----

| Report of Independent Registered Public Accounting Firm         | Page 3          |
|-----------------------------------------------------------------|-----------------|
|                                                            |            |
| Consolidated Balance Sheets                                     | Page 4          |
|                                                            |            |
| Consolidated Statements of Operations                           | Page 5          |
|                                                            |            |
| Consolidated Statement of Changes in Shareholders’ Equity | Page 6          |
|                                                            |            |
| Consolidated Statements of Cash Flows                           | Pages 7-8  |
|                                                            |            |
| Notes to Consolidated Financial Statements                      | Pages 9-38 |

----

----

|                                                                                                    |   | 2010   |        |   | 2009   |   |
|---------------------------------------------------------------------------------------------------------|--------|--------|-------------|--------|--------|--------|
| ASSETS                                                                                                  |   |   |        |   |   |   |
| Current assets                                                                                          |   |   |        |   |   |   |
| Cash and cash equivalents                                                                               |   | $      | 9,593,200   |   |   | $      | 13,060,300 |   |
| Investments available-for-sale                                                                          |   |   | -           |   |   |   | 267,700 |   |
| Gold inventories                                                                                        |   |   | 12,636,600  |   |   |   | 6,936,200 |   |
| Prepaids and other current assets                                                                       |   |   | 1,611,800   |   |   |   | 1,067,500 |   |
| Total current assets                                                                                    |   |   | 23,841,600  |   |   |   | 21,331,700 |   |
|                                                                                                    |   |   |        |   |   |   |   |   |
| Non-current assets                                                                                      |   |   |        |   |   |   |   |   |
| Property, plant, mine development and mineral interests, net                                            |   |   | 50,236,100  |   |   |   | 53,038,200 |   |
| Restricted cash                                                                                         |   |   | 5,064,500   |   |   |   | 4,076,100 |   |
| Other non-current assets                                                                                |   |   | 22,700      |   |   |   | 455,300 |   |
| Future income tax assets                                                                                |   |   | 956,000     |   |   |   | 956,000 |   |
|                                                                                                    |   |   |        |   |   |   |   |   |
| Total assets                                                                                            |   | $      | 80,120,900  |   |   | $      | 79,857,300 |   |
|                                                                                                    |   |   |        |   |   |   |   |   |
| LIABILITIES AND SHAREHOLDERS' EQUITY                                                                    |   |   |        |   |   |   |   |   |
| Current liabilities                                                                                     |   |   |        |   |   |   |   |   |
| Accounts payable                                                                                        |   | $      | 2,352,400   |   |   | $      | 1,802,200 |   |
| Derivative liabilities                                                                                  |   |   | 2,531,600   |   |   |   | 547,600 |   |
| Asset retirement obligations                                                                            |   |   | 647,900     |   |   |   | 938,900 |   |
| Notes payable                                                                                           |   |   | 2,834,100   |   |   |   | 1,321,200 |   |
| Gold bonds, net of discount                                                                             |   |   | 3,078,100   |   |   |   | 2,872,000 |   |
| Capital leases                                                                                          |   |   | 247,700     |   |   |   | 1,623,600 |   |
| Other current liabilities                                                                               |   |   | 569,500     |   |   |   | 574,000 |   |
| Total current liabilities                                                                               |   |   | 12,261,300  |   |   |   | 9,679,500 |   |
|                                                                                                    |   |   |        |   |   |   |   |   |
| Non-current liabilities                                                                                 |   |   |        |   |   |   |   |   |
| Notes payable                                                                                           |   |   | 2,406,600   |   |   |   | 837,200 |   |
| Gold bonds, net of discount                                                                             |   |   | 6,781,000   |   |   |   | 9,857,400 |   |
| Capital leases                                                                                          |   |   | 649,200     |   |   |   | 1,355,600 |   |
| Asset retirement obligations                                                                            |   |   | 3,971,400   |   |   |   | 4,090,200 |   |
| Total liabilities                                                                                       |   |   | 26,069,500  |   |   |   | 25,819,900 |   |
|                                                                                                    |   |   |        |   |   |   |   |   |
| Shareholders' equity                                                                                    |   |   |        |   |   |   |   |   |
| Share capital (no par value) unlimited shares authorized;                                               |   |   |        |   |   |   |   |   |
| issued and outstanding:  99,002,468 at December 31, 2010, and 83,291,133 at December 31, 2009 |   |   | 90,977,700  |   |   |   | 83,583,000 |   |
| Contributed surplus                                                                                     |   |   | 4,361,200   |   |   |   | 2,809,900 |   |
| Deficit                                                                                                 |   |   | (42,816,800 | )      |   |   | (34,020,000 | ) |
| Accumulated other comprehensive gain                                                                    |   |   | 1,529,300   |   |   |   | 1,664,500 |   |
| Total shareholders' equity                                                                              |   |   | 54,051,400  |   |   |   | 54,037,400 |   |
|                                                                                                    |   |   |        |   |   |   |   |   |
| Total liabilities and shareholders' equity                                                              |   | $      | 80,120,900  |   |   | $      | 79,857,300 |   |

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

----

|                                                                                  |   |   |       |   |   |   |       | Restated |   |
|---------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|----------|--------|
|                                                                                  |   | 2010   |       |   | 2009   |   |       | 2008     |   |
| REVENUE                                                                               |   |   |       |   |   |   |       |     |   |
| Gold sales                                                                            |   | $      | 30,606,900 |   |   | $      | 8,689,200  |     |   | $ | 155,100 |   |
|                                                                                  |   |   |       |   |   |   |       |     |   |   |   |   |
| EXPENSES (RECOVERIES)                                                                 |   |   |       |   |   |   |       |     |   |   |   |   |
| Cost of sales (includes depreciation and amortization for operations)                 |   |   | 29,750,900 |   |   |   | 9,126,100  |     |   |   | 148,400 |   |
| Depreciation - corporate only                                                         |   |   | 119,500    |   |   |   | 155,600    |     |   |   | 125,400 |   |
| General and administrative                                                            |   |   | 3,622,700  |   |   |   | 3,402,900  |     |   |   | 4,062,900 |   |
| Exploration                                                                           |   |   | 1,108,700  |   |   |   | 1,464,700  |     |   |   | 532,800 |   |
| Accretion expense                                                                     |   |   | 487,500    |   |   |   | 450,000    |     |   |   | 350,800 |   |
| Provision for site restoration                                                        |   |   | (410,500   | )      |   |   | 137,300    |     |   |   | 1,367,900 |   |
| Write-off of properties and receivables                                               |   |   | -          |   |   |   | -          |     |   |   | 514,600 |   |
|                                                                                  |   |   | 34,678,800 |   |   |   | 14,736,600 |     |   |   | 7,102,800 |   |
|                                                                                  |   |   |       |   |   |   |       |     |   |   |   |   |
| Operating loss                                                                        |   |   | (4,071,900 | )      |   |   | (6,047,400 | )        |   |   | (6,947,700 | ) |
|                                                                                  |   |   |       |   |   |   |       |     |   |   |   |   |
| OTHER INCOME (EXPENSE)                                                                |   |   |       |   |   |   |       |     |   |   |   |   |
| Interest income                                                                       |   |   | 31,900     |   |   |   | 59,300     |     |   |   | 338,300 |   |
| Interest expense                                                                      |   |   | (2,561,900 | )      |   |   | (433,600   | )        |   |   | (49,600 | ) |
| Realized loss on derivatives                                                          |   |   | (456,100   | )      |   |   | -          |     |   |   | - |   |
| Unrealized (loss) gain on derivatives                                                 |   |   | (1,984,000 | )      |   |   | 119,600    |     |   |   | - |   |
| (Loss) gain on asset disposals                                                        |   |   | (103,100   | )      |   |   | 196,300    |     |   |   | 19,788,200 |   |
| Write-off of marketable securities                                                    |   |   | -          |   |   |   | -          |     |   |   | (405,900 | ) |
| (Loss) gain on sale of investments available-for-sale                                 |   |   | (213,200   | )      |   |   | (26,800    | )        |   |   | 24,800 |   |
| Unrealized loss on short term investments                                             |   |   | -          |   |   |   | -          |     |   |   | (24,100 | ) |
| Other income                                                                          |   |   | 561,500    |   |   |   | 172,500    |     |   |   | 76,900 |   |
|                                                                                  |   |   | (4,724,900 | )      |   |   | 87,300     |     |   |   | 19,748,600 |   |
|                                                                                  |   |   | (8,796,800 | )      |   |   | (5,960,100 | )        |   |   | 12,800,900 |   |
| Income tax recovery                                                                   |   |   | -          |   |   |   | -          |     |   |   | 3,004,100 |   |
| Net (loss) income                                                                     |   |   | (8,796,800 | )      |   |   | (5,960,100 | )        |   |   | 15,805,000 |   |
|                                                                                  |   |   |       |   |   |   |       |     |   |   |   |   |
| COMPREHENSIVE (LOSS) INCOME                                                           |   |   |       |   |   |   |       |     |   |   |   |   |
| Unrealized losses on translating the financials of self sustaining foreign operations |   |   | (89,700    | )      |   |   | (7,000     | )        |   |   | (394,100 | ) |
| Unrealized gain (loss) on investments available-for-sale                              |   |   | (264,400   | )      |   |   | 53,900     |     |   |   | - |   |
| Reclassification adjustment for gains included in net (loss) income                   |   |   | 218,900    |   |   |   | 199,500    |     |   |   | - |   |
| Other comprehensive (loss) income                                                     |   |   | (135,200   | )      |   |   | 246,400    |     |   |   | (394,100 | ) |
|                                                                                  |   |   |       |   |   |   |       |     |   |   |   |   |
| Comprehensive (loss) income                                                           |   |   | (8,932,000 | )      |   |   | (5,713,700 | )        |   |   | 15,410,900 |   |
|                                                                                  |   |   |       |   |   |   |       |     |   |   |   |   |
| LOSS PER SHARE                                                                        |   |   |       |   |   |   |       |     |   |   |   |   |
| Basic and diluted (loss) income per share                                             |   | $      | (0.10      | )      |   | $      | (0.07      | )        |   | $ | 0.20 |   |
|                                                                                  |   |   |       |   |   |   |       |     |   |   |   |   |
| Basic weighted-average shares outstanding                                             |   |   | 84,967,450 |   |   |   | 83,291,133 |     |   |   | 79,166,725 |   |
| Effect of dilutive securities:                                                        |   |   |       |   |   |   |       |     |   |   |   |   |
| Stock options, convertible debentures, and warrants                                   |   |   | -          |   |   |   | -          |     |   |   | - |   |
|                                                                                  |   |   |       |   |   |   |       |     |   |   |   |   |
| Diluted weighted-average shares outstanding                                           |   |   | 84,967,450 |   |   |   | 83,291,133 |     |   |   | 79,166,725 |   |

