower of total cost or net realizable value.


11


Materials
and supplies inventories consist mostly of equipment parts, fuel and lubricants
and reagents consumed in the mining and ore processing activities. Materials and
supplies are valued at the lower of weighted average cost or replacement
cost.





Exploration
expenditures





Exploration
expenditures relate to the costs, including drilling expense, of locating,
defining and evaluating deposits of mineralized material incurred prior to the
establishment of ore reserves. Before classifying mineralized material as proven
and probable ore reserves, the costs of project activities are expensed as
incurred.




Capitalized
development costs





Drilling
and assessment costs incurred to develop proven and probable ore reserves
are classified as development costs and are capitalized as development. Work
required in ore reserve development may include: infill drilling and sampling;
detail geological and geostatistical modeling; and feasibility
study.  The costs of removing barren waste rock at an open pit mining
operation with established reserves prior to the commencement of commercial
production are capitalized as “deferred stripping” development costs. The
production phase of an open pit mine commences when saleable product beyond a de
minimis amount are produced. Deferred stripping costs are amortized using the
unit-of-production (“UOP”) amortization method, based on the estimated tons of
in-place proven and probable ore reserves. Costs incurred to construct tangible
assets are capitalized within property, plant and equipment.





Once
production has begun, stripping costs incurred are variable production costs
recorded as a cost of inventory, which are later recognized as cost of
sales.





During
2009, the Company was successful in reestablishing gold production at the Briggs
Mine. During the first half of 2009, the property was considered to be in the
development stage. Gold production during the second quarter of 2009 was
considered to be de minimis. During the development stage the costs to remove
waste to uncover the initial ore reserves are capitalized as deferred stripping
costs.





Impairment
evaluations





Producingmines
and capital projects are reviewed at least annually for any potential impairment
adjustments. If the sum of the undiscounted cash flows expected to be generated
is less than the carrying amount of the individual asset, an impairment loss is
recognized.





Non-current
liabilities





Long-term
debt instruments are recorded at amortized cost, net of debt issue costs
incurred. Debt issue costs are deferred and amortized using the effective
interest rate method.





Revenue
recognition





The
Company produces gold in doré form and ships the doré to a refinery for further
processing. For a financing fee the Company can sell the gold immediately after
acceptance by the refinery. Revenues are recognized when title and risk of
ownership passes to the buyer which is usually the contractual gold delivery
date.


12


Financial
instruments





Financial
instruments are either recorded at amortized cost or fair value.
Held-to-maturity investments, loans and receivables and other financial
liabilities are measured at amortized cost. Held-for-trading financial assets
and liabilities and available-for-sale financial assets are measured on the
balance sheet at fair value. Derivative financial instruments are classified as
held-for-trading and are recorded on the balance sheet at fair value unless
exempted as a normal purchase and sale arrangement. Changes in fair value of
derivative financial instruments are recorded in earnings unless the instruments
are designated and meet the requirements for accounting treatment as a hedge.
The Company does not designate its derivative contracts as hedges and therefore
does not employ hedge accounting treatment. The Company has determined the
estimated fair values of its financial instruments based on appropriate
valuation methodologies as of the balance sheet date; however, considerable
judgment is required to develop these estimates. Realized gains and losses on
financial instruments are recorded as a component of operating cash
flow.





During
2009, CICA Handbook Section 3862, Financial Instruments – Disclosures (“Section
3862”), was amended to require disclosures about the inputs to fair value
measurements, including their classification within a hierarchy that prioritizes
the inputs to fair value measurement. The three levels of the fair value
hierarchy are:


·
            Level
      1 – Unadjusted quoted prices in active markets for identical assets or
      liabilities;




·
            Level
      2 – Inputs other than quoted prices that are observable for the asset or
      liability either directly or indirectly;
and




·
            Level
      3 – Inputs that are not based on observable market
  data.




The
following table provides a comparison of fair values and carrying values as of
December 31:





2009
                                                
                                                
                                                2008Estimated
                                                
                                                
                                                Carrying
                                                
                                                
                                                Estimated
                                                
                                                
                                                CarryingCategory
                                                
                                                Level
                                                
                                                
                                                Fair
      Value
                                                
                                                
                                                Value
                                                
                                                
                                                Fair
      Value
                                                
                                                
                                                ValueFinancial
      assets:Cash
      and cash equivalents
                                                
                                                Available-for-sale
                                                
                                                n/a
                                                
                                                
                                                
                                                13,060,300
                                                
                                                
                                                
                                                13,060,300
                                                
                                                
                                                
                                                16,707,300
                                                
                                                
                                                
                                                16,707,300Restricted
      cash
                                                
                                                Loans
      and receivable
                                                
                                                1
                                                
                                                
                                                
                                                4,076,100
                                                
                                                
                                                
                                                4,076,100
                                                
                                                
                                                
                                                4,021,500
                                                
                                                
                                                
                                                4,021,500Investments
                                                
                                                Available-for-sale
                                                
                                                1
                                                
                                                
                                                
                                                267,700
                                                
                                                
                                                
                                                267,700
                                                
                                                
                                                
                                                287,200
                                                
                                                
                                                
                                                287,200Total
      financial assets
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                17,404,100
                                                
                                                
                                                
                                                17,404,100
                                                
                                                
                                                
                                                21,016,000
                                                
                                                
                                                
                                                21,016,000Financial
      liabilities:Accounts
      payable and accrued liabilities
                                                
                                                At
      amortized cost
                                                
                                                n/a
                                                
                                                
                                                
                                                2,376,200
                                                
                                                
                                                
                                                2,376,200
                                                
                                                
                                                
                                                2,347,200
                                                
                                                
                                                
                                                2,347,200Derivative
      liabilities
                                                
                                                Held-for-trading
                                                
                                                2
                                                
                                                
                                                
                                                547,600
                                                
                                                
                                                
                                                547,600
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Notes
      payable
                                                
                                                At
      amortized cost
                                                
                                                2
                                                
                                                
                                                
                                                2,158,400
                                                
                                                
                                                
                                                2,158,400
                                                
                                                
                                                
                                                825,000
                                                
                                                
                                                
                                                825,000Gold
      bonds, net of discount
                                                
                                                At
      amortized cost
                                                
                                                2
                                                
                                                
                                                
                                                12,729,400
                                                
                                                
                                                
                                                12,729,400
                                                
                                                
                                                
                                                -
                                                
                                                
                                                
                                                -Capital
      leases
                                                
                                                At
      amortized cost
                                                
                                                n/a
                                                
                                                
                                                
                                                2,979,200
                                                
                                                
                                                
                                                2,979,200
                                                
                                                
                                                
                                                46,400
                                                
                                                
                                                
                                                46,400Total
      financial liabilities
                                                
                                                
                                                
                                                
                                                
                                                
                                                
                                                20,790,800
                                                
                                                
                                                
                                                20,790,800
                                                
                                                
                                                
                                                3,218,600
                                                
                                                
                                                
                                                3,218,600





Risk
management





The
Company is exposed to a number of market risks that are part of its normal
course of business. The Company has a risk management program that includes
senior management and when appropriate the board of directors. Management sets
policies approved by the board to identify and manage market risks affecting the
Company. As a result, the Company incorporates the use of various financial
instruments to manage these risks.





Gold price
risk: The Company’s primary products are gold and to a lesser extent
silver. The value of the Company’s assets, its earnings and its operating cash
flows are significantly impacted by the market price of gold. The price of gold
is influenced by numerous factors beyond the Company’s control, including supply
and demand and world geopolitical events.


13


Management
and the board of directors have set a gold hedge limit of 50 percent of annual
production plus a reserve tail of 25 percent of the life-of-mine production as a
cushion for unforeseen production issues. The Company has entered into gold
derivative contracts to mitigate the impacts of lower gold prices on its
operations. The gold derivative contracts include the purchase of put options
and the sale of call options, which in some cases are structured as a collar and
forward gold sales, including embedded derivatives in the gold bond financial
instrument. The Company fair values its derivative positions and does not employ
hedge accounting.





Foreign exchange
risk: The Company is not significantly impacted by foreign exchange risk.
The Company’s assets, liabilities, revenues and costs are all primarily
denominated in US dollars. Effective July 1, 2009, the Company restated its
financial statements to report its results in US dollars to remove the impact on
its reporting of fluctuations in the US dollar and Canadian dollar exchange
rate.





Counterparty
credit risk: The Company’s sales of gold to third parties expose the
Company to the credit risk of nonpayment by the counterparty. The Company
manages the counterparty credit risk by monitoring the credit worthiness of our
customer.  The Company sells all of its gold to one counterparty, but
at any one time the level of receivable is usually less than two percent of the
Company’s total revenues. All of the Company’s financial assets are held in
large highly rated US or Canadian financial institutions that the Company
believes have an acceptable level of counterparty risk. As of December 31, 2009
there were no significant concentrations of counterparty credit risk and no
amounts were held as collateral.





Liquidity
risk: Liquidity risk represents the risk that the Company cannot fund its
current operations. The Company’s goal is to maintain sufficient liquidity to
fund current operations for the next year after taking into account its current
cash and short-term investment balances and cash flows from operations and
potential asset sales. The Company believes that its current liquidity position
is sufficient to fund the Company’s operations for the foreseeable
future.





Asset
retirement obligations





In
accordance with the requirements of CICA Handbook Section 3110, Asset Retirement
Obligations, environmental reclamation and closure liabilities are recognized at
the time of environmental disturbance in amounts equal to the discounted value
of expected future reclamation and closure costs. The estimated future cash
costs of such liabilities are based primarily upon environmental and regulatory
requirements of the various jurisdictions in which we operate. Cash expenditures
for environmental remediation and closure are charged as incurred against the
accrual.





Stock
based compensation





Under the
company’s common share option program (see Note 19), common share options may be
granted to executives, employees, consultants and non-employee directors.
Compensation expense for such grants is recorded in the Consolidated Statements
of Operations, with a corresponding increase recorded in the Contributed Surplus
account in the Consolidated Balance Sheet.





The
expense is based on the fair values of the option at the time of grant and is
recognized over the estimated vesting periods of the respective options.
Consideration paid to the Company upon exercise of options is credited to
share capital.


14


Income
Taxes





Income
taxes comprise the provision for (or recovery of) taxes actually paid or payable
and for future taxes. Future income taxes are computed using the asset and
liability method whereby future income tax assets and liabilities are recognized
for the expected future tax consequences attributable to temporary differences
between the tax basis of assets and liabilities and their reported amounts in
the financial statements. Future income tax assets and liabilities are computed
using income tax rates in effect when the temporary differences are expected to
reverse. The effect on the future tax assets and liabilities of a change in tax
rates is recognized in the period of substantive enactment. The provision for or
the recovery of future taxes is based on the changes in future tax assets and
liabilities during the period. In estimating future income tax assets, a
valuation allowance is provided to reduce the future tax assets to amounts that
are more likely than not to be realized.





