|                         |                              |
|-------------------------|------------------------------|
|                    |                         |
| Neil McMillan           | Rick Johnson, C.A.           |
| President &         | Vice President Finance & |
| Chief Executive Officer | Chief Financial Officer      |

----

----

|                                                                                           |   | 2009   |    |   | 2008   |   |
|------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
| Assets                                                                                         |   |   |    |   |   |   |
|     Current assets:                                                        |   |   |    |   |   |   |
|        Cash and cash equivalents                            |   | $      | 11,948  |   |   | $      | 8,390 |   |
|        Accounts receivable                                  |   |   | 4,806   |   |   |   | 275 |   |
|        Interest receivable on restricted promissory notes   |   |   | 4,866   |   |   |   | 4,830 |   |
|        Inventories and stockpiled ore (Note 4)              |   |   | 11,448  |   |   |   | 10,028 |   |
|        Shrinkage stope platform costs (Note 5)              |   |   | 11,293  |   |   |   | 12,091 |   |
|        Prepaids                                             |   |   | 327     |   |   |   | 193 |   |
|        Assets held for sale (Note 7)                        |   |   | 570     |   |   |   | 912 |   |
|                                                                                           |   |   | 45,258  |   |   |   | 36,719 |   |
|                                                                                           |   |   |    |   |   |   |   |   |
|     Mineral properties (Note 6)                                            |   |   | 94,170  |   |   |   | 89,038 |   |
|     Assets held for sale (Note 7)                                          |   |   | 4,505   |   |   |   | 4,857 |   |
|     Investments (Note 8)                                                   |   |   | 643     |   |   |   | 607 |   |
|     Deposits for reclamation costs (Note 14)                               |   |   | 2,277   |   |   |   | 2,277 |   |
|     Restricted promissory notes (Note 9)                                   |   |   | 82,568  |   |   |   | 81,938 |   |
|                                                                                           |   | $      | 229,421 |   |   | $      | 215,436 |   |
|                                                                                           |   |   |    |   |   |   |   |   |
| Liabilities and Shareholders’ Equity                                                     |   |   |    |   |   |   |   |   |
|     Current liabilities:                                                   |   |   |    |   |   |   |   |   |
|        Accounts payable and accrued liabilities             |   | $      | 4,100   |   |   | $      | 5,794 |   |
|        Interest payable on royalty obligations              |   |   | 4,729   |   |   |   | 4,709 |   |
|        Demand loans (Note 10)                               |   |   | 4,586   |   |   |   | 3,969 |   |
|        Liabilities related to assets held for sale (Note 7) |   |   | 370     |   |   |   | 732 |   |
|        Other liabilities (Note 12)                          |   |   | 2,942   |   |   |   | 2,307 |   |
|                                                                                           |   |   | 16,727  |   |   |   | 17,511 |   |
|                                                                                           |   |   |    |   |   |   |   |   |
|     Obligations under capital lease (Note 13)                              |   |   | 1,240   |   |   |   | 1,614 |   |
|     Debenture (Note 11)                                                    |   |   | 9,192   |   |   |   | 16,575 |   |
|     Royalty obligations (Note 9)                                           |   |   | 83,554  |   |   |   | 83,130 |   |
|     Deferred revenue (Note 9)                                              |   |   | 5,531   |   |   |   | 6,434 |   |
|     Liabilities related to assets held for sale (Note 7)                   |   |   | 117     |   |   |   | 342 |   |
|     Asset retirement obligations (Note 14)                                 |   |   | 2,965   |   |   |   | 2,758 |   |
|                                                                                           |   |   | 119,326 |   |   |   | 128,364 |   |
|                                                                                           |   |   |    |   |   |   |   |   |
|     Shareholders’ equity:                                            |   |   |    |   |   |   |   |   |
|        Share capital (Note 15)                              |   |   | 111,957 |   |   |   | 83,960 |   |
|        Contributed surplus                                  |   |   | 2,465   |   |   |   | 1,748 |   |
|        Retained earnings (deficit)                          |   |   | (4,361  | )      |   |   | 1,896 |   |
|        Accumulated other comprehensive income (loss)        |   |   | 34      |   |   |   | (532 | ) |
|                                                                                           |   |   | 110,095 |   |   |   | 87,072 |   |
|                                                                                           |   |   |    |   |   |   |   |   |
|     Subsequent Event (Note 21)                                             |   |   |    |   |   |   |   |   |
|                                                                                           |   | $      | 229,421 |   |   | $      | 215,436 |   |

|              |                           |
|--------------|---------------------------|
|         |                      |
| Josef Spross | Ronald J. Hicks, CA       |
| Chairman     | Chairman, Audit Committee |