----

|                                                           |   |               |       |   |   |   |       |    |   |   |        |   |   | Accumulated      |      |   |          |   |
|---------------------------------------------------------------------|--------|--------------------|------------|--------|--------|--------|------------|---------|--------|--------|-------------|--------|--------|------------------|-----------|--------|---------------|--------|
|                                                                |   | Share Capital |       |   |   |   |       |    |   |   | Other       |   |   | Total            |      |
|                                                                |   | Number of     |       |   |   |   |       |    |   |   | Contributed |   |   | Comprehensive    |      |   | Shareholders' |   |
|                                                                |   | Shares             |       |   | Amount |   |       | Deficit |   |   | Surplus     |   |   | Gain (Loss) |      |   | Equity        |   |
|                                                                |   |               |       |   |   |   |       |    |   |   |        |   |   |             |      |   |          |   |
| Balances, December 31, 2007, restated                               |   |               | 64,722,600 |   |   | $      | 52,511,700 |    |   | $      | (43,864,900 | )      |   | $                | 2,004,300 |   |          | $      | 1,812,200 |   |   | $ | 12,463,300 |   |
|                                                                |   |               |       |   |   |   |       |    |   |   |        |   |   |             |      |   |          |   |   |   |   |   |   |   |
| Exercise of stock options                                           |   |               | 850,000    |   |   |   | 820,600    |    |   |   | -           |   |   |             | (252,500  | )      |          |   | - |   |   |   | 568,100 |   |
| Issuance cost of stock options                                      |   |               | -          |   |   |   | (58,100    | )       |   |   | -           |   |   |             | -         |   |          |   | - |   |   |   | (58,100 | ) |
| Issuance for merger                                                 |   |               | 17,114,200 |   |   |   | 29,821,700 |    |   |   | -           |   |   |             | -         |   |          |   | - |   |   |   | 29,821,700 |   |
| Issuance for property purchase                                      |   |               | 604,300    |   |   |   | 487,100    |    |   |   | -           |   |   |             | -         |   |          |   | - |   |   |   | 487,100 |   |
| Share-based compensation                                            |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | 581,600   |   |          |   | - |   |   |   | 581,600 |   |
| Foreign exchange loss                                               |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | -         |   |          |   | (394,100 | ) |   |   | (394,100 | ) |
| Net income                                                          |   |               | -          |   |   |   | -          |    |   |   | 15,805,000  |   |   |             | -         |   |          |   | - |   |   |   | 15,805,000 |   |
|                                                                |   |               |       |   |   |   |       |    |   |   |        |   |   |             |      |   |          |   |   |   |   |   |   |   |
| Balances, December 31, 2008, restated                               |   |               | 83,291,100 |   |   | $      | 83,583,000 |    |   | $      | (28,059,900 | )      |   | $                | 2,333,400 |   |          | $      | 1,418,100 |   |   | $ | 59,274,600 |   |
|                                                                |   |               |       |   |   |   |       |    |   |   |        |   |   |             |      |   |          |   |   |   |   |   |   |   |
| Share-based compensation                                            |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | 381,900   |   |          |   | - |   |   |   | 381,900 |   |
| Options converted into cash                                         |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | (7,300    | )      |          |   | - |   |   |   | (7,300 | ) |
| Unrealized gain on available for sale securities                    |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | -         |   |          |   | 53,900 |   |   |   | 53,900 |   |
| Reclassification adjustment for gains included in net (loss) income |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | -         |   |          |   | 199,500 |   |   |   | 199,500 |   |
| Equity portion of debentures                                        |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | 101,900   |   |          |   | - |   |   |   | 101,900 |   |
| Foreign 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 |   |
|                                                                |   |               |       |   |   |   |       |    |   |   |        |   |   |             |      |   |          |   |   |   |   |   |   |   |
| Share-based compensation                                            |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | 518,200   |   |          |   | - |   |   |   | 518,200 |   |
| Exercise of stock options                                           |   |               | 247,700    |   |   |   | 161,600    |    |   |   | -           |   |   |             | (59,800   | )      |          |   | - |   |   |   | 101,800 |   |
| Issuance for financing, net                                         |   |               | 15,352,500 |   |   |   | 7,184,600  |    |   |   | -           |   |   |             | 1,108,300 |   |          |   | - |   |   |   | 8,292,900 |   |
| Unrealized loss on available for sale securities                    |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | -         |   |          |   | (264,400 | ) |   |   | (264,400 | ) |
| Reclassification adjustment for gains included in net (loss) income |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | -         |   |          |   | 218,900 |   |   |   | 218,900 |   |
| Debentures converted into shares                                    |   |               | 111,100    |   |   |   | 48,500     |    |   |   | -           |   |   |             | (3,900    | )      |          |   | - |   |   |   | 44,600 |   |
| Equity portion of debentures                                        |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | (11,500   | )      |          |   | - |   |   |   | (11,500 | ) |
| Foreign exchange loss                                               |   |               | -          |   |   |   | -          |    |   |   | -           |   |   |             | -         |   |          |   | (89,700 | ) |   |   | (89,700 | ) |
| Net loss                                                            |   |               | -          |   |   |   | -          |    |   |   | (8,796,800  | )      |   |             | -         |   |          |   | - |   |   |   | (8,796,800 | ) |
|                                                                |   |               |       |   |   |   |       |    |   |   |        |   |   |             |      |   |          |   |   |   |   |   |   |   |
| Balances, December 31, 2010                                         |   |               | 99,002,400 |   |   | $      | 90,977,700 |    |   | $      | (42,816,800 | )      |   | $                | 4,361,200 |   |          | $      | 1,529,300 |   |   | $ | 54,051,400 |   |