Foreign
currency translation





The
Company operates primarily in the US and to a lesser extent in Canada. Effective
July 1, 2009 the reporting currency of the consolidated entity changed from the
CAD to the USD. The functional currency of the Company’s US subsidiaries is the
USD and the functional currency of Atna Resources Ltd. is the CAD.





Effective
July 1, 2009, the US subsidiaries are no longer translated to CADs because their
functional currency is the USD, the same as the reporting currency. All prior
reporting periods have been restated to reflect the change to USD
reporting.





Merger
with Canyon





The March
2008 merger with Canyon was accounted for as a business combination under the
purchase method of accounting. There were no outstanding contingencies related
to the allocation of the initial purchase price.





The
calculation in USDs of the purchase price and the allocation of the purchase
price are summarized in the following table:




Purchase price as of March 18,
      2008:Canyon
      common shares
                            
                            $
                            28,080,100Estimated
      Atna transaction costs
                            
                            
                            1,472,300Severance
      payments
                            
                            
                            142,400Estimated
      fair value of options, warrants and debentures issued
                            
                            
                            1,533,800$
                            31,228,600Purchase price allocation:Cash
      and cash equivalents
                            
                            $
                            867,600Accounts
      receivable
                            
                            
                            4,500Metal
      inventories
                            
                            
                            151,300Prepaid
      insurance
                            
                            
                            56,800Other
      current assets
                            
                            
                            100,400Property,
      plant, mine development, and mineral interests net
                            
                            
                            34,297,800Restricted
      cash
                            
                            
                            3,676,300Other
      noncurrent assets
                            
                            
                            22,000Accounts
      payable
                            
                            
                            (443,500
                            )Short
      term asset retirement obligations
                            
                            
                            (1,002,100
                            )Payroll
      liabilities
                            
                            
                            (197,100
                            )Legal
      settlement accrual
                            
                            
                            (206,200
                            )Other
      current liabilities
                            
                            
                            (35,000
                            )Notes
      payable - long term
                            
                            
                            (825,000
                            )Capital
      leases - long term
                            
                            
                            (29,400
                            )Asset
      retirement obligations - long term
                            
                            
                            (3,161,900
                            )Future
      income taxes - long term
                            
                            
                            (2,047,900
                            )$
                            31,228,600


15


3.           Changes in accounting
policies:





Change
in reporting currency





Effective
July 1, 2009, the Company changed its reporting currency from the CAD to the
USD. The Company believes that USD reporting provides better information
regarding the Company’s results of operations and related business activities.
USD reporting is expected to improve investors’ ability to compare the Company’s
financial results with other publicly traded companies in the mining industry
whose primary assets are located in the United States. Prior to July 1, 2009,
the Company reported its annual and quarterly consolidated balance sheets and
the related consolidated statements of operations and cash flows in CADs. In
making this change in reporting currency, the Company followed the guidance of
the Emerging Issues Committee (EIC) of the Canadian Institute of Chartered
Accountants (CICA), as described in EIC-130, Translation Method when the
Reporting Currency Differs from the Measurement Currency or there is a Change in
the Reporting Currency.





Based on
EIC-130, the financial statements for all years and periods presented have been
translated into the new reporting currency using the current rate method. Under
this method, the statement of operations and cash flow statement items for each
year and period have been translated into the reporting currency using the
average exchange rates prevailing during each reporting period. All assets and
liabilities have been translated using the exchange rate prevailing at the
consolidated balance sheet dates. Shareholders’ equity transactions since
January 1, 2007 have been translated using the rates of exchange in effect as of
the dates of the various capital transactions, whereas shareholders’ equity
balances on January 1, 2007 have been translated at the exchange rate on that
date. All resulting exchange differences arising from the translation are
included as a separate component of other comprehensive income. All comparative
financial information has been restated to reflect the Company’s results as if
they had been historically reported in USDs.





The
following table shows the effect of the change in reporting currency to USD on
previously reported amounts:





2008
                    
                    
                    2007USD
                    
                    
                    CAD
                    
                    
                    USD
                    
                    
                    CADTotal
      assets
                    
                    $
                    67,411,600
                    
                    
                    $
                    82,082,200
                    
                    
                    $
                    13,558,400
                    
                    
                    $
                    13,487,700Total
      liabilities
                    
                    $
                    8,137,000
                    
                    
                    $
                    9,912,900
                    
                    
                    $
                    1,095,100
                    
                    
                    $
                    1,075,500Shareholders'
      Equity
                    
                    $
                    59,274,600
                    
                    
                    $
                    72,169,300
                    
                    
                    $
                    12,463,300
                    
                    
                    $
                    12,412,200Net
      income (loss)
                    
                    $
                    15,805,000
                    
                    
                    $
                    20,315,600
                    
                    
                    $
                    (3,116,400
                    )
                    
                    $
                    (3,348,300
                    )Income
      (loss) per share
                    
                    $
                    0.20
                    
                    
                    $
                    0.26
                    
                    
                    $
                    (0.05
                    )
                    
                    $
                    (0.05
                    )





Mineral
property - exploration costs





Effective
January 1, 2008, the Company changed its accounting policy for mineral
properties from deferring exploration costs incurred during the exploration
stage to expensing such costs in the year incurred. This change has been applied
retroactively and the comparative figures in the consolidated financial
statements have been restated. The effect of this change on the restated
consolidated balance sheet as of December 31, 2007, is to decrease mineral
properties and increase accumulated deficit by $13.6 million. The effect of this
change on the restated consolidated statements of operations for year ended
December 30, 2007, is to decrease exploration expenses and net loss by $1.8
million and the restated net loss per share decreased by $0.03.


16


International
Financial Reporting Standards





In
February 2008, the CICA confirmed that International Financial Reporting
Standards ("IFRS") will be mandatory in Canada for all publicly accountable
entities for fiscal periods beginning on or after January 1, 2011. The Company
is analyzing the impact of IFRS on its consolidated financial statements and
anticipates that there will be changes in accounting policies that may
materially affect the Company’s accounting policies. Management has completed a
project plan that identified differences in accounting policies and has begun
the key steps required to ensure a successful transition to IFRS.





4.           Investments
available-for-sale:





Investments
available-for-sale are recorded at fair value at each reporting period. Changes
in fair value are recorded in equity as other comprehensive income or loss and
purchases and sales are reported as investing activities in cash flows. As of
December 31, 2009 and 2008, the fair values of the investments were $0.3 million
in both periods. The change in fair value for the years ended December 31, 2009
and 2008 was a gain of $0.2 million and a loss of $0.2 million,
respectively.





5.           Gold
inventories:





As of
December 31, 2009, gold inventories of $6.9 million related to $0.6 million in
the ore stockpile, $5.4 million in the leach pad, and $0.9 million in the
process plant. As of December 31, 2008, gold inventories were less than $0.1
million. The total cost of inventories recognized as expense in cost of goods
sold for the year ending 2009 was $9.1 million. Gold inventories are carried at
the lower of cost or net realizable value less estimated costs of completion,
and this calculation is performed at the end of every fiscal quarter. The
Company recorded $0.1 million in gold inventory write downs included in cost of
goods sold during the year ended December 31, 2009. The write-downs were related
primarily to higher costs exceeding current market prices during the early
start-up period. The Company uses the weighted average cost method to value
inventories.





6.           Property, plant, mine
development, and mineral interests, net:





As of December 31, 2009Depreciation
                      
                      Asset Value
                      
                      
                      Accumulated
                      
                      
                      Net BookMethod
                      
                      at Cost
                      
                      
                      Depreciation
                      
                      
                      ValueBuildings
      and equipment
                      
                      1 - 5 Years SL
                      
                      $
                      19,914,700
                      
                      
                      $
                      2,937,400
                      
                      
                      $
                      16,977,300Mine
      development
                      
                      UOP
                      
                      
                      4,277,600
                      
                      
                      
                      317,100
                      
                      
                      
                      3,960,500Deferred
      stripping
                      
                      UOP
                      
                      
                      3,947,400
                      
                      
                      
                      297,400
                      
                      
                      
                      3,650,000Mineral
      interest
                      
                      UOP
                      
                      
                      28,338,600
                      
                      
                      
                      431,800
                      
                      
                      
                      27,906,800Asset
      retirement cost
                      
                      UOP
                      
                      
                      543,600
                      
                      
                      
                      -
                      
                      
                      
                      543,600$
                      57,021,900
                      
                      
                      $
                      3,983,700
                      
                      
                      $
                      53,038,200





As of December 31, 2008Depreciation
                      
                      Asset Value
                      
                      
                      Accumulated
                      
                      
                      Net BookMethod
                      
                      at Cost
                      
                      
                      Depreciation
                      
                      
                      ValueBuildings
      and equipment
                      
                      1 -
      5 Years SL
                      
                      $
                      5,248,100
                      
                      
                      $
                      430,000
                      
                      
                      $
                      4,818,100Mine
      development
                      
                      UOP
                      
                      
                      10,142,800
                      
                      
                      
                      -
                      
                      
                      
                      10,142,800Mineral
      interest
                      
                      UOP
                      
                      
                      28,371,900
                      
                      
                      
                      -
                      
                      
                      
                      28,371,900Asset
      retirement cost
                      
                      UOP
                      
                      
                      543,600
                      
                      
                      
                      -
                      
                      
                      
                      543,600$
                      44,306,400
                      
                      
                      $
                      430,000
                      
                      
                      $
                      43,876,400


17


The
increase in buildings and equipment from year end was due primarily to an
increase in mining equipment related to the Briggs Mine. A transfer from the
mine development category to the buildings and equipment category also occurred
when the assets were placed in service during the first quarter. Amortization of
buildings and equipment, mine development, and mineral interest commenced at the
beginning of the third quarter 2009 when the mine entered the production
phase.