----

|                                                                                             |   |   |       |   |   |   |        | Restated |   |
|--------------------------------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-------------|----------|--------|
|                                                                                             |   | 2010   |       |   | 2009   |   |        | 2008     |   |
| Cash flows from operating activities:                                                            |   |   |       |   |   |   |        |     |   |
| Net (loss) income                                                                                |   | $      | (8,796,800 | )      |   | $      | (5,960,100  | )        |   | $ | 15,805,000 |   |
| Adjustments to reconcile net loss to net cash and cash equivalents used in operating activities: |   |   |       |   |   |   |        |     |   |   |   |   |
| Depreciation                                                                                     |   |   | 119,500    |   |   |   | 155,600     |     |   |   | 125,400 |   |
| Amortization of gold bond discount                                                               |   |   | 754,700    |   |   |   | -           |     |   |   | - |   |
| Unrealized loss (gain) on derivatives                                                            |   |   | 1,984,000  |   |   |   | (119,600    | )        |   |   | - |   |
| Loss on sales of short term investments                                                          |   |   | 213,200    |   |   |   | -           |     |   |   | - |   |
| Loss (Gain) on asset disposals                                                                   |   |   | 103,100    |   |   |   | (196,300    | )        |   |   | (19,788,200 | ) |
| Income tax benefit                                                                               |   |   | -          |   |   |   | -           |     |   |   | (3,004,100 | ) |
| Write-off properties and receivables                                                             |   |   | -          |   |   |   | -           |     |   |   | 514,600 |   |
| Purchase short term investments                                                                  |   |   | -          |   |   |   | -           |     |   |   | (113,900 | ) |
| Write-off marketable securities                                                                  |   |   | -          |   |   |   | -           |     |   |   | 405,900 |   |
| Share-based compensation expense                                                                 |   |   | 518,200    |   |   |   | 381,900     |     |   |   | 581,600 |   |
| Provision for asset retirement obligation                                                        |   |   | (410,500   | )      |   |   | 137,300     |     |   |   | 1,367,900 |   |
| Accretion of asset retirement obligation                                                         |   |   | 487,500    |   |   |   | 450,000     |     |   |   | 350,800 |   |
| Other adjustments                                                                                |   |   | (69,000    | )      |   |   | 77,800      |     |   |   | (24,800 | ) |
| Changes in operating assets and liabilities:                                                     |   |   |       |   |   |   |        |     |   |   |   |   |
| Decrease (increase) in inventories                                                               |   |   | 229,300    |   |   |   | (3,813,300  | )        |   |   | 130,400 |   |
| Decrease (increase) in prepaid and other assets                                                  |   |   | 414,700    |   |   |   | (240,600    | )        |   |   | (846,400 | ) |
| Increase in accounts payable and accrued liabilities                                             |   |   | 218,600    |   |   |   | 76,100      |     |   |   | 336,600 |   |
| Decrease in asset retirement obligations                                                         |   |   | (507,300   | )      |   |   | (527,300    | )        |   |   | (1,619,200 | ) |
| Total adjustments                                                                                |   |   | 4,056,000  |   |   |   | (3,618,400  | )        |   |   | (21,583,400 | ) |
|                                                                                             |   |   |       |   |   |   |        |     |   |   |   |   |
| Net cash and cash equivalents used in operating activities                                       |   |   | (4,740,800 | )      |   |   | (9,578,500  | )        |   |   | (5,778,400 | ) |
|                                                                                             |   |   |       |   |   |   |        |     |   |   |   |   |
| Cash flows from investing activities:                                                            |   |   |       |   |   |   |        |     |   |   |   |   |
| Purchases and development of property and equipment                                              |   |   | (1,558,300 | )      |   |   | (10,462,300 | )        |   |   | (8,203,500 | ) |
| Preproduction gold sales                                                                         |   |   | -          |   |   |   | 1,829,200   |     |   |   | - |   |
| Merger transaction costs                                                                         |   |   | -          |   |   |   | -           |     |   |   | (730,700 | ) |
| Cash received in merger                                                                          |   |   | -          |   |   |   | -           |     |   |   | 867,600 |   |
| Increase in restricted cash                                                                      |   |   | (988,400   | )      |   |   | (54,700     | )        |   |   | (285,700 | ) |
| Proceeds from sale of investments available-for-sale                                             |   |   | 258,900    |   |   |   | 720,000     |     |   |   | 6,816,500 |   |
| Proceeds from sale of property and equipment                                                     |   |   | 287,600    |   |   |   | 70,500      |     |   |   | 20,020,000 |   |
| Net cash and cash equivalents (used in) provided by investing activities                         |   |   | (2,000,200 | )      |   |   | (7,897,300  | )        |   |   | 18,484,200 |   |
|                                                                                             |   |   |       |   |   |   |        |     |   |   |   |   |
| Cash flows from financing activities:                                                            |   |   |       |   |   |   |        |     |   |   |   |   |
| Issuance of stock - exercise of options                                                          |   |   | 101,800    |   |   |   | (7,400      | )        |   |   | 568,100 |   |
| Issuance of stock equity offering                                                                |   |   | 8,436,300  |   |   |   | -           |     |   |   | - |   |
| Transaction costs equity offering                                                                |   |   | (143,400   | )      |   |   | -           |     |   |   | - |   |
| Transaction costs other                                                                          |   |   | -          |   |   |   | (983,000    | )        |   |   | (58,100 | ) |
| Issuance of gold bonds                                                                           |   |   | -          |   |   |   | 14,500,000  |     |   |   | - |   |
| Issuance of notes payable                                                                        |   |   | -          |   |   |   | 1,423,100   |     |   |   | - |   |
| Repayment of debentures                                                                          |   |   | (144,600   | )      |   |   | -           |     |   |   | - |   |
| Payments on notes payable                                                                        |   |   | (50,000    | )      |   |   | -           |     |   |   | - |   |
| Payments on gold bond                                                                            |   |   | (3,625,000 | )      |   |   | -           |     |   |   | - |   |
| Payments on capital lease obligations                                                            |   |   | (1,314,000 | )      |   |   | (1,112,700  | )        |   |   | (14,400 | ) |
|                                                                                             |   |   |       |   |   |   |        |     |   |   |   |   |
| Net cash and cash equivalents provided by financing activities                                   |   |   | 3,261,100  |   |   |   | 13,820,000  |     |   |   | 495,600 |   |
|                                                                                             |   |   |       |   |   |   |        |     |   |   |   |   |
| Effect of exchange rate changes on cash                                                          |   |   | 12,800     |   |   |   | 8,800       |     |   |   | (75,400 | ) |
| Net (decrease) increase in cash and cash equivalents                                             |   |   | (3,467,100 | )      |   |   | (3,647,000  | )        |   |   | 13,126,000 |   |
| Cash and cash equivalents, beginning of period                                                   |   |   | 13,060,300 |   |   |   | 16,707,300  |     |   |   | 3,581,300 |   |
|                                                                                             |   |   |       |   |   |   |        |     |   |   |   |   |
| Cash and cash equivalents, end of period                                                         |   | $      | 9,593,200  |   |   | $      | 13,060,300  |     |   | $ | 16,707,300 |   |