A
rollforward of property, plant, mine development, and mineral interests, net, as
of December 31, 2009 is as follows:





Briggs (a)
                      
                      
                      Reward (b)
                      
                      
                      Columbia (c)Beginning
      balance, January 1, 2009
                      
                      $
                      20,665,300
                      
                      
                      $
                      8,468,300
                      
                      
                      $
                      9,031,400Acquisition/development
      capitalized
                      
                      
                      12,722,500
                      
                      
                      
                      158,000
                      
                      
                      
                      -Depreciation
      and Amortization
                      
                      
                      (3,411,700
                      )
                      
                      
                      -
                      
                      
                      
                      -Dispositions
                      
                      
                      (91,800
                      )
                      
                      
                      -
                      
                      
                      
                      -Effect
      of foreign rate change
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      -Net
      change in the period
                      
                      
                      9,219,000
                      
                      
                      
                      158,000
                      
                      
                      
                      -Ending
      balance, December 31, 2009
                      
                      $
                      29,884,300
                      
                      
                      $
                      8,626,300
                      
                      
                      $
                      9,031,400





Pinson (d)
                    
                    
                    Other (e)
                    
                    
                    TotalBeginning
      balance, January 1, 2009
                    
                    $
                    481,500
                    
                    
                    $
                    5,229,900
                    
                    
                    $
                    43,876,400Acquisition/development
      capitalized
                    
                    
                    -
                    
                    
                    
                    133,600
                    
                    
                    
                    13,014,100Depreciation
      and Amortization
                    
                    
                    (68,800
                    )
                    
                    
                    (88,800
                    )
                    
                    
                    (3,569,300
                    )Dispositions
                    
                    
                    -
                    
                    
                    
                    (196,900
                    )
                    
                    
                    (288,700
                    )Effect
      of foreign rate change
                    
                    
                    -
                    
                    
                    
                    5,700
                    
                    
                    
                    5,700Net
      change in the period
                    
                    
                    (68,800
                    )
                    
                    
                    (146,400
                    )
                    
                    
                    9,161,800Ending
      balance, December 31, 2009
                    
                    $
                    412,700
                    
                    
                    $
                    5,083,500
                    
                    
                    $
                    53,038,200





(a)
            Briggs Mine,
      California:





Atna
acquired the Briggs Mine in the Canyon Merger and initially allocated a value of
$12.4 million in purchase accounting. Canyon acquired the Briggs Mine in 1990,
which is located on the west side of the Panamint Range near Death Valley,
California. CR Briggs Corporation is a wholly-owned subsidiary of Canyon, which
is wholly-owned by Atna. The Company owns or controls 100 percent of the Briggs
Mine. In addition to the Briggs Mine, there are four satellite properties
located approximately four miles north of Briggs. These satellite properties are
known as the Cecil R, Jackson, Mineral Hill and Suitcase.





(b)
            Reward Project,
      Nevada:





Atna
acquired the Reward Project in the Canyon Merger and initially allocated a value
of $8.3 million in purchase accounting. The property is located in Nye County
about 5.5 miles south-southeast of Beatty, Nevada. Most of the property is
subject to a three percent NSR royalty. The Reward Mine has received all major
permits required to initiate development activities. Phase 1 development work
has commenced at Reward.


18


(c)
            Columbia Property,
      Montana:





Atna
acquired the Columbia gold property in the Canyon Merger and initially allocated
a value of $8.0 million in purchase accounting. Columbia is located seven miles
east of Lincoln and 45 miles northwest of Helena, in Lewis and Clark County,
Montana. The patented claims acquired by the Company in the merger are subject
to NSR royalties that range from zero percent up to 6 percent.





In June
2008, the Company acquired certain additional claims at Columbia in order to
consolidate the land package containing the known body of mineralization. The
acquisition cost for the claims totaled $1.0 million and consisted of an equal
amount of cash and common shares of Atna. The Seller retained a four percent net
smelter return royalty on the claims purchased.





(d)
            Pinson Property,
      Nevada:





The
Pinson Property is a joint venture property with Pinson Mining Company. The
Company has a 30 percent interest, and the property is subject to royalties that
vary from 3.5 percent to 7.5 percent. The carrying value represents the
amortized cost of various buildings and equipment.





(e)
            Other
      Properties:





Clover Property, Nevada:The
Clover property has a capitalized balance of $0.1 million. In an agreement dated
March 11, 2003, the Company obtained an option to acquire a 100 percent interest
in 22 claims known as the Clover property. The claims are subject to a 3 percent
NSR royalty, which can be purchased for $1.0 million per percentage point. Terms
of the agreement include cumulative total payments to the vendor of $0.3 million
all of which has been paid as of March 2010. The Clover property is subject to a
finder’s fee capped at $0.5 million of which $0.1 million has been paid with
annual payments of $30,000.





On
November 28, 2006, the Company signed an Earn-in Agreement with Meridian Gold
Incorporated, now a subsidiary of Yamana Gold Inc. (“Yamana”) whereby Yamana can
earn a 51 percent working interest in the Clover property. Yamana may elect to
increase its interest to 70 percent by completing a prefeasibility study within
30 months of vesting its initial 51 percent interest in the project. To earn 51
percent Yamana must make payments totaling $0.6 million to the Company and
complete exploration work totaling $3.3 million over a 4 year period unless
extended by mutual agreement. Atna received a payment of $150,000 in January
2009 and the final payment of $250,000 was paid in February 2010. Exploration
work commitments remaining under the agreement amount to approximately $2.0
million.





Mineral Rights, Montana: Atna
acquired a package of approximately 900,000 acres of widely distributed fee
mineral rights in the state of Montana in the Canyon Merger. These mineral
rights were initially allocated a value of $2.5 million in purchase
accounting.





Adelaide and Tuscarora Properties,
Nevada: Atna acquired these mineral exploration properties in the Canyon
Merger. The properties were initially allocated a value of $1.0 million in
purchase accounting.  Refer to Note 13 (e) for more information on
these properties.





Judith Gold Lands, Montana:
Atna acquired approximately 1,100 acres of fee simple lands in connection with
the Kendall Mine in the state of Montana in the Canyon Merger. This land was
originally valued at $1.0 million in purchase accounting.





Uranium  Joint Ventures,
Wyoming: Effective February 2, 2009, Atna’s subsidiary, Canyon, entered
into an Agreement with New Horizon Uranium Corporation (“New Horizon”)
(TSXV:NHU) to terminate the Converse Uranium Project Exploration, Development
and Mine Operating Agreement dated January 23, 2006. New Horizon failed to meet
the spending and work requirements to earn a participating interest in the
project. As part of this Agreement, all of the shares of Horizon Wyoming Uranium
Inc. (“Horizon Wyoming”) have been transferred to Canyon and Horizon Wyoming
became a wholly owned subsidiary. Horizon Wyoming holds properties, reclamation
bonds and permits related to the Sand Creek joint venture with Uranium One
Exploration USA Inc. a subsidiary of Uranium One Inc. (TSX:UUU). In addition,
New Horizon resigned as manager and Horizon Wyoming in the new manager of the
Sand Creek joint venture.


19




In June
2009, the Company entered into a Supplemental Agreement to the Sand Creek
Uranium Project Exploration, Development and Mine Operating Agreement. Under
this Supplemental Agreement, Uranium One assumed the role of project manager and
may spend up to $1.6 million before December 31, 2012 to increase its interest
in the project from 30 percent to 51 percent.  During 2009, Uranium
One spent $0.36 million on exploration activities at Sand Creek. Ownership of
the Sand Creek Uranium Joint Venture  is now 67.4 percent Atna,
through Horizon Wyoming, and 32.6 percent Uranium One Exploration USA
Inc.





The
uranium joint ventures were initially allocated $1.0 million in purchase
accounting. The failure of New Horizon to earn an interest in the Converse Joint
Venture did not result in an impairment of these properties.





Ecstall Property, British
Columbia: The Company has a 100 percent interest in 23 Crown Mineral
claims, subject to a 3 percent NSR royalty. Ecstall is a low grade mineralized
non NI43-101 compliant historic mineral resource property located in a remote
area of British Columbia. In the fourth quarter of 2008, the property was
written-down to the estimated fair value of the surface
rights.





7.           Restricted
cash:





Restricted
cash consisted of the following at December 31:





2009
                  
                  
                  2008Kendall
      reclamation property (a)
                  
                  $
                  2,328,900
                  
                  
                  $
                  2,482,700Briggs
      Mine (b)
                  
                  
                  1,638,500
                  
                  
                  
                  1,379,600Columbia
      property (c)
                  
                  
                  64,600
                  
                  
                  
                  64,600Reward
      Project (d)
                  
                  
                  33,700
                  
                  
                  
                  33,700Other
      properties
                  
                  
                  10,400
                  
                  
                  
                  60,900Total
      restricted cash - Non-current
                  
                  $
                  4,076,100
                  
                  
                  $
                  4,021,500





(a) Held
directly by the Montana Department of Environmental Quality
(“DEQ”).





(b) Held
in bank accounts benefiting the surety and cash on deposit with Inyo County,
California.





(c) Held
directly by the Montana DEQ for reclamation of exploration
activities.





(d) Held
by the US Bureau of Land Management (“BLM”) for environmental reclamation
regarding exploration activities.





8.           Financial
instruments:





Cash and cash
equivalents, receivables and restricted cash: Carrying amounts
approximate fair value based on the short-term maturity of those instruments.
Cash equivalents are those instruments that have original maturities of 90 days
or less.


20





Non-current
liabilities: See Notes 9, 10, 11 and 12 for details on non-current
liabilities.





Derivatives:
As of December 31, 2009 the Company has the following gold derivatives
outstanding:





US$
                      
                      
                      Expiry Date
                      
                      
                      
                      
                      
                      US$Derivative Contracts
                      
                      Strike Price
                      
                      
                      2010
                      
                      
                      2011
                      
                      
                      Thereafter
                      
                      
                      Total
                      
                      
                      Fair ValueGold
      Bond Forwards - Ozs
                        Embedded
      derivative (Note 12)
                      
                      $
                      1,113
                      
                      
                      
                      3,257
                      
                      
                      
                      3,257
                      
                      
                      
                      6,514
                      
                      
                      
                      13,028
                      
                      
                      $
                      (88,900
                      )Forward
      Gold Sales - Ozs
                      
                      $
                      955
                      
                      
                      
                      100
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      100
                      
                      
                      $
                      (13,300
                      )Owned
      Put Options - Ozs
                      
                      $
                      800
                      
                      
                      
                      6,000
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      6,000
                      
                      
                      $
                      23,600Sold Call Options - Ozs
                      
                      $
                      1,100
                      
                      
                      
                      6,000
                      
                      
                      
                      -
                      
                      
                      
                      -
                      
                      
                      
                      6,000
                      
                      
                      $
                      (469,000
                      )$
                      (547,600
                      )





The
Company has recorded a $0.5 million liability on its open derivative positions
as of December 31, 2009. During the year ended December 31, 2009, there was $0.1
million of unrealized gain on gold derivatives instruments recorded in the
consolidated statements of operations, which consisted of a $0.6 million
unrealized gain on the gold bonds forwards (embedded derivative) and the above
fair values for the other derivatives contracts which amounted to an
unrecognized loss of $0.5 million. There was no derivatives outstanding or
derivative activity as of December 31, 2008 or 2007 or the years then
ended.





The
December 31, 2009 fair values of the outstanding derivatives were determined
using the following weighted average assumptions:





US$
                    
                    
                    Expected
                    
                    
                    Risk-Free
                    
                    
                    Remaining
                    
                    
                    ForwardHedging Contract
                    
                    Strike Price
                    
                    
                    Volatility
                    
                    
                    Rate
                    
                    
                    Life (Years)
                    
                    
                    RateGold
      bond forwards
                      Embedded
      derivative (Note 12)
                    
                    $
                    1,113
                    
                    
                    na
                    
                    
                    na
                    
                    
                    
                    2.0
                    
                    
                    
                    1.6
                    %Forward
      gold sales
                    
                    $
                    955
                    
                    
                    na
                    
                    
                    na
                    
                    
                    
                    0.1
                    
                    
                    nilOwned
      put options
                    
                    $
                    800
                    
                    
                    
                    26
                    %
                    
                    
                    0.2
                    %
                    
                    
                    0.5
                    
                    
                    naSold
      call options
                    
                    $
                    1,100
                    
                    
                    
                    27
                    %
                    
                    
                    0.2
                    %
                    
                    
                    0.5
                    
                    
                    naGold
      Price - end of period
                    
                    $
                    1,088





During
2009, the Company established several gold hedging positions. The open positions
consist of a gold collar that will expire in 2010 and gold participating bonds
(“Gold Bonds”) that are payable by delivering a total of 13,028 ounces of gold
over a four year period expiring December 31, 2013. The purpose of these hedge
positions is to limit exposure to gold price fluctuations during 2010 and
beyond. The collars consist of an equal number of put and call option contracts
with similar expiry dates. The put and call option contracts are European style
options that are settled net at the expiry date. The outstanding options have
expiry dates from January to December 2010 at the rate of 500 ounces per month.
The outstanding call option related to the Gold Bonds expires quarterly from
March 31, 2010 to December 31, 2013 at a rate of 814 ounces per quarter. All
option style derivatives use the Black Scholes option valuation method. The
Company believes that these outstanding contracts will be settled in the normal
course of business. The Company’s policy is to not hedge more than 50 percent of
the projected production and retain a 25 percent production reserve tail. At
December 31, 2009, the hedge position covers approximately 25 percent of
projected 2010 production at the Briggs Mine.


21





Under the
terms of the option contracts, Atna will pay the counterparty on the contract
expiry date if the gold price is above the sold call option strike price of
$1,100 per ounce and the counterparty will pay the Company on the contract
expiry date if the gold price is below the owned put option strike price of $800
per ounce. If the gold price on the contract expiry date falls between the put
strike price of $800 and the call strike price of $1,100 per ounce there are no
settlement payments required by either party.





Under the
terms of the gold bond forwards (embedded derivative contracts) in the Gold
Bonds agreement, Atna will deliver the value of 814 ounces of gold each quarter
on the contractual delivery date, which will be used to purchase shares of a
gold exchange traded fund (“ETF”) for each bond holders account and 6.25 percent
of the original face value of the Gold Bonds will be redeemed. The fair value of
the gold bond forwards are determined observable market inputs of similar
contracts and discounted using the Company’s market interest rate of 12
percent.





The fair
market value in the table above was estimated based on the gold price per ounce
from the London PM Fix on December 31, 2009 of $1,088. The net fair value of the
hedge position will be positive to the Company when gold prices fall and will be
negative when gold prices rise relative to the gold price on the date of the
previous fair value calculation.





9.           Asset retirement
obligations:




At the
end of each period, Asset Retirement Obligations (“ARO”) are equal to the
present value of all estimated future costs required to remediate any
environmental disturbances that exist as of the end of the period, using
discount rates applicable at the time of initial recognition of each component
of the liability.  Included in this liability are the costs of
closure, reclamation, demolition, and stabilization of the mines, processing
plants, infrastructure, tailing ponds, waste dumps, and ongoing post-closure
environmental monitoring costs.  While the majority of these costs
will be incurred near the end of the mines’ lives, it is expected that certain
ongoing reclamation costs will be incurred prior to mine
closure.  These costs are recorded against the asset retirement
obligation liability as incurred. The liability recognized in 2009 was
discounted using the Company’s credit adjusted risk free rate of 13
percent.  Amounts recorded in prior years were discounted at rates
ranging from 8 percent to 11 percent.  The schedule of payments to
settle the ARO liability will occur over the life of the operating assets, which
currently runs through 2021.


22


The
following provides an analysis of the carrying values for its asset retirement
obligations as of December 31, 2009:





2009
                        
                        
                        2008Beginning
      balance
                        
                        $
                        4,918,400
                        
                        
                        $
                        386,700Additions
      as a result of merger with Canyon
                        
                        
                        -
                        
                        
                        
                        4,164,000Settlements
                        
                        
                        (527,300
                        )
                        
                        
                        (1,619,200
                        )Accretion
      expense
                        
                        
                        450,000
                        
                        
                        
                        350,800Change
      in estimate
                        
                        
                        137,300
                        
                        
                        
                        1,712,300Effect
      of exchange rate on activity
                        
                        
                        50,700
                        
                        
                        
                        (76,200
                        )Ending
      balance
                        
                        
                        5,029,100
                        
                        
                        
                        4,918,400Less:
      asset retirement obligations - current
                        
                        
                        938,900
                        
                        
                        
                        618,400Asset
      retirement obligations - non-current
                        
                        $
                        4,090,200
                        
                        
                        $
                        4,300,000Anticipated spending per year
      (undiscounted):2010
                        
                        
                        
                        
                        
                        $
                        938,9002011
                        
                        
                        
                        
                        
                        
                        1,269,7002012
                        
                        
                        
                        
                        
                        
                        1,164,8002013
                        
                        
                        
                        
                        
                        
                        38,1002014
                        
                        
                        
                        
                        
                        
                        1,501,300Thereafter
                        
                        
                        
                        
                        
                        
                        2,032,700Total
                        
                        
                        
                        
                        
                        $
                        6,945,500Asset Retirement Obligations Capitalized by
      Property:Briggs
      Mine
                        
                        
                        
                        
                        
                        $
                        522,100Reward
      Project
                        
                        
                        
                        
                        
                        
                        21,500Total
                        
                        
                        
                        
                        
                        $
                        543,600Summary of Asset Retirement Obligations by
      Property:Kendall
      Mine
                        
                        
                        
                        
                        
                        $
                        2,722,800Briggs
      Mine
                        
                        
                        
                        
                        
                        
                        1,873,700Pinson
      Project
                        
                        
                        
                        
                        
                        
                        297,500Jarbidge
      and Beowawe Properties
                        
                        
                        
                        
                        
                        
                        63,800Columbia
      Project
                        
                        
                        
                        
                        
                        
                        40,800Reward
      Project
                        
                        
                        
                        
                        
                        
                        30,500Total
                        
                        
                        
                        
                        
                        $
                        5,029,100





At the
Kendall Mine reclamation project the asset retirement obligation of $2.7 million
is based on the estimated costs for capping and seeding; construction and
maintenance of water treatment system and costs to maintain property during
reclamation period. At the Briggs Mine the asset retirement obligation of $1.9
million is based on the estimated costs for contouring, seeding and fertilizing
of waste dumps; facility dismantling; contouring and seeding of leach pads;
water management; and plant site. The remaining asset retirement obligations
relate to the estimated costs to reclaim exploration drilling
activities.


23





10.        Notes
payable:





The
following provides a rollforward of notes payable as of December 31,
2009:





Beginning
      balance
                
                $
                825,000Issuances
      of debentures
                
                
                1,273,800Issuances
      of notes
                
                
                22,700Principal
      payments
                
                
                (3,400
                )Effective
      exchange rate on activity
                
                
                40,300Ending
      balance
                
                
                2,158,400Less:
      notes payable - current
                
                
                1,321,200Notes
      payable - non-current
                
                $
                837,200





On
September 18, 2009, the Company closed a non-brokered private placement for
C$1.5 million of secured debentures. The collateralized (by the assets of the
Company) debentures require interest payments at the rate of 12 percent per
year, and the holders have the right to convert principal to common shares of
the Company, subject to adjustments for share splits, reverse splits, and
changes of control, at any time at a conversion rate of C$0.76 per common share.
The debentures are callable by the Company after 6 months and the debentures
expire on September 18, 2010. The debenture was recorded as a current liability
in the amount of C$1.4 million and as equity of C$0.1 million based on the
residual method of accounting for the conversion feature.





The
beginning balance consisted of uncollateralized debentures that require
quarterly interest payments at the rate of six percent per year, and the holders
have the right to convert principal to common shares of the Company, subject to
adjustments for share splits, reverse splits, and changes of control, at any
time at a conversion rate of $4.31 per common share based on a balance of
$825,000 as of December 31, 2009. The balance is due in March 2011.





Interest
expense on notes payable was approximately $0.1 million and for the years ended
period December 31, 2009 and 2008, none of which was
capitalized.


24




11.        Capital
leases:





The
following provides a rollforward of capital leases as of December 31,
2009:





Beginning
      balance
                
                $
                46,400New
      leases
                
                
                4,071,100Lease
      returns
                
                
                (25,600
                )Payments
      applied to principal
                
                
                (1,112,700
                )Ending
      balance
                
                
                2,979,200Less:
      capital leases - current
                
                
                1,623,600Capital
      leases - non-current
                
                $
                1,355,600





The cost
of leased assets was $4.1 million and less than $0.1 million as of December 31,
2009 and 2008. Depreciation expense was $0.4 million, less than $0.1 million and
less than $0.1 million for the years ended December 31, 2009, 2008 and 2007.
Accumulated depreciation of leased assets was $0.4 million and less than $0.1
million as of December 31, 2009 and 2008. Interest expense for the years ended
December 31, 2009, 2008 and 2007 was $0.2 million, less than $0.1 million and
less than $0.1 million, respectively. Minimum future lease payments over the
next five years and thereafter are $1.6 million, $0.9 million, $0.4 million,
$0.1 million, nil million and nil million. Interest rates on leased assets
ranged from six to nine percent.





12.        Gold
bonds:





The
following provides a rollforward of the gold bonds and related discounts as of
December 31, 2009:





DiscountTransaction
                
                
                EmbeddedGold Bonds
                
                
                Costs
                
                
                Derivative
                
                
                TotalBeginning
      balance
                
                $
                -
                
                
                $
                -
                
                
                $
                -
                
                
                $
                -Issuances
                
                
                14,500,000
                
                
                
                (1,154,400
                )
                
                
                (667,200
                )
                
                
                12,678,400Payments
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                -Amortization
                
                
                -
                
                
                
                32,300
                
                
                
                18,700
                
                
                
                51,000Ending
      balance
                
                
                14,500,000
                
                
                
                (1,122,100
                )
                
                
                (648,500
                )
                
                
                12,729,400Less:
      gold bonds - current
                
                
                
                
                
                
                
                
                
                
                
                
                
                
                2,872,000Gold
      bonds - non-current
                
                
                
                
                
                
                
                
                
                
                
                
                
                $
                9,857,400





On
December 9, 2009, the Company closed a private placement of $14.5 million of
gold bonds. The gold bonds, which will mature on December 31, 2013, and have an
interest rate of 10 percent per annum on the declining balance. The gold bonds
will be redeemed in sixteen quarterly installments equivalent to the market
value of approximately 814 ounces of gold per quarter based on a closing gold
price approximately ten trading days prior to the end of each quarter paid in
cash. The gold bond agreement limits the Company’s hedge position to 50 percent
of the future estimated consolidated gold production.