----

|                                                      |   |   |                                                                    |   |   |       |   |   |   | Restated  |   |
|-----------------------------------------------------------|--------|--------|-------------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|-----------|--------|
|                                                      |   |   |                                                                    | 2010   |   |       | 2009   |   |   | 2008      |   |
| Supplemental disclosures of cash flow information:        |   |   |                                                                    |   |   |       |   |   |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |
|                                                      | 1.     |   | Interest paid                                                           |   | $      | 2,650,500  |   |   | $      | 345,600   |   |   | $ | 49,600 |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
| Supplemental disclosures on noncash investing activity:   |   |   |                                                                    |   |   |       |   |   |   |      |   |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 1.     |   | Capitalized leases for Briggs mining equipment                          |   | $      | 2,248,200  |   |   | $      | 3,955,000 |   |   | $ | - |   |
|                                                      |   |   | Capitalized lease for Kendall equipment                                 |   | $      | -          |   |   | $      | 116,100   |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 2.     |   | Komatsu capitalized leases refinanced (reduction of capitalized leases) |   | $      | (2,935,700 | )      |   | $      | -         |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 3.     |   | Komatsu capitalized leased refinanced as notes payable                  |   | $      | 3,162,100  |   |   | $      | -         |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 4.     |   | Capitalized asset retirement obligation for Briggs leach pad            |   | $      | -          |   |   | $      | -         |   |   | $ | 344,400 |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 5.     |   | Marketable securities received for option payments                      |   | $      | 265,900    |   |   | $      | 196,900   |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 6.     |   | Marketable securities received for sale of Marg property                |   | $      | -          |   |   | $      | 192,700   |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 7.     |   | Embedded derivative fair value                                          |   | $      | -          |   |   | $      | 667,200   |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 8.     |   | Accrued gold bond transactions costs                                    |   | $      | -          |   |   | $      | 255,000   |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 9.     |   | Depreciation processed through inventory                                |   | $      | 6,701,200  |   |   | $      | 2,565,500 |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
| 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 |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 3.     |   | Issued 17,724 shares for exercise of options                            |   | $      | 14,700     |   |   | $      | -         |   |   | $ | - |   |
|                                                      |   |   |                                                                    |   |   |       |   |   |   |      |   |   |   |   |   |
|                                                      | 4.     |   | Issued 111,111 shares converted from debentures                         |   | $      | 48,500     |   |   | $      | -         |   |   | $ | - |   |

----

----

----

----

|   | · | 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. |
|--------|--------|----------------------------------------------------------------------|

|                                     |                 |   |   |   |   | 2010       |       |   | 2009     |   |
|------------------------------------------|----------------------|--------|--------|--------|--------|------------|------------|--------|----------|--------|
|                                     |                 |   |   |   |   | Estimated  |       |   | Carrying |   |   | Estimated |   |   | Carrying |   |
|                                     | Category             |   | Level  |   |   | Fair Value |       |   | Value    |   |   | Fair Value |   |   | Value |   |
|                                     |                 |   |   |   |   |       |       |   |     |   |   |   |   |   |   |   |
| Financial assets:                        |                 |   |   |   |   |       |       |   |     |   |   |   |   |   |   |   |
| Cash and cash equivalents                | Available-for-sale   |   | n/a    |   |   |       | 9,593,200  |   |     |   | 9,593,200 |   |   |   | 13,060,300 |   |   |   | 13,060,300 |   |
| Restricted cash                          | Loans and receivable |   | 1      |   |   |       | 5,064,500  |   |     |   | 5,064,500 |   |   |   | 4,076,100 |   |   |   | 4,076,100 |   |
| Investments                              | Available-for-sale   |   | 1      |   |   |       | -          |   |     |   | - |   |   |   | 267,700 |   |   |   | 267,700 |   |
| Total financial assets                   |                 |   |   |   |   |       | 14,657,700 |   |     |   | 14,657,700 |   |   |   | 17,404,100 |   |   |   | 17,404,100 |   |
|                                     |                 |   |   |   |   |       |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Financial liabilities:                   |                 |   |   |   |   |       |       |   |     |   |   |   |   |   |   |   |   |   |   |   |
| Accounts payable and accrued liabilities | At amortized cost    |   | n/a    |   |   |       | 2,921,900  |   |     |   | 2,921,900 |   |   |   | 2,376,200 |   |   |   | 2,376,200 |   |
| Derivative liabilities                   | Held-for-trading     |   | 2      |   |   |       | 2,531,600  |   |     |   | 2,531,600 |   |   |   | 547,600 |   |   |   | 547,600 |   |
| Notes payable                            | At amortized cost    |   | 2      |   |   |       | 5,240,700  |   |     |   | 5,240,700 |   |   |   | 2,158,400 |   |   |   | 2,158,400 |   |
| Gold bonds, net of discount              | At amortized cost    |   | 2      |   |   |       | 9,859,100  |   |     |   | 9,859,100 |   |   |   | 12,729,400 |   |   |   | 12,729,400 |   |
| Capital leases                           | At amortized cost    |   | n/a    |   |   |       | 896,900    |   |     |   | 896,900 |   |   |   | 2,979,200 |   |   |   | 2,979,200 |   |
| Total financial liabilities              |                 |   |   |   |   |       | 21,450,200 |   |     |   | 21,450,200 |   |   |   | 20,790,800 |   |   |   | 20,790,800 |   |

----

|                         |   | 2010         |   |   |         |   |   | 2009         |   |   |         |   |
|------------------------------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|--------|--------------|--------|
|                         |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |   | Level 1 |   |   | Level 2 |   |   | Level 3 |   |
|                         |   |         |   |   |         |   |   |         |   |   |         |   |   |   |   |   |   |   |
| Liabilities:                 |   |         |   |   |         |   |   |         |   |   |         |   |   |   |   |   |   |   |
| Asset retirement obligations |   |         | -      |   |         |   | -      |         |   |   | 4,619,300    |   |   |   | - |   |   |   | - |   |   |   | 5,029,100 |   |

----

----

| Purchase price as of March 18, 2008:                            |   |   |       |
|-----------------------------------------------------------------|--------|--------|------------|
| Canyon common shares                                            |   | $      | 28,080,100 |   |
| Estimated Atna transaction costs                                |   |   | 1,472,300  |   |
| Severance payments                                              |   |   | 142,400    |   |
| Estimated fair value of options, warrants and debentures issued |   |   | 1,533,800  |   |
|                                                            |   |   |       |   |
|                                                            |   | $      | 31,228,600 |   |
| Purchase price allocation:                                      |   |   |       |   |
| Cash and cash equivalents                                       |   | $      | 867,600    |   |
| Accounts receivable                                             |   |   | 4,500      |   |
| Metal inventories                                               |   |   | 151,300    |   |
| Prepaid insurance                                               |   |   | 56,800     |   |
| Other current assets                                            |   |   | 100,400    |   |
| Property, plant, mine development, and mineral interests net    |   |   | 34,297,800 |   |
| Restricted cash                                                 |   |   | 3,676,300  |   |
| Other noncurrent assets                                         |   |   | 22,000     |   |
| Accounts 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 |   |

----

----

|                                       |   | 2010   |       |   | 2009   |   |
|--------------------------------------------|--------|--------|------------|--------|--------|--------|
| Ore stockpile                              |   | $      | 431,200    |   |   | $      | 593,100 |   |
| Leach pad                                  |   |   | 10,470,000 |   |   |   | 5,364,700 |   |
| Process plant and refinery                 |   |   | 1,735,400  |   |   |   | 978,400 |   |
|                                       |   |   |       |   |   |   |   |   |
| Total gold inventories                     |   | $      | 12,636,600 |   |   | $      | 6,936,200 |   |
|                                       |   |   |       |   |   |   |   |   |
| Total inventory cost in cost of goods sold |   | $      | 29,697,600 |   |   | $      | 8,993,200 |   |
|                                       |   |   |       |   |   |   |   |   |
| Lower of cost or market adjustments        |   | $      | 53,300     |   |   | $      | 132,800 |   |

|                    |           |   | 2010        |       |
|-------------------------|----------------|--------|-------------|------------|
|                    | Depreciation   |   | Asset Value |       |   | Accumulated |   |   | Net Book |   |
|                    |  Method   |   | at Cost     |       |   | Depreciation |   |   | Value |   |
| Buildings and equipment | 1 - 5 Years SL |   | $           | 22,882,400 |   |   | $ | 6,488,900 |   |   | $ | 16,393,500 |   |
| Mine development        | UOP            |   |        | 4,623,100  |   |   |   | 1,164,100 |   |   |   | 3,459,000 |   |
| Deferred stripping      | UOP            |   |        | 3,947,400  |   |   |   | 1,089,000 |   |   |   | 2,858,400 |   |
| Mineral interest        | UOP            |   |        | 28,676,200 |   |   |   | 1,581,400 |   |   |   | 27,094,800 |   |
| Asset retirement cost   | UOP            |   |        | 543,600    |   |   |   | 113,200 |   |   |   | 430,400 |   |
|                    |           |   |        |       |   |   |   |   |   |   |   |   |   |
|                    |           |   | $           | 60,672,700 |   |   | $ | 10,436,600 |   |   | $ | 50,236,100 |   |

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

----

|                                |   | Briggs (a) |       |   | Reward (b) |   |      | Columbia (c) |   |
|-------------------------------------|--------|-----------------|------------|--------|-----------------|--------|-----------|-------------------|--------|
| Beginning balance, January 1, 2010  |   | $               | 29,884,300 |   |            | $      | 8,626,300 |              |   | $ | 9,031,400 |   |
|                                |   |            |       |   |            |   |      |              |   |   |   |   |
| Acquisition/development capitalized |   |            | 3,770,100  |   |            |   | 454,100   |              |   |   | - |   |
| Depreciation and Amortization       |   |            | (6,701,200 | )      |            |   | -         |              |   |   | - |   |
| Dispositions                        |   |            | (151,900   | )      |            |   | -         |              |   |   | - |   |
| Effect of foreign rate change       |   |            | -          |   |            |   | -         |              |   |   | - |   |
| Net change in the period            |   |            | (3,083,000 | )      |            |   | 454,100   |              |   |   | - |   |
|                                |   |            |       |   |            |   |      |              |   |   |   |   |
| Ending balance, December 31, 2010   |   | $               | 26,801,300 |   |            | $      | 9,080,400 |              |   | $ | 9,031,400 |   |

|                                |   | Pinson (d) |    |   | Other (e) |   |      | Total  |   |
|-------------------------------------|--------|-----------------|---------|--------|----------------|--------|-----------|--------|--------|
| Beginning balance, January 1, 2010  |   | $               | 412,700 |   |           | $      | 5,083,500 |   |   | $ | 53,038,200 |   |
|                                |   |            |    |   |           |   |      |   |   |   |   |   |
| Acquisition/development capitalized |   |            | 75,000  |   |           |   | 92,900    |   |   |   | 4,392,100 |   |
| Depreciation and Amortization       |   |            | (68,800 | )      |           |   | (50,800   | )      |   |   | (6,820,800 | ) |
| Dispositions                        |   |            | -       |   |           |   | (222,600  | )      |   |   | (374,500 | ) |
| Effect of foreign rate change       |   |            | -       |   |           |   | 1,100     |   |   |   | 1,100 |   |
| Net change in the period            |   |            | 6,200   |   |           |   | (179,400  | )      |   |   | (2,802,100 | ) |
|                                |   |            |    |   |           |   |      |   |   |   |   |   |
| Ending balance, December 31, 2010   |   | $               | 418,900 |   |           | $      | 4,904,100 |   |   | $ | 50,236,100 |   |

|   | (a) | Briggs Mine, California: |
|--------|-----|--------------------------|

|   | (b) | Reward Project, Nevada: |
|--------|-----|-------------------------|

----

|   | (c)  | Columbia Property, Montana: |
|--------|-----------|-----------------------------|

|   |   |
|--------|--------|

|   | (d) | Pinson Property, Nevada: |
|--------|-----|--------------------------|

|   | (e) | Other Properties: |
|--------|-----|-------------------|

----

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

|                                |   | 2010   |      |   | 2009   |   |
|-------------------------------------|--------|--------|-----------|--------|--------|--------|
| Kendall reclamation property (a)    |   | $      | 2,339,000 |   |   | $      | 2,328,900 |   |
| Briggs Mine (b)                     |   |   | 1,911,800 |   |   |   | 1,638,500 |   |
| Columbia property (c)               |   |   | 64,600    |   |   |   | 64,600 |   |
| Reward Project (d)                  |   |   | 738,600   |   |   |   | 33,700 |   |
| Other properties                    |   |   | 10,500    |   |   |   | 10,400 |   |
|                                |   |   |      |   |   |   |   |   |
| Total restricted cash - Non-current |   | $      | 5,064,500 |   |   | $      | 4,076,100 |   |

----

| 8. | Financial instruments: |
|----|------------------------|

|                          |   | US$               |   |   | Expiry Date |   |   |   |   |   | US$    |   |
|-------------------------------|--------|-------------------|--------|--------|------------------|--------|--------|--------|--------|--------|--------|--------|
| Derivative Contracts          |   | Strike Price |   |   | 2011             |   |   | 2012   |   |   | 2013   |   |   | Total |   |   | Fair Value |   |
| Gold Bond Forwards - Ozs      |   | $                 | 1,113  |   |             |   | 3,257  |   |   |   | 3,257  |   |   |   | 3,257 |   |   |   | 9,771 |   |   | $ | 2,531,600 |   |
| Embedded derivative (Note 12) |   |              |   |   |             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                          |   | US$               |   |   | Discount |   |   | Remaining         |   |   | Forward |   |
|-------------------------------|--------|-------------------|--------|--------|----------|--------|--------|-------------------|--------|--------|---------|--------|
| Hedging Contract              |   | Strike Price |   |   | Rate     |   |   | Life (Years) |   |   | Rate    |   |
| Gold bond forwards            |   | $                 | 1,113  |   |     |   | 12     | %                 |   |   | 1.5     |   |   |   | 1.2 | % |
| Embedded derivative (Note 12) |   |              |   |   |     |   |   |              |   |   |    |   |   |   |   |   |
|                          |   |              |   |   |     |   |   |              |   |   |    |   |   |   |   |   |
| Gold Price - end of period    |   | $                 | 1,406  |   |     |   |   |              |   |   |    |   |   |   |   |   |

----

| 9. | Asset retirement obligations: |
|----|-------------------------------|

|                                         |   | 2010   |      |   | 2009   |   |
|----------------------------------------------|--------|--------|-----------|--------|--------|--------|
| Balance, beginning of the period             |   | $      | 5,029,100 |   |   | $      | 4,918,400 |   |
| Settlements                                  |   |   | (507,300  | )      |   |   | (527,300 | ) |
| Accretion expense                            |   |   | 487,500   |   |   |   | 450,000 |   |
| Change in estimate                           |   |   | (410,500  | )      |   |   | 137,300 |   |
| Effect of exchange rate on activity          |   |   | 20,500    |   |   |   | 50,700 |   |
| Balance, end of the period                   |   |   | 4,619,300 |   |   |   | 5,029,100 |   |
| Less: asset retirement obligations - current |   |   | 647,900   |   |   |   | 938,900 |   |
|                                         |   |   |      |   |   |   |   |   |
| Asset retirement obligations - non-current   |   | $      | 3,971,400 |   |   | $      | 4,090,200 |   |

----

| Anticipated spending per year (undiscounted):         |   |   |      |
|-------------------------------------------------------|--------|--------|-----------|
| 2011                                                  |   | $      | 735,500   |   |
| 2012                                                  |   |   | 1,153,100 |   |
| 2013                                                  |   |   | 830,600   |   |
| 2014                                                  |   |   | 37,400    |   |
| 2015                                                  |   |   | 1,531,800 |   |
| Thereafter                                            |   |   | 2,075,700 |   |
|                                                  |   |   |      |   |
| Total                                                 |   | $      | 6,364,100 |   |
|                                                  |   |   |      |   |
| Asset Retirement Obligations Capitalized by Property: |   |   |      |   |
| Briggs Mine                                           |   | $      | 408,900   |   |
| Reward Project                                        |   |   | 21,500    |   |
|                                                  |   |   |      |   |
| Total                                                 |   | $      | 430,400   |   |

| Summary of Asset Retirement Obligations by Property: |   |   |      |
|------------------------------------------------------|--------|--------|-----------|
| Kendall Mine                                         |   | $      | 2,238,900 |   |
| Briggs Mine                                          |   |   | 1,918,900 |   |
| Pinson Project                                       |   |   | 313,100   |   |
| Jarbidge and Beowawe Properties                      |   |   | 68,700    |   |
| Columbia Project                                     |   |   | 45,400    |   |
| Reward Project                                       |   |   | 34,300    |   |
|                                                 |   |   |      |   |
| Total                                                |   | $      | 4,619,300 |   |

----

| 10. | Notes payable: |
|-----|----------------|

| Balance, beginning of the period |   | $      | 2,158,400 |   |
|----------------------------------|--------|--------|-----------|--------|
| Capital lease refinance          |   |   | 3,162,100 |   |
| Principal payments               |   |   | (183,100  | )      |
| Conversions to equity            |   |   | (44,600   | )      |
| Other activity                   |   |   | 147,900   |   |
| Balance, end of the period       |   |   | 5,240,700 |   |
| Less: notes payable - current    |   |   | 2,834,100 |   |
|                             |   |   |      |   |
| Notes payable - non-current      |   | $      | 2,406,600 |   |