25





The
Company recorded an initial discount on the gold bonds of $1.8 million. The
discount was comprised of $1.2 million of transaction costs associated with the
gold bonds and the $0.7 million initial fair value of the embedded derivative.
The discount is amortized using the effective interest method and was $0.1
million during 2009.





The
embedded derivative is the result of the gold bonds being amortized by the
Company delivering 13,028 ounces of gold over 16 equal quarterly payments. The
fair value of the embedded derivative fluctuates with changes in the price of
gold and changes in the forward price of gold. The initial fair value of the
embedded derivative was discounted at the Company’s assumed borrowing rate of 12
Percent. The change in fair value of the embedded derivative from the date of
closing to December 31, 2009 resulted in a gain of $0.6 million, which was
recorded in the consolidated statements of operations in unrealized (loss) gain
on derivatives.





Total
interest expense recorded related to the gold bonds was $0.1 million for the
year ended December 31, 2009, none of which was capitalized. Future debt
payments will be $3.6 million, $3.6 million, $3.6 million and $3.6 million for
the years ended December 31, 2010, 2011, 2012, and 2013.





13.        Income
taxes:





The
Company recognizes future tax assets and liabilities for each tax jurisdiction
based on the difference between the financial reporting and tax bases of assets
and liabilities using the enacted tax rates expected to be in effect when the
taxes are paid or recovered.  The Company provides a valuation
allowance against future tax assets for which the Company does not consider
realization of such assets to meet the required “more likely than not”
standard.


26


The
components of future tax assets and liabilities as of December 31:




2009
                          
                          
                          2008Future tax assets:Noncapital
      loss carryfowards, Canada
                          
                          $
                          104,600
                          
                          
                          $
                          74,500Net
      operating loss carryforwards, US
                          
                          
                          41,609,600
                          
                          
                          
                          41,353,800Capital
      loss carryforwards, Canada
                          
                          
                          215,400
                          
                          
                          
                          214,200Mineral
      properties
                          
                          
                          5,948,600
                          
                          
                          
                          5,253,300Reclamation
      costs
                          
                          
                          1,800,400
                          
                          
                          
                          1,777,300Derivatives
                          
                          
                          211,200
                          
                          
                          
                          -Share
      issuance costs
                          
                          
                          72,000
                          
                          
                          
                          167,800Marketable
      equity securities
                          
                          
                          79,800
                          
                          
                          
                          71,300Capital
      assets
                          
                          
                          -
                          
                          
                          
                          29,700Other
                          
                          
                          437,700
                          
                          
                          
                          101,600Valuation
      allowance
                          
                          
                          (41,131,800
                          )
                          
                          
                          (43,804,600
                          )Future
      tax assets
                          
                          
                          9,347,500
                          
                          
                          
                          5,238,900Future tax liabilities:Plant,
      property and equipment
                          
                          
                          8,181,800
                          
                          
                          
                          4,204,000Other
                          
                          
                          209,700
                          
                          
                          
                          78,900Deferred
      tax liabilities
                          
                          
                          8,391,500
                          
                          
                          
                          4,282,900Net
      future tax asset/(liability)
                          
                          $
                          956,000
                          
                          
                          $
                          956,000





2009
                    
                    
                    2008Valuation allowance by tax
      jurisdiction:Canada
                    
                    $
                    1,299,400
                    
                    
                    $
                    1,262,600USA
                    
                    
                    39,832,400
                    
                    
                    
                    42,542,000Total
      valuation allowance
                    
                    $
                    41,131,800
                    
                    
                    $
                    43,804,600


27


The
provision for income taxes includes the following components:





2009
                  
                  
                  2008
                  
                  
                  2007Current:Canada
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  -Foreign
      - US
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  --
                  
                  
                  
                  -
                  
                  
                  
                  -Deferred:Canada
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Foreign
      - US
                  
                  
                  -
                  
                  
                  
                  (3,004,100
                  )
                  
                  
                  --
                  
                  
                  
                  (3,004,100
                  )
                  
                  
                  -Income
      tax expense (recovery)
                  
                  $
                  -
                  
                  
                  $
                  (3,004,100
                  )
                  
                  $
                  -





A
reconciliation of expected income tax on net income at statutory rates with the
actual expense (recovery) for income taxes is as follows:





2009
                        
                        
                        2008
                        
                        
                        2007Net
      income (loss)
                        
                        $
                        (5,960,100
                        )
                        
                        $
                        15,805,000
                        
                        
                        $
                        (3,116,400
                        )Statutory
      tax rate
                        
                        
                        0.3000
                        
                        
                        
                        0.3100
                        
                        
                        
                        0.3412Tax
      expense (recovery) at statutory rate
                        
                        
                        (1,788,000
                        )
                        
                        
                        4,899,600
                        
                        
                        
                        (1,063,400
                        )Foreign
      tax rates
                        
                        
                        (323,600
                        )
                        
                        
                        210,000
                        
                        
                        
                        -Change
      in tax rates
                        
                        
                        (48,600
                        )
                        
                        
                        -
                        
                        
                        
                        -Temporary
      differences recognized
                        
                        
                        -
                        
                        
                        
                        -
                        
                        
                        
                        (260,200
                        )Stock
      based compensation
                        
                        
                        -
                        
                        
                        
                        176,300
                        
                        
                        
                        -Nondeductible
      expenses
                        
                        
                        151,500
                        
                        
                        
                        3,100
                        
                        
                        
                        158,300Tax
      depletion not deducted for book
                        
                        
                        (439,900
                        )Expiration
      of loss carryforwards
                        
                        
                        1,888,300
                        
                        
                        
                        2,204,900
                        
                        
                        
                        -Change
      in valuation allowance
                        
                        
                        (2,672,800
                        )
                        
                        
                        (9,838,000
                        )
                        
                        
                        1,231,600Basis
      adjustment
                        
                        
                        2,856,800Other
                        
                        
                        376,300
                        
                        
                        
                        (660,000
                        )
                        
                        
                        (66,300
                        )Income
      tax expense (recovery)
                        
                        $
                        -
                        
                        
                        $
                        (3,004,100
                        )
                        
                        $
                        -


28




At
December 31, 2009, the Company had Canadian non-capital loss carryforwards of
approximately C$0.4 million, which expire in 2027 and Canadian capital loss
carryforwards of C$0.9 million with no expiry. Also, the Company has US net
operating loss carryforwards (“NOL’s”) of $104 million, which expire from 2010
through 2029. Due to a change in ownership resulting from the merger,
utilization of approximately $91 million of our US NOL’s are subject to an IRC
Section 382 annual limitation amount of approximately $1.0 million. A $41
million valuation allowance has been recorded against the tax effected US NOL’s
due to the Section 382 limitation and the Company does not consider realization
of such assets to meet the required “more likely than not” standard. A full
valuation allowance has been provided against the Canadian net deferred tax
assets.





14.
            Commitments and
      contingencies:





(a)
            Kendall Mine
      reclamation:





The
Kendall Mine is subject to permits granted by the Montana DEQ. In February 2002,
the DEQ issued a decision that a new and comprehensive Environmental Impact
Statement (“EIS”) was needed for completion of remaining reclamation at Kendall.
The Montana DEQ has yet to complete its work on this EIS. The Company’s estimate
to achieve mine closure could be impacted by the outcome of an agency decision
following an EIS. The Company has on deposit $2.3 million in an interest bearing
account with the DEQ for reclamation at the Kendall Mine.





(b)
            Briggs Mine surety
      bonds:





The
Briggs Mine operates under permits granted by various agencies including the
BLM, Inyo County, California, the California Department of Conservation, and the
Lahontan Regional Water Quality Control Board (“Lahontan”). The Company has
posted cash and reclamation bonds with these agencies in the amount of $4.4
million of which $4.2 million are reclamation bonds supported by a surety. All
surety bonds are subject to annual review and adjustment.





(c)
            Kendall Mine
      lawsuit:





In
      October 2001, a plaintiff group filed suit in the State of Montana
      District Court against Canyon and its wholly-owned subsidiary, CR Kendall
      Corporation.


29





In
      January 2009, the final outstanding lawsuit was dismissed with prejudice
      and the $0.2 million held by the Court was released to the Company. As of
      December 31, 2009, there were no outstanding lawsuits on the Kendall
      property.





In order
to finalize the settlement, the Company funded $0.6 million of the settlement on
behalf of one of the insurance companies and recorded the amount as a long-term
receivable as of December 31, 2009. The Company settled a lawsuit to recover the
funds from the insurance company in March 2010.





(d)
            Asset exchange
      agreement:





The
Adelaide and Tuscarora properties were originally optioned as part of the
December 2006 Asset Exchange Agreement with Newmont Capital Limited and Newmont
Mining Corporation. Under this agreement, the Company has the right to spend a
total of $3.0 million on both projects over five years to earn the Company’s
interest in the properties. The Company also has the right to sublease either
property to third parties to meet its obligations under the
agreement.





In
February 2008 the Company entered an option agreement whereby Golden Predator
Mines US Inc. (“Golden Predator”) a wholly-owned subsidiary of Golden Predator
Royalty & Development Corporation of Vancouver British Columbia, assumed the
Company’s interest and all related commitments under the Asset Exchange
Agreement in the advanced stage Adelaide and Tuscarora gold exploration
properties located in Humboldt and Elko Counties in Nevada. The Company received
an initial payment of approximately $0.5 million on closing of the transaction
and Golden Predator spent the $0.4 million commitment for 2008.





Pursuant
to the Golden Predator agreement, Atna received 2.1 million common shares of
Golden Predator in lieu of a $0.3 million option payment in January 2009.
Pursuant to the Golden Predator agreement, Atna received 0.3 million common
shares of Golden Predator Royalty & Development Corp in lieu of a $0.2
million option payment in February 2010. The shares were valued at the market
price on the payment date. Atna may earn additional option payments through 2011
in either cash or stock until Golden Predator met its spending commitments under
the assigned Newmont agreement or until notice of cancellation.





(e)
            Lease
      commitments:





The
Company has entered into various operating leases for office space and office
equipment. As of December 31, 2009, there are no future minimum lease payments
extending beyond one year under non-cancellable leases. Lease payments average
approximately $6,100 per month over the next year and approximately $1,100 per
month for the following three years..





The
Company has also entered into various mining lease arrangements for purposes of
exploring, and if warranted, developing and producing minerals from the
underlying leasehold interests. The lease arrangements typically require advance
royalty payments during the pre-production phase and a production royalty upon
commencement of production, with previously advanced payments credited against
the production royalties otherwise payable. Advance royalty commitments will
vary each year as the Company adds or deletes properties. Minimum advance
royalty payments expensed total approximately $0.1 million
annually.





The
Company is also required to pay an annual rental fee to the federal government
for any unpatented mining claims, mill or tunnel site claims on federally owned
lands at the rate of $140 per claim. The Company’s present inventory of claims
would require approximately $0.1 million in annual rental fees, however, this
amount will vary as claims are added or dropped. The Company is also subject to
lease payments to various other owners or lessors of property. Currently,
payments to these parties total approximately nil annually.


30





15.        Equity
transactions:





The
following provides a rollforward of the Company’s beginning and ending common
shares outstanding as of December 31, 2009:





Number ofSharesBeginning
      balance
                  
                  
                  83,291,133Activity
      during the period
                  
                  
                  -Ending
      balance
                  
                  
                  83,291,133





16.        Outstanding
warrants:





The
following is a summary of the outstanding warrants as of December 31, 2009,
which were assumed as a result of the merger with Canyon:





Expiration
      Date
                
                Underlying
                    Shares
                
                
                Exercise Price
                    (USD)May
      25, 2011
                
                
                2,435,294
                
                
                
                2.20





17.        Certain concentrations of
credit risk:





The
Company is subject to concentrations of credit risk in connection with
maintaining its cash primarily in two financial institutions in amounts in
excess of levels insured by the Federal Deposit Insurance Corporation. The
Company considers the institutions to be financially strong and does not
consider the underlying risk to be significant. To date, these concentrations of
credit risk have not had any effect on the Company’s financial position or
results of operations.





The
Company has sold its gold and silver production at market prices predominantly
to one or two customers during the past three years. Given the marketability and
liquidity of the precious metals being sold and because of the large number of
qualified buyers for gold and silver, the Company believes that upon the loss of
either of its customers they could be quickly replaced without any adverse
affect.





The
Company has various gold hedge derivative contracts outstanding as of December
31, 2009, which were further explained in Note 8. The Company has placed all of
its gold derivative contracts, except for the Gold Bonds, with a single
counterparty because the counterparty provided Atna with a credit limit of
$750,000. The Company believes the potential risk of default by the counterparty
to be acceptable.





The
profitability of the Company’s operations is dependent upon the production
volume and market price of gold. The price of gold or the value of mineral
interests related thereto has fluctuated widely and is affected by numerous
factors beyond the control of the Company. These factors include
international economic and political conditions, expectations of inflation,
international currency exchange rates, interest rates, global or regional
consumptive patterns, speculative activities, levels of supply and demand,
increased production due to new mine developments and improved mining and
production methods, availability and costs of metal substitutes, metal stock
levels and inventory carrying costs. The exact effect of these factors
cannot be accurately predicted, but the combination of these factors may result
in the Company not receiving an adequate return on invested capital or the
investment not retaining its value.


31





18.        Managing
capital:





The
Company is not currently subject to externally imposed capital requirements. As
of December 31, 2009, the Company has a net debt (debt less available cash)
balance of $5.9 million. Past operating cash requirements were met through the
use of a combination of asset sales, equity financings and debt. As a mining
company, the Company’s primary objective in managing capital is to use its
scarce cash resources to purchase or develop mineral resources and related cash
flows utilizing the least dilutive, costly and risky method available to the
Company. The Company closely monitors its capital structure related to the
number of shares outstanding as a result of equity financings, convertible debt
issuances and stock based compensation to minimize the level of dilution while
providing the highest possible shareholder value.





On
December 9, 2009, the Company closed a private placement of $14.5 million of
Gold Bonds as described in more detail in Note 12. The Gold Bonds require the
Company to limit its hedge positions to 50 percent of its expected
production.





On
September 18, 2009, the Company closed a non-brokered private placement for
C$1.5 million of secured debentures as described in more detail in Note 10. The
debenture agreements do not contain significant financial
covenants.





As the
credit market improved during 2009, the Company was successful in leasing
several new mining trucks, two new loaders and several used dozers. As of
December 31, 2009, the remaining lease obligations total approximately $3.0
million.





The
Company issued 17.1 million common shares as a result of the merger with Canyon.
The merger greatly increased the Company’s mineral property portfolio. In the
future, the Company may sell assets, issue project debt or equity to finance new
mines or sustain the Company’s operations. The Company monitors its cash flows
available for debt service and operations on a continuous basis through the use
of forecasts and comparisons of actual to budgeted results.





19.        Share-based
compensation:





On April
26, 2007, the Company’s shareholders approved the Atna Resources Ltd. Stock
Option Plan (the “2007 Plan”) to provide more flexibility in the compensation of
key personnel. All outstanding stock options under the Amended Atna Resources
Ltd. Employee Incentive Plan, which was established in 1996 and most recently
amended on April 20, 2006 (the “1996 Plan”), will remain active until all the
options under the 1996 Plan either expire or are exercised; however, no new
options may be granted under the 1996 Plan. As of December 31, 2009, there were
0.7 million and 6.4 million underlying shares outstanding under the 1996 Plan
and the 2007 Plan, respectively.





The 2007
Plan is administered by the Compensation Committee of the Board of Directors
consisting entirely of independent directors. The maximum number of option
shares issuable at any time is equal to 10 percent of the number of issued and
outstanding shares on a non-diluted basis. As of December 31, 2009 there was a
maximum of 8.3 million and 1.9 million underlying shares issuable and available
for future option issuances under the 2007 Plan, respectively. Directors and
employees of, or consultants to, the Company or any of its affiliates are
eligible to participate in the 2007 Plan. The Board of Directors may terminate
or amend the 2007 Plan at any time and for any reason. The 2007 Plan does not
have a termination date but according to TSX requirements all available and
unreserved securities must be approved every three years by the directors and
shareholders.


32


The
exercise price of each stock option is based on, and may not be less than, 100
percent of the fair market value of its common shares on the date of grant. The
fair market value is generally determined as the average of the high and low
trading price of its common shares on the three trading days before and
including the date of the grant. The term of each stock option is fixed by the
Compensation Committee and may not exceed 5 years from the date of grant. The
Compensation Committee also determines the vesting requirements of the grant
which may be accelerated by the Compensation Committee.




The fair
value of each option award is estimated on the date of grant using a
Black-Scholes option valuation model that uses the assumptions noted in the
following table. Expected market volatility is based on a number of factors
including historical volatility of the Company’s common shares, the Company’s
market capitalization, future outlook of the Company, and other fair value
related factors. The Company uses historical information in estimating the
expected term. Vesting periods have ranged from immediately to two years. The
risk-free rate is based on the yields of Canadian benchmark bonds which
approximate the expected life of the option. The Company has never paid a
dividend and does not plan to in the future and therefore the expected dividend
yield is nil. All of the share-based compensation expense was recorded as
general and administrative costs in the consolidated statements of operations
and none of which was capitalized.





The
following table provides certain stock options disclosures in millions
$:





2009
                
                
                2008
                
                
                2007Stock-based
      compensation expense - millions
                
                $
                0.4
                
                
                $
                0.6
                
                
                $
                0.6Intrinsic
      value of options exercised - millions
                
                $
                0.0
                
                
                $
                0.3
                
                
                $
                0.5Fair
      value of awards vesting - millions
                
                $
                0.7
                
                
                $
                0.7
                
                
                $
                0.7Cash
      received on option exercises - millions
                
                $
                0.0Unamortized
      stock-based compensation expense - millions
                
                $
                0.5





The
following table summarizes the weighted-average assumptions used in determining
fair values during the years ended December 31:




2009
                  
                  
                  2008
                  
                  
                  2007Grant
      date fair value
                  
                  CAD$
                  0.29
                  
                  
                  CAD$
                  0.31
                  
                  
                  CAD$
                  0.63Grant
      market price
                  
                  CAD$
                  0.70
                  
                  
                  CAD$
                  0.83
                  
                  
                  CAD$
                  1.36Ending
      common share price
                  
                  CAD$
                  0.71
                  
                  
                  CAD$
                  0.59
                  
                  
                  CAD$
                  1.52Expected
      volatility
                  
                  
                  60
                  %
                  
                  
                  56
                  %
                  
                  
                  67
                  %Expected
      option term - years
                  
                  
                  3.0
                  
                  
                  
                  3.1
                  
                  
                  
                  3.0Risk-free
      interest rate
                  
                  
                  1.4
                  %
                  
                  
                  2.2
                  %
                  
                  
                  2.9
                  %Forfeiture
      rate
                  
                  
                  4.8
                  %
                  
                  
                  2.8
                  %
                  
                  
                  0.0
                  %Dividend
      yield
                  
                  
                  0
                  %
                  
                  
                  0
                  %
                  
                  
                  0
                  %


33




Stock
options





The
following tables summarize the stock option activity during the years ended
December 31, 2009 and 2008:





Weighted
                  
                  
                  Weighted
                  
                  
                  Weighted
                  
                  
                  AggregateAverage
                  
                  
                  Average
                  
                  
                  Average
                  
                  
                  IntrinsicNumber
                  
                  
                  Exercise
                  
                  
                  Fair Value
                  
                  
                  Remaining
                  
                  
                  ValueOutstanding Grants 2009
                  
                  (000')
                  
                  
                  Price CAD
                  
                  
                  CAD
                  
                  
                  Contractual Life
                  
                  
                  Millions CADBalance,
      beginning of the period
                  
                  
                  5,271
                  
                  
                  $
                  1.03
                  
                  
                  $
                  0.43
                  
                  
                  
                  3.1
                  
                  
                  $
                  0.3Granted
                  
                  
                  2,730
                  
                  
                  $
                  0.70
                  
                  
                  $
                  0.29
                  
                  
                  
                  
                  
                  
                  $
                  -Exercised/Released
                  
                  
                  (40
                  )
                  
                  $
                  0.45
                  
                  
                  $
                  0.18
                  
                  
                  
                  
                  
                  
                  $
                  -Cancelled/Forfeited
                  
                  
                  (211
                  )
                  
                  $
                  1.20
                  
                  
                  $
                  0.41
                  
                  
                  
                  
                  
                  
                  $
                  -Expired
                  
                  
                  (651
                  )
                  
                  $
                  1.93
                  
                  
                  $
                  0.98
                  
                  
                  