----

| 11. | Capital leases: |
|-----|-----------------|

| Balance, beginning of the period    |   | $      | 2,979,200  |   |
|-------------------------------------|--------|--------|------------|--------|
| New leases                          |   |   | 2,248,200  |   |
| Payments applied to principal       |   |   | (1,314,000 | )      |
| Lease Refinance (see notes payable) |   |   | (2,935,700 | )      |
| Transfer to Notes Payable           |   |   | (80,800    | )      |
| Balance, end of the period          |   |   | 896,900    |   |
| Less: capital leases - current      |   |   | 247,700    |   |
|                                |   |   |       |   |
| Capital leases - non-current        |   | $      | 649,200    |   |

| 2011                                        |   | $      | 291,500   |   |
|---------------------------------------------|--------|--------|-----------|--------|
| 2012                                        |   |   | 194,200   |   |
| 2013                                        |   |   | 180,700   |   |
| 2014                                        |   |   | 144,000   |   |
| 2015                                        |   |   | 203,500   |   |
| Later years                                 |   |   |      |   |
| Total minimum capital lease payments        |   | $      | 1,013,900 |   |
| Less: Imputed interest                      |   |   | 117,000   |   |
|                                        |   |   |      |   |
| Present value of net minimum lease payments |   | $      | 896,900   |   |

----

| 12. | Gold bonds: |
|-----|-------------|

|                             |   |            |       |   | Discount    |   |       |       |   |
|----------------------------------|--------|-----------------|------------|--------|-------------|--------|------------|------------|--------|
|                             |   |            |       |   | Transaction |   |       | Embedded   |   |   |   |   |
|                             |   | Gold Bonds |       |   | Costs       |   |       | Derivative |   |   | Total |   |
| Balance, beginning of the period |   | $               | 14,500,000 |   |        | $      | (1,122,100 | )          |   | $ | (648,500 | ) |   | $ | 12,729,400 |   |
| Issuances                        |   |            | -          |   |        |   | -          |       |   |   | - |   |   |   | - |   |
| Payments                         |   |            | (3,625,000 | )      |        |   | -          |       |   |   | - |   |   |   | (3,625,000 | ) |
| Amortization                     |   |            | -          |   |        |   | 478,200    |       |   |   | 276,500 |   |   |   | 754,700 |   |
| Balance, end of the period       |   |            | 10,875,000 |   |        |   | (643,900   | )          |   |   | (372,000 | ) |   |   | 9,859,100 |   |
| Less: gold bonds - current       |   |            |       |   |        |   |       |       |   |   |   |   |   |   | 3,078,100 |   |
|                             |   |            |       |   |        |   |       |       |   |   |   |   |   |   |   |   |
| Gold bonds - non-current         |   |            |       |   |        |   |       |       |   |   |   |   |   | $ | 6,781,000 |   |

----

| 13. | Income taxes: |
|-----|---------------|

|                                     |   | 2010   |        |   | 2009   |   |
|------------------------------------------|--------|--------|-------------|--------|--------|--------|
| Future tax assets:                       |   |   |        |   |   |   |
| Noncapital loss carryfowards, Canada     |   | $      | 462,400     |   |   | $      | 104,600 |   |
| Net operating loss carryforwards, US     |   |   | 38,430,900  |   |   |   | 41,609,600 |   |
| Capital loss carryforwards, Canada       |   |   | 321,400     |   |   |   | 215,400 |   |
| Mineral properties                       |   |   | 7,465,700   |   |   |   | 5,948,600 |   |
| Reclamation costs                        |   |   | 1,477,100   |   |   |   | 1,800,400 |   |
| Derivatives                              |   |   | 1,369,900   |   |   |   | 211,200 |   |
| Share issuance costs                     |   |   | 43,300      |   |   |   | 72,000 |   |
| Marketable equity securities             |   |   | 13,500      |   |   |   | 79,800 |   |
| Capital assets                           |   |   | -           |   |   |   | - |   |
| Other                                    |   |   | 267,100     |   |   |   | 437,700 |   |
| Valuation allowance                      |   |   | (40,354,800 | )      |   |   | (41,131,800 | ) |
| Future tax assets                        |   |   | 9,496,500   |   |   |   | 9,347,500 |   |
|                                     |   |   |        |   |   |   |   |   |
| Future tax liabilities:                  |   |   |        |   |   |   |   |   |
| Plant, property and equipment            |   |   | 8,326,400   |   |   |   | 8,181,800 |   |
| Other                                    |   |   | 214,100     |   |   |   | 209,700 |   |
| Deferred tax liabilities                 |   |   | 8,540,500   |   |   |   | 8,391,500 |   |
|                                     |   |   |        |   |   |   |   |   |
| Net future tax asset/(liability)         |   | $      | 956,000     |   |   | $      | 956,000 |   |
|                                     |   |   |        |   |   |   |   |   |
|                                     |   | 2010   |        |   | 2009   |   |
| Valuation allowance by tax jurisdiction: |   |   |        |   |   |   |   |   |
| Canada                                   |   | $      | 1,702,100   |   |   | $      | 1,299,400 |   |
| USA                                      |   |   | 38,652,700  |   |   |   | 39,832,400 |   |
|                                     |   |   |        |   |   |   |   |   |
| Total valuation allowance                |   | $      | 40,354,800  |   |   | $      | 41,131,800 |   |

----

|                          |   |   |   |   |   |   |   | Restated |   |
|-------------------------------|--------|--------|--------|--------|--------|--------|--------|----------|--------|
|                          |   | 2010   |   |   | 2009   |   |   | 2008     |   |
|                          |   |   |   |   |   |   |   |     |   |
| Current:                      |   |   |   |   |   |   |   |     |   |
| Canada                        |   | $      | -      |   |   | $      | -      |     |   | $ | - |   |
| Foreign - US                  |   |   | -      |   |   |   | -      |     |   |   | - |   |
|                          |   |   | -      |   |   |   | -      |     |   |   | - |   |
|                          |   |   |   |   |   |   |   |     |   |   |   |   |
| Future:                       |   |   |   |   |   |   |   |     |   |   |   |   |
| Canada                        |   |   | -      |   |   |   | -      |     |   |   | - |   |
| Foreign - US                  |   |   | -      |   |   |   | -      |     |   |   | (3,004,100 | ) |
|                          |   |   | -      |   |   |   | -      |     |   |   | (3,004,100 | ) |
|                          |   |   |   |   |   |   |   |     |   |   |   |   |
| Income tax expense (recovery) |   | $      | -      |   |   | $      | -      |     |   | $ | (3,004,100 | ) |

|                                     |   |   |       |   |   |   |       | Restated |   |
|------------------------------------------|--------|--------|------------|--------|--------|--------|------------|----------|--------|
|                                     |   | 2010   |       |   | 2009   |   |       | 2008     |   |
| Net income (loss)                        |   | $      | (8,796,800 | )      |   | $      | (5,960,100 | )        |   | $ | 15,805,000 |   |
| Statutory tax rate                       |   |   | 0.3000     |   |   |   | 0.3000     |     |   |   | 0.3100 |   |
| Tax expense (recovery) at statutory rate |   |   | (2,639,000 | )      |   |   | (1,788,000 | )        |   |   | 4,899,600 |   |
|                                     |   |   |       |   |   |   |       |     |   |   |   |   |
| Foreign tax rates                        |   |   | (75,400    | )      |   |   | (323,600   | )        |   |   | 210,000 |   |
| Change in tax rates                      |   |   | (450,600   | )      |   |   | (48,600    | )        |   |   | - |   |
| Temporary differences recognized         |   |   | -          |   |   |   | -          |     |   |   | - |   |
| Stock based compensation                 |   |   | 143,400    |   |   |   | -          |     |   |   | 176,300 |   |
| Nondeductible expenses                   |   |   | -          |   |   |   | 151,500    |     |   |   | 3,100 |   |
| Tax depletion not deducted for book      |   |   | (701,000   | )      |   |   | (439,900   | )        |   |   | - |   |
| Expiration of loss carryforwards         |   |   | 3,425,800  |   |   |   | 1,888,300  |     |   |   | 2,204,900 |   |
| Change in valuation allowance            |   |   | 777,000    |   |   |   | (2,672,800 | )        |   |   | (9,838,000 | ) |
| Basis adjustment                         |   |   | -          |   |   |   | 2,856,800  |     |   |   | - |   |
| Change in loss carryforwards             |   |   | (504,500   | )      |   |   |       |     |   |   |   |   |
| Other                                    |   |   | 24,300     |   |   |   | 376,300    |     |   |   | (660,000 | ) |
|                                     |   |   |       |   |   |   |       |     |   |   |   |   |
| Income tax expense (recovery)            |   | $      | -          |   |   | $      | -          |     |   | $ | (3,004,100 | ) |