                  
                  
                  
                  $
                  -Balance,
      end of the period
                  
                  
                  7,099
                  
                  
                  $
                  0.82
                  
                  
                  $
                  0.33
                  
                  
                  
                  3.5
                  
                  
                  $
                  0.6Vested
      and exercisable, end of the period
                  
                  
                  4,770
                  
                  
                  $
                  0.91
                  
                  
                  $
                  0.36
                  
                  
                  
                  2.9
                  
                  
                  $
                  0.4Vested
      and expected to vest, end of the period
                  
                  
                  6,951
                  
                  
                  $
                  0.82
                  
                  
                  $
                  0.33
                  
                  
                  
                  3.4
                  
                  
                  $
                  0.6





Weighted
                  
                  
                  Weighted
                  
                  
                  Weighted
                  
                  
                  AggregateAverage
                  
                  
                  Average
                  
                  
                  Average
                  
                  
                  IntrinsicNumber
                  
                  
                  Exercise
                  
                  
                  Fair Value
                  
                  
                  Remaining
                  
                  
                  ValueOutstanding Grants 2008
                  
                  (000')
                  
                  
                  Price CAD
                  
                  
                  CAD
                  
                  
                  Contractual Life
                  
                  
                  Millions CADBalance,
      beginning of the period
                  
                  
                  2,437
                  
                  
                  $
                  1.31
                  
                  
                  $
                  0.63
                  
                  
                  
                  1.1
                  
                  
                  $
                  0.9Granted
                  
                  
                  4,025
                  
                  
                  $
                  0.83
                  
                  
                  $
                  0.31
                  
                  
                  
                  
                  
                  
                  $
                  -Exercised/Released
                  
                  
                  (850
                  )
                  
                  $
                  0.68
                  
                  
                  $
                  0.29
                  
                  
                  
                  
                  
                  
                  $
                  0.4Cancelled/Forfeited
                  
                  
                  (230
                  )
                  
                  $
                  1.56
                  
                  
                  $
                  0.71
                  
                  
                  
                  
                  
                  
                  $
                  -Expired
                  
                  
                  (111
                  )
                  
                  $
                  1.65
                  
                  
                  $
                  0.81
                  
                  
                  
                  
                  
                  
                  $
                  -Balance,
      end of the period
                  
                  
                  5,271
                  
                  
                  $
                  1.03
                  
                  
                  $
                  0.43
                  
                  
                  
                  3.1
                  
                  
                  $
                  0.3Vested
      and exercisable, end of the period
                  
                  
                  3,333
                  
                  
                  $
                  1.15
                  
                  
                  $
                  0.51
                  
                  
                  
                  2.6
                  
                  
                  $
                  0.2Vested
      and expected to vest, end of the period
                  
                  
                  5,191
                  
                  
                  $
                  1.04
                  
                  
                  $
                  0.43
                  
                  
                  
                  3.1
                  
                  
                  $
                  0.3





The
following table summarizes the exercise price ranges at December 31,
2009:





Exercise Price CAD
                          
                          
                          Options Outstanding
                          
                          
                          Options ExercisableLow
                          
                          
                          High
                          
                          
                          Quantity
                          
                          
                          Weighted
                            Average
                            Remaining
                            Contractual
                            Life
                          
                          
                          Weighted
                            Average
                            Exercise
                            PriceCAD
                          
                          
                          Quantity
                          
                          
                          Weighted
                            Average
                            Remaining
                            Contractual
                            Life
                          
                          
                          Weighted
                            Average
                            Exercise
                            PriceCAD$
                          0.45
                          
                          
                          $
                          0.75
                          
                          
                          
                          4,907,500
                          
                          
                          
                          4.5
                          
                          
                          $
                          0.59
                          
                          
                          
                          2,598,121
                          
                          
                          
                          4.3
                          
                          
                          $
                          0.540.76
                          
                          
                          
                          1.25
                          
                          
                          
                          40,000
                          
                          
                          
                          4.6
                          
                          
                          
                          0.82
                          
                          
                          
                          20,000
                          
                          
                          
                          4.6
                          
                          
                          
                          0.821.26
                          
                          
                          
                          1.36
                          
                          
                          
                          2,151,640
                          
                          
                          
                          1.1
                          
                          
                          
                          1.35
                          
                          
                          
                          2,151,640
                          
                          
                          
                          1.1
                          
                          
                          
                          1.35$
                          0.45
                          
                          
                          $
                          1.36
                          
                          
                          
                          7,099,140
                          
                          
                          
                          3.5
                          
                          
                          $
                          0.82
                          
                          
                          
                          4,769,761
                          
                          
                          
                          2.9
                          
                          
                          $
                          0.91


34





In May
2009, the option plan was revised to allow options to be priced in the currency
that the recipient receives compensation for services. Prior to May 2009, all of
the options were denominated in CADs and those options represent the majority of
the outstanding options. As of December 31, 2009, there were 2.5 million options
granted and outstanding, which were denominated in USDs and had a weighted
average exercise price of $0.67.





20.        Earnings per
share:





The
Company computes earnings per share (“EPS”) by applying the provisions of CICA
Handbook Section 3500, Earnings per Share. Because
the Company reported net losses for the years ended December 31, 2009 and 2007,
inclusion of common share equivalents would have an antidilutive effect on per
share amounts. Accordingly, the Company’s basic and diluted EPS computations are
the same for the periods presented. Common share equivalents, which include
share options, warrants to purchase common shares, share grants and convertible
debentures, in the years ended December 31, 2009, 2008 and 2007 that were not
included in the computation of diluted EPS because the effect would be
antidilutive were 6.8 million, 8.5 million and 2.6 million,
respectively.





21.        Recently
issued Financial Accounting Standards:





This note
describes any recently issued accounting standard relevant to our Company and
business that may impact the Company in the future. It includes standards that
have been recently adopted or ones that have been issued and not yet
adopted.





Canadian
Standards





Section
3862 - Financial Instruments-Disclosures - In June 2009, the CICA amended
Section 3862 to require enhanced disclosure about the fair value assessments of
the financial instruments.  The new disclosures are based on a fair
value hierarchy that categorizes financial instruments measured at fair value at
one of three levels according to the reliability of the inputs used to estimate
the fair values.





EIC-174 –
Abstract on Impairment Testing of Mineral Exploration Properties - In March
2009, the CICA issued an Emerging Issues Committee (“EIC”)
Abstract.  This Abstract provides guidance on capitalization of
exploration costs related to mining properties in particular and on impairment
of long-lived assets in general.  Application of this new standard did
not have an impact on the Company’s financial statements.





EIC-173 –
Abstract on Credit Risk and the Fair Value of Financial Assets and Financial
Liabilities - In January 2009, the CICA issued an Emerging Issues Committee
(“EIC”) Abstract.  This Abstract provides guidance on taking into
account an entity’s own credit risk and the credit risk of the counterparty when
determining the fair value of financial assets and financial liabilities,
including derivative instruments. Application of this new standard should be
applied retrospectively in interim and annual financial statements for periods
ending on or after the date of issuance of the abstract. The adoption of this
guidance did not have a material impact on the Company’s financial
statements.





Section
1582 – Business Combinations – In January 2009, the CICA issued Section 1582,
which replaces Section 1581 and establishes standards for the accounting for a
business combination.  Section 1581 has been re-filed under
“Superseded Accounting Recommendations” with a Supplement added setting out the
previous wording of paragraphs in other Handbook material that has been amended
substantially as a consequence of approving new Section 1582.  The
superseded Section 1581 will be withdrawn from the Handbook when it is no longer
effective.  Section 1582 applies prospectively to business
combinations for which the acquisition date is on or after January 1,
2011.  Earlier application is permitted.  If an entity
applies this Section before January 1, 2011, it shall disclose that fact and
apply Consolidated Financial Statements, Section 1601, and Non-controlling
Interests, Section 1602, at the same time.  The Company will evaluate
the impact of Section 1582 to the financial statements beginning on January 1,
2010.


35





Section
1601 – Consolidated Financial Statements – In January 2009, the CICA issued
Section 1601, which, together with new Section 1602, replaces Section 1600 and
establishes standards for the preparation of consolidated financial
statements.   Section 1600 has been re-filed under “Superseded
Accounting Recommendations”.  The superseded Section 1600 will be
withdrawn from the Handbook when it is no longer effective.  Section
1601 applies to interim and annual consolidated financial statements relating to
fiscal years beginning on or after January 1, 2011.  Earlier adoption
is permitted as of the beginning of a fiscal year.  An entity adopting
this Section for a fiscal year beginning before January 1, 2011 also adopts
Business Combinations, Section 1582, and Non-controlling Interests, Section
1602.   The Company will evaluate the impact of Section 1601 to
the financial statements beginning on January 1, 2010.





Section
3031 – Inventories – In June 2007, the CICA issued Section 3031 replacing
Section 3030. The section provides guidance with respect to the determination of
cost and requires inventories to be measured at the lower of cost and net
realizable value. The reversal of previous write-downs to net realizable value
when there is a subsequent increase in the value of inventories is now required.
The cost of the inventories should be based on a first-in, first-out or a
weighted average cost formula. Techniques used for the measurement of cost of
inventories, such as the standard cost method, may be used for convenience if
the results approximate cost. The new standard also requires additional
disclosures including the accounting policies used in measuring inventories, the
carrying amount of the inventories, amounts recognized as an expense during the
period, write-downs and the amount of any reversal of any write-downs recognized
as a reduction in expenses. Section 3031 is effective for years beginning on or
after December 15, 2007. The adoption of this section had no material impact on
the Company’s consolidated financial statements.





Section
1535 - Capital Disclosures - In February 2007, the CICA issued Handbook Sections
1535, “Capital Disclosures”, which requires the disclosure of both qualitative
and quantitative information that provides users of financial statements with
information to evaluate the entity’s objectives, policies and processes for
managing capital. The new section is effective for years beginning on or after
October 1, 2007. The Company has implemented the new disclosures in Note
15.





Section
3862 - Financial Instruments - In February 2007, the CICA issued two new
standards, Section 3862 “Financial Instruments Disclosures” and Section 3863
“Financial Instruments Presentation” These sections will replace the existing
Section 3861 “Financial Instruments Disclosure and Presentation.” Section 3862
provides users with information to evaluate the significance of the financial
instruments of the entity’s financial position and performances, nature and
extent of risks arising from financial instrument, and how the entity manages
those risks. Section 3863 deals with the classification of financial
instruments, related interest, dividends, losses and gains, and the
circumstances in which financial assets and financial liabilities are offset.
The new sections are effective for years beginning on or after October 1, 2007.
The Company has implemented this requirement in its consolidated financial
statements and notes.