----

| 14. | Commitments and contingencies: |
|-----|--------------------------------|

|   | (a) | Kendall Mine reclamation: |
|--------|-----|---------------------------|

|   | (b) | Surety bonds: |
|--------|-----|---------------|

|   | (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. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 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. |
|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Asset exchange agreement: |
|--------|-----|---------------------------|

----

|   | (e) | Lease commitments: |
|--------|-----|--------------------|

| 15. | Equity transactions: |
|-----|----------------------|

|                             |   | Number of |       |
|----------------------------------|--------|-----------|------------|
|                             |   | Shares    |       |
| Balance, beginning of the period |   |      | 83,291,133 |   |
| Option exercises                 |   |      | 247,724    |   |
| Conversions of notes payable     |   |      | 111,111    |   |
| Equity offering                  |   |      | 15,352,500 |   |
|                             |   |      |       |   |
| Balance, end of the period       |   |      | 99,002,468 |   |

----

| 16. | Outstanding warrants: |
|-----|-----------------------|

|             |   | Remaining               |   |   |                |   |   | Underlying |   |
|------------------|--------|-------------------------|--------|--------|---------------------|--------|--------|------------|--------|
| Expiration Date  |   | Life in Years |   |   | Exercise Price |   |   | Shares     |   |
|             |   |                    |   |   |                |   |   |       |   |
| May 25, 2011     |   |                    | 0.4    |   |                | USD$   | 2.20   |       |   |   | 1,782,888 |   |
| December 2, 2012 |   |                    | 1.9    |   |                | CAD$   | 0.70   |       |   |   | 8,674,162 |   |
|             |   |                    |   |   |                |   |   |       |   |   |   |   |
|             |   |                    |   |   |                |   |   |       |   |   | 10,457,050 |   |

| 17. | Certain concentrations of credit risk: |
|-----|----------------------------------------|

| 18. | Managing capital: |
|-----|-------------------|

----

| 19. | Cost of Sales: |
|-----|----------------|

|                                                             |   | 2010   |       |   | 2009   |   |
|------------------------------------------------------------------|--------|--------|------------|--------|--------|--------|
| Mining operation costs (excluding depreciation and amortization) |   |   | 28,750,100 |   |   |   | 11,030,100 |   |
| Increase in gold inventory - cash costs                          |   |   | (4,341,000 | )      |   |   | (3,198,100 | ) |
| Increase in gold inventory - non-cash costs                      |   |   | (1,412,700 | )      |   |   | (1,404,200 | ) |
| Mining related depreciation and amortization                     |   |   | 6,701,200  |   |   |   | 2,565,500 |   |
| Lower of cost or market adjustment                               |   |   | 53,300     |   |   |   | 132,800 |   |
|                                                             |   |   |       |   |   |   |   |   |
| Total cost of sales                                              |   |   | 29,750,900 |   |   |   | 9,126,100 |   |

| 20. | Share-based compensation: |
|-----|---------------------------|

----

|                                                    |   | 2010 |   |   | 2009   |   |   | 2008   |   |
|---------------------------------------------------------|--------|------|--------|--------|--------|--------|--------|--------|--------|
| Stock-based compensation expense - millions             |   | $    | 0.5    |   |   | $      | 0.4    |   |   | $ | 0.6 |   |
| Intrinsic value of options exercised - millions         |   | $    | 0.0    |   |   | $      | 0.0    |   |   | $ | 0.3 |   |
| Fair value of awards vesting - millions                 |   | $    | 0.5    |   |   | $      | 0.7    |   |   | $ | 0.7 |   |
| Cash received on option exercises - millions            |   | $    | 0.1    |   |   | $      | 0.0    |   |   | $ | 0.5 |   |
| Unamortized stock-based compensation expense - millions |   | $    | 0.5    |   |   | $      | 0.5    |   |   | $ | 0.2 |   |

|                         |   | 2010   |   |   | 2009   |   |   | 2008   |   |
|------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Grant date fair value        |   | CAD$   | 0.23   |   |   | CAD$   | 0.29   |   |   | CAD$ | 0.31 |   |
| Grant market price           |   | CAD$   | 0.59   |   |   | CAD$   | 0.70   |   |   | CAD$ | 0.83 |   |
| Ending common share price    |   | CAD$   | 0.63   |   |   | CAD$   | 0.71   |   |   | CAD$ | 0.59 |   |
| Expected volatility          |   |   | 59     | %      |   |   | 60     | %      |   |   | 56 | % |
| Expected option term - years |   |   | 2.9    |   |   |   | 3.0    |   |   |   | 3.1 |   |
| Risk-free interest rate      |   |   | 1.0    | %      |   |   | 1.4    | %      |   |   | 2.2 | % |
| Forfeiture rate              |   |   | 7.0    | %      |   |   | 4.8    | %      |   |   | 2.8 | % |
| Dividend yield               |   |   | 0      | %      |   |   | 0      | %      |   |   | 0 | % |

----

|                                           |   |   |   |   |           |   |   |            |   |   |                  |   |   |              |   |
|------------------------------------------------|--------|--------|--------|--------|----------------|--------|--------|-----------------|--------|--------|-----------------------|--------|--------|-------------------|--------|
|                                           |   |   |   |   | Weighted       |   |   | Weighted        |   |   | Weighted              |   |   | Aggregate         |   |
|                                           |   |   |   |   | Average        |   |   | Average         |   |   | Average               |   |   | Intrinsic         |   |
|                                           |   | Number |   |   | Exercise       |   |   | Fair Value |   |   | Remaining             |   |   | Value             |   |
| Outstanding Grants 2010                        |   | (000') |   |   | Price CAD |   |   | CAD             |   |   | Contractual Life |   |   | Millions CAD |   |
| Balance, beginning of the period               |   |   | 7,099  |   |           | $      | 0.82   |            |   | $      | 0.33                  |   |   |              | 3.5    |   |   | $ | 0.6 |   |
| Granted                                        |   |   | 2,433  |   |           | $      | 0.59   |            |   | $      | 0.23                  |   |   |              |   |   |   | $ | - |   |
| Exercised/Released                             |   |   | (305   | )      |           | $      | 0.45   |            |   | $      | 0.20                  |   |   |              |   |   |   | $ | - |   |
| Cancelled/Forfeited                            |   |   | (437   | )      |           | $      | 0.66   |            |   | $      | 0.27                  |   |   |              |   |   |   | $ | - |   |
| Expired                                        |   |   | (671   | )      |           | $      | 1.36   |            |   | $      | 0.63                  |   |   |              |   |   |   | $ | - |   |
| Balance, end of the period                     |   |   | 8,119  |   |           | $      | 0.72   |            |   | $      | 0.28                  |   |   |              | 3.4    |   |   | $ | 0.4 |   |
| Vested and exercisable, end of the period      |   |   | 5,770  |   |           | $      | 0.76   |            |   | $      | 0.29                  |   |   |              | 2.9    |   |   | $ | 0.4 |   |
| Vested and expected to vest, end of the period |   |   | 7,928  |   |           | $      | 0.72   |            |   | $      | 0.28                  |   |   |              | 3.4    |   |   | $ | 0.4 |   |

|                                           |   |   |   |   |           |   |   |            |   |   |                  |   |   |              |   |
|------------------------------------------------|--------|--------|--------|--------|----------------|--------|--------|-----------------|--------|--------|-----------------------|--------|--------|-------------------|--------|
|                                           |   |   |   |   | Weighted       |   |   | Weighted        |   |   | Weighted              |   |   | Aggregate         |   |
|                                           |   |   |   |   | Average        |   |   | Average         |   |   | Average               |   |   | Intrinsic         |   |
|                                           |   | Number |   |   | Exercise       |   |   | Fair Value |   |   | Remaining             |   |   | Value             |   |
| Outstanding Grants 2009                        |   | (000') |   |   | Price CAD |   |   | CAD             |   |   | Contractual Life |   |   | Millions CAD |   |
| Balance, beginning of the period               |   |   | 5,271  |   |           | $      | 1.03   |            |   | $      | 0.43                  |   |   |              | 3.1    |   |   | $ | 0.3 |   |
| Granted                                        |   |   | 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    |   |   | $ | 0.6 |   |
| Vested and exercisable, end of the period      |   |   | 4,770  |   |           | $      | 0.91   |            |   | $      | 0.36                  |   |   |              | 2.9    |   |   | $ | 0.4 |   |
| Vested and expected to vest, end of the period |   |   | 6,951  |   |           | $      | 0.82   |            |   | $      | 0.33                  |   |   |              | 3.4    |   |   | $ | 0.6 |   |

| Exercise Price CAD |   |   | Options Outstanding |   |   | Options Exercisable |   |
|--------------------|--------|--------|---------------------|--------|--------|---------------------|--------|
| Low                |   |   | High                |   |   | Quantity            |   |   | WeightedAverageRemainingContractualLife |   |   | WeightedAverageExercisePrice CAD |   |   | Quantity |   |   | WeightedAverageRemainingContractualLife |   |   | WeightedAverageExercisePrice CAD |   |
| $                  | 0.40   |   |                | $      | 0.55   |                |   |   | 1,940,000 |   |   |   | 3.0 |   |   | $ | 0.45 |   |   |   | 1,922,500 |   |   |   | 3.0 |   |   | $ | 0.45 |   |
|               | 0.56   |   |                |   | 0.70   |                |   |   | 4,458,000 |   |   |   | 4.5 |   |   |   | 0.63 |   |   |   | 2,206,837 |   |   |   | 4.3 |   |   |   | 0.64 |   |
|               | 0.71   |   |                |   | 0.85   |                |   |   | 240,000 |   |   |   | 4.0 |   |   |   | 0.71 |   |   |   | 160,000 |   |   |   | 4.0 |   |   |   | 0.71 |   |
|               | 0.86   |   |                |   | 1.36   |                |   |   | 1,480,640 |   |   |   | 0.6 |   |   |   | 1.34 |   |   |   | 1,480,640 |   |   |   | 0.6 |   |   |   | 1.34 |   |
|               |   |   |                |   |   |                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| $                  | 0.40   |   |                | $      | 1.36   |                |   |   | 8,118,640 |   |   |   | 3.4 |   |   | $ | 0.72 |   |   |   | 5,769,977 |   |   |   | 2.9 |   |   | $ | 0.76 |   |

----

| 21. | Earnings per share: |
|-----|---------------------|

| 22. | Recently issued Financial Accounting Standards: |
|-----|-------------------------------------------------|

----

| 23. | Differences between Canadian and United States Generally Accepted Accounting Principles: |
|-----|------------------------------------------------------------------------------------------|

----

| As of December 31,                                    |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|-------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| (a)  Assets                                 |   |   |       |   |   |   |       |   |   |
| Total assets - Canadian GAAP                          |   | $      | 80,120,900 |   |   | $      | 79,857,300 |   |   | $ | 67,411,600 |   |
| US GAAP adjustment - transaction costs                |   |   | 643,900    |   |   |   | 1,122,100  |   |   |   | - |   |
| Total assets - US GAAP                                |   | $      | 80,764,800 |   |   | $      | 80,979,400 |   |   | $ | 67,411,600 |   |
|                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| (b)  Liabilities                            |   |   |       |   |   |   |       |   |   |   |   |   |
| Total liabilities - Canadian GAAP                     |   | $      | 26,069,500 |   |   | $      | 25,819,900 |   |   | $ | 8,137,000 |   |
| US GAAP adjustment - option/warrant/transaction costs |   |   | 1,123,100  |   |   |   | 1,842,500  |   |   |   | 211,100 |   |
| Total liabilities - US GAAP                           |   | $      | 27,192,600 |   |   | $      | 27,662,400 |   |   | $ | 8,348,100 |   |
|                                                  |   |   |       |   |   |   |       |   |   |   |   |   |
| (c)  Shareholders' equity                   |   |   |       |   |   |   |       |   |   |   |   |   |
| Total shareholders' equity - Canadian GAAP            |   | $      | 54,051,400 |   |   | $      | 54,037,400 |   |   | $ | 59,274,600 |   |
| US GAAP adjustment - option/warrant liabilities       |   |   | (479,200   | )      |   |   | (720,400   | )      |   |   | (211,100 | ) |
| Total shareholders' equity - US GAAP                  |   | $      | 53,572,200 |   |   | $      | 53,317,000 |   |   | $ | 59,063,500 |   |

| For the Years Ended December 31,                          |   | 2010   |       |   | 2009   |   |       | 2008   |   |
|-----------------------------------------------------------|--------|--------|------------|--------|--------|--------|------------|--------|--------|
| (d) Operations                                            |   |   |       |   |   |   |       |   |   |
| Net loss - Canadian GAAP                                  |   | $      | (8,796,800 | )      |   | $      | (5,960,100 | )      |   | $ | 15,805,000 |   |
| US GAAP adjustment - net option/warrant expense           |   |   | 8,700      |   |   |   | (351,500   | )      |   |   | 285,500 |   |
| Net income (loss) under U.S. GAAP                         |   | $      | (8,788,100 | )      |   | $      | (6,311,600 | )      |   | $ | 16,090,500 |   |
|                                                      |   |   |       |   |   |   |       |   |   |   |   |   |
| (e) Earnings per share                                    |   |   |       |   |   |   |       |   |   |   |   |   |
| Basic and diluted income (loss) per share - Canadian GAAP |   | $      | (0.10      | )      |   | $      | (0.07      | )      |   | $ | 0.20 |   |
| US GAAP adjustment - net option/warrant expense           |   |   | -          |   |   |   | -          |   |   |   | - |   |
| Basic and diluted income (loss) per share - US GAAP       |   | $      | (0.10      | )      |   | $      | (0.07      | )      |   | $ | 0.20 |   |
|                                                      |   |   |       |   |   |   |       |   |   |   |   |   |
| (f) Cash flows from operating activities                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Operating activities - Canadian GAAP                      |   | $      | (4,740,800 | )      |   | $      | (9,578,500 | )      |   | $ | (5,778,400 | ) |
| US GAAP adjustment - net option/warrant expense           |   |   | -          |   |   |   | -          |   |   |   | - |   |
| Operating activities - US GAAP                            |   | $      | (4,740,800 | )      |   | $      | (9,578,500 | )      |   | $ | (5,778,400 | ) |
|                                                      |   |   |       |   |   |   |       |   |   |   |   |   |
| (g) Cash flows from investing activities                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Investing activities - Canadian GAAP                      |   | $      | (2,000,200 | )      |   | $      | (7,897,300 | )      |   | $ | 18,484,200 |   |
| US GAAP adjustment - none                                 |   |   | -          |   |   |   | -          |   |   |   | - |   |
| Investing activities - US GAAP                            |   | $      | (2,000,200 | )      |   | $      | (7,897,300 | )      |   | $ | 18,484,200 |   |
|                                                      |   |   |       |   |   |   |       |   |   |   |   |   |
| (h) Cash flows from financing activities                  |   |   |       |   |   |   |       |   |   |   |   |   |
| Financing activities - Canadian GAAP                      |   | $      | 3,261,100  |   |   | $      | 13,820,000 |   |   | $ | 495,600 |   |
| US GAAP adjustment - none                                 |   |   | -          |   |   |   | -          |   |   |   | - |   |
| Financing activities - US GAAP                            |   | $      | 3,261,100  |   |   | $      | 13,820,000 |   |   | $ | 495,600 |   |

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| 24. | Subsequent Events: |
|-----|--------------------|

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