International
Financial Reporting Standards (“IFRS”) - In 2006, the Canadian Accounting
Standards Board (“AcSB”) published a new strategic plan that will significantly
affect financial reporting requirements for Canadian companies. The AcSB
strategic plan outlines the convergence of Canadian GAAP with IFRS over an
expected five year transitional period. In February 2008 the AcSB announced that
2011 is the changeover date for publicly-listed companies to use IFRS, replacing
Canada’s own GAAP. The date is for interim and annual financial statements
relating to fiscal years beginning on or after January 1, 2011.





US
Standards





In June
2009, the Financial Accounting Standards Board (“FASB”) issued a new statement
related to The FASB Accounting Standards Codification and the Hierarchy of
Generally Accepted Accounting Principles. This standard establishes only
two levels of US GAAP, authoritative and nonauthoritative.  The FASB
Codification has become the source of authoritative, nongovernmental GAAP,
except for the rules and interpretive releases of the SEC, which are sources of
authoritative GAAP for SEC registrants. The adoption of this statement did
not have any impact on the Company’s financial position and results of
operations, as the Codification was not intended to change or alter existing
GAAP.


36





In May
2009, the FASB issued a new statement related to Subsequent Events. This
statement establishes general standards of accounting for and disclosure of
events that occur after the balance sheet date but before financial statements
are issued. This statement is effective for interim or annual financial periods
ending after June 15, 2009, and shall be applied prospectively. The Company’s
reporting is currently in accordance with this statement.





In
October 2008, the FASB issued a new statement related to Determining the Fair
Value of a Financial Asset When the Market for That Asset Is Not Active. This
statement clarifies the application of previous statements related to fair
value. This statement is effective as of the issuance date.  The
Company does not expect a significant impact on the reconciliation to US GAAP
due to this statement.





In June
2008, the FASB ratified a new statement related to Determining Whether an
Instrument (or Embedded Feature) is Indexed to an Entity’s Own Stock. This
statement provides guidance in determining whether or not derivative financial
instruments are indexed to a company’s own stock. It is effective the first
fiscal year beginning after December 15, 2008, including interim periods within
those fiscal years. The Company adopted this statement on January 1, 2009 and it
had an immaterial impact on its US GAAP reconciliation.





In May
2008, the FASB issued a new statement related to The Hierarchy of Generally
Accepted Accounting Principles. This statement is intended to improve financial
reporting by identifying a consistent framework, or hierarchy, for selecting
accounting principles to be used in preparing financial statements that are
presented in conformity with US generally accepted accounting principles for
nongovernmental entities. This statement is effective 60 days following the
approval of the Public Company Accounting Oversight Board amendments to AU
Section 411, “The Meaning of Present Fairly in Conformity with Generally
Accepted Accounting Principles”. The Company does not expect a significant
impact on the reconciliation to US GAAP due to this statement.





In March
2008, the FASB issued a new statement related to Disclosures about Derivative
Instruments and Hedging Activities. This statement intends to improve financial
reporting about derivative instruments and hedging activities by requiring
enhanced disclosures to enable investors to better understand their effects on
an entity’s financial position, financial performance and cash flows. This
statement also requires disclosure about an entity’s strategy and objectives for
using derivatives, the fair values of derivative instruments and their related
gains and losses. This statement is effective for fiscal years and interim
periods beginning after November 15, 2008, and will be applicable to the
Company’s fiscal year beginning July 1, 2009. The Company will evaluate the
impact of this statement to the reconciliation to US GAAP beginning on January
1, 2010.





In
December 2007, the FASB issued a new statement related to Business Combinations,
which significantly changes the ways companies account for business combinations
and will generally require more assets acquired and liabilities assumed to be
measured at their acquisition date fair value. Under this statement, legal fees
and other transaction-related costs are expensed as incurred and are no longer
included in goodwill as a cost of acquiring the business. This statement also
requires, among other things, acquirers to estimate the acquisition date fair
value of any contingent consideration and to recognize any subsequent changes in
the fair value of contingent consideration in earnings. In addition,
restructuring costs the acquirer expected, but was not obligated to incur, will
be recognized separately from the business acquisition. This statement is
effective for the Company’s fiscal year beginning July 1, 2009, and is to be
applied prospectively. There was no impact on the Company’s US GAAP
reconciliation as a result of the implementation of this statement.





In
September 2006, FASB issued a new statement related to Fair Value Measurements.
This standard provides guidance for using fair value to measure assets and
liabilities.  This statement applies whenever other standards require
(or permit) assets or liabilities to be measured at fair value but does not
expand the use of fair value in any new circumstances.  The standard
clarifies that for items that are not actively traded, fair value should reflect
the price in a transaction with a markets participant, including an adjustment
for risk.  Under this statement, fair value refers to the price that
would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants in the market which the reporting entity
transacts.  This Statement is effective for financial statements
issued for fiscal years beginning after November 15, 2007, and interim periods
within those fiscal years. Earlier application is encouraged, provided that the
reporting entity has not yet issued financial statements for that fiscal year,
including financial statements for an interim period within that fiscal year.
The Company adopted this statement on January 1, 2008 and the adoption did not
have an impact on the reconciliation to US GAAP.


37





22.        Differences between Canadian
and United States Generally Accepted Accounting Principles:





In prior
years, there was one significant difference between Canadian GAAP and US GAAP,
which was the accounting for mineral properties. Effective January 1, 2008, the
Company changed its accounting policy for mineral properties from deferring
exploration costs incurred during the exploration stage to expensing such costs
in the year incurred. This change has been applied retroactively and the
comparative figures in the consolidated financial statements have been
restated.





The
Company issued options to US employees that were denominated in Canadian
dollars. According to the US GAAP guidance related to Share-Based Payments,
those options would be classified as liabilities rather than as equity. As of
December 31, 2009, the total liability related to this adjustment was $0.7
million and as of December 31, 2008 the total liability related to this
adjustment was $0.2 million.





In 2009,
a new statement was effective related to Determining Whether an Instrument (or
Embedded Feature) is indexed to an Entity’s Own Stock, which provides guidance
in determining whether or not derivative financial instruments are indexed to a
company’s own stock. It was determined that the Company’s outstanding warrants
and the US denominated notes payable would be recorded as a liability for US
GAAP. As of December 31, 2009, the total liability related to this adjustment
was $0.1 million.





In 2009,
the Company capitalized $1.2 million of transaction costs related to the
issuance of the gold bonds. Canadian GAAP records the transaction costs as a
discount to the liability. US GAAP records the transaction costs as an asset.
Both GAAPs amortize transaction costs to interest expense using the effective
interest method.


As of
December 31, 2009, the amortized balance of gold bond transaction costs is $1.1
million, which is shown as a difference in assets and liabilities.





The
impact of these differences on the summary consolidated financial disclosures
for the balance sheet, statement of operations and cash flows is as
follows:


38





As of December 31,
                  
                  2009
                  
                  
                  2008
                  
                  
                  2007(a)  AssetsTotal
      assets - Canadian GAAP
                  
                  $
                  79,857,300
                  
                  
                  $
                  67,411,600
                  
                  
                  $
                  13,558,400US
      GAAP adjustment - transaction costs
                  
                  
                  1,122,100
                  
                  
                  
                  -
                  
                  
                  
                  -Total
      assets - US GAAP
                  
                  $
                  80,979,400
                  
                  
                  $
                  67,411,600
                  
                  
                  $
                  13,558,400(b)  LiabilitiesTotal
      liabilities - Canadian GAAP
                  
                  $
                  25,819,900
                  
                  
                  $
                  8,137,000
                  
                  
                  $
                  1,095,100US
      GAAP adjustment - option/warrant/transaction costs
                  
                  
                  1,842,500
                  
                  
                  
                  211,100
                  
                  
                  
                  -Total
      liabilities - US GAAP
                  
                  $
                  27,662,400
                  
                  
                  $
                  8,348,100
                  
                  
                  $
                  1,095,100(c)  Shareholders'
      equityTotal
      shareholders' equity - Canadian GAAP
                  
                  $
                  54,037,400
                  
                  
                  $
                  59,274,600
                  
                  
                  $
                  12,463,300US
      GAAP adjustment - option/warrant liabilities
                  
                  
                  (720,400
                  )
                  
                  
                  (211,100
                  )
                  
                  
                  -Total
      shareholders' equity - US GAAP
                  
                  $
                  53,317,000
                  
                  
                  $
                  59,063,500
                  
                  
                  $
                  12,463,300For the Years Ended December
      31,
                  
                  2009
                  
                  
                  2008
                  
                  
                  2007(d)
      OperationsNet
      loss - Canadian GAAP
                  
                  $
                  (5,960,100
                  )
                  
                  $
                  15,805,000
                  
                  
                  $
                  (3,116,400
                  )US
      GAAP adjustment - net option/warrant expense
                  
                  
                  (351,500
                  )
                  
                  
                  285,500
                  
                  
                  
                  -Net
      income (loss) under U.S. GAAP
                  
                  $
                  (6,311,600
                  )
                  
                  $
                  16,090,500
                  
                  
                  $
                  (3,116,400
                  )(e)
      Earnings per shareBasic
      and diluted income (loss) per share - Canadian GAAP
                  
                  $
                  (0.07
                  )
                  
                  $
                  0.20
                  
                  
                  $
                  (0.05
                  )US
      GAAP adjustment - net option/warrant expense
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Basic
      and diluted income (loss) per share - US GAAP
                  
                  $
                  (0.07
                  )
                  
                  $
                  0.20
                  
                  
                  $
                  (0.05
                  )(f)
      Cash flows from operating activitiesOperating
      activities - Canadian GAAP
                  
                  $
                  (9,633,200
                  )
                  
                  $
                  (6,064,100
                  )
                  
                  $
                  (3,803,100
                  )US
      GAAP adjustment - net option/warrant expense
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Operating
      activities - US GAAP
                  
                  $
                  (9,633,200
                  )
                  
                  $
                  (6,064,100
                  )
                  
                  $
                  (3,803,100
                  )(g)
      Cash flows from investing activitiesInvesting
      activities - Canadian GAAP
                  
                  $
                  (7,842,600
                  )
                  
                  $
                  18,769,900
                  
                  
                  $
                  3,522,500US
      GAAP adjustment - none
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Investing
      activities - US GAAP
                  
                  $
                  (7,842,600
                  )
                  
                  $
                  18,769,900
                  
                  
                  $
                  3,522,500(h)
      Cash flows from financing activitiesFinancing
      activities - Canadian GAAP
                  
                  $
                  13,820,000
                  
                  
                  $
                  495,600
                  
                  
                  $
                  264,000US
      GAAP adjustment - none
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Financing
      activities - US GAAP
                  
                  $
                  13,820,000
                  
                  
                  $
                  495,600
                  
                  
                  $
                  264,000


39