----

|                                                                         |   |   |    |   |   |   |
|------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                         |   | 2009   |    |   | 2008   |   |
|                                                                         |   |   |    |   |   |   |
| Revenue                                                                      |   | $      | 48,525  |   |   | $      | 40,999 |   |
|                                                                         |   |   |    |   |   |   |   |   |
| Expenses:                                                                    |   |   |    |   |   |   |   |   |
|     Operating expenses                                   |   | $      | 30,491  |   |   | $      | 32,166 |   |
|     Depreciation, depletion and accretion                |   |   | 19,593  |   |   |   | 12,524 |   |
|     General and administrative                           |   |   | 4,629   |   |   |   | 4,657 |   |
|     Interest and other (Note 16)                         |   |   | (458    | )      |   |   | 1,325 |   |
|     Write-down of mineral properties                     |   |   | 1,067   |   |   |   | 862 |   |
|     Loss (gain) on investments                           |   |   | 664     |   |   |   | (166 | ) |
|                                                                         |   |   | 55,986  |   |   |   | 51,368 |   |
|                                                                         |   |   |    |   |   |   |   |   |
| Loss from continuing operations before income taxes                          |   |   | (7,461  | )      |   |   | (10,369 | ) |
|     Income taxes (Note 17)                               |   |   | -       |   |   |   | 2,240 |   |
|                                                                         |   |   |    |   |   |   |   |   |
| Loss from continuing operations                                              |   |   | (7,461  | )      |   |   | (8,129 | ) |
|                                                                         |   |   |    |   |   |   |   |   |
| Earnings from operations held for sale (Note 7)                              |   |   | 1,204   |   |   |   | 8,512 |   |
| Net earnings (loss)                                                          |   | $      | (6,257  | )      |   | $      | 383 |   |
|                                                                         |   |   |    |   |   |   |   |   |
| Net loss per share (Note 18)                                                 |   |   |    |   |   |   |   |   |
|     Basic and diluted                                    |   |   |    |   |   |   |   |   |
|        From continuing operations         |   | $      | (0.07   | )      |   | $      | (0.08 | ) |
|        Net earnings (loss)           |   | $      | (0.06   | )      |   | $      | 0.00 |   |
|                                                                         |   |   |    |   |   |   |   |   |
| Weighted average number of common shares outstanding (000’s) (Note 18) |   |   |    |   |   |   |   |   |
|                                                                         |   |   |    |   |   |   |   |   |
| Basic                                                                        |   |   | 108,504 |   |   |   | 97,100 |   |
| Diluted                                                                      |   |   | 108,504 |   |   |   | 97,301 |   |

|                                                                                                       |   | 2009   |   |   | 2008   |   |
|------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                       |   |   |   |   |   |   |
| Net earnings (loss)                                                                                        |   | $      | (6,257 | )      |   | $      | 383 |   |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss)                                                                          |   |   |   |   |   |   |   |   |
|     Losses (gains) on available-for-sale securities transferred to net earnings (loss) |   |   | 664    |   |   |   | (166 | ) |
|     Unrealized loss on available-for-sale securities                                   |   |   | (98    | )      |   |   | (61 | ) |
|                                                                                                       |   |   |   |   |   |   |   |   |
| Other comprehensive income (loss)                                                                          |   |   | 566    |   |   |   | (227 | ) |
| Total comprehensive income (loss)                                                                          |   | $      | (5,691 | )      |   | $      | 156 |   |

----

|                                                                                              |   | 2009   |    |   | 2008   |   |
|---------------------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                                              |   |   |    |   |   |   |
| Share Capital (Note 15)                                                                           |   |   |    |   |   |   |
|     Balance, beginning of year                                                |   | $      | 83,960  |   |   | $      | 85,591 |   |
|     Common shares and warrants, issued for cash                               |   |   | 27,970  |   |   |   | - |   |
|     Flow-through renunciation                                                 |   |   | -       |   |   |   | (2,240 | ) |
|     Fair value of warrants issued                                             |   |   | -       |   |   |   | 550 |   |
|     Other                                                                     |   |   | 27      |   |   |   | 59 |   |
|     Balance, end of year                                                      |   | $      | 111,957 |   |   | $      | 83,960 |   |
|                                                                                              |   |   |    |   |   |   |   |   |
| Contributed Surplus                                                                               |   |   |    |   |   |   |   |   |
|     Balance, beginning of year                                                |   | $      | 1,748   |   |   | $      | 1,308 |   |
|     Stock-based compensation                                                  |   |   | 745     |   |   |   | 449 |   |
|     Other                                                                     |   |   | (28     | )      |   |   | (9 | ) |
|     Balance, end of year                                                      |   | $      | 2,465   |   |   | $      | 1,748 |   |
|                                                                                              |   |   |    |   |   |   |   |   |
| Retained Earnings (Deficit)                                                                       |   |   |    |   |   |   |   |   |
|     Balance, beginning of year                                                |   | $      | 1,896   |   |   | $      | 1,513 |   |
|     Net earnings (loss)                                                       |   |   | (6,257  | )      |   |   | 383 |   |
|     Balance, end of year                                                      |   | $      | (4,361  | )      |   | $      | 1,896 |   |
|                                                                                              |   |   |    |   |   |   |   |   |
| Accumulated Other Comprehensive Income (Loss)                                                     |   |   |    |   |   |   |   |   |
|     Balance, beginning of year                                                |   | $      | (532    | )      |   |   | (305 | ) |
|     Other comprehensive income (loss)                                         |   |   | 566     |   |   |   | (227 | ) |
|     Balance, end of year (1)                                                  |   | $      | 34      |   |   | $      | (532 | ) |
|                                                                                              |   |   |    |   |   |   |   |   |
|     Total retained earnings and accumulated other comprehensive income (loss) |   | $      | (4,327  | )      |   | $      | 1,364 |   |
|                                                                                              |   |   |    |   |   |   |   |   |
| Shareholders’ equity, end of year                                                           |   | $      | 110,095 |   |   | $      | 87,072 |   |

----

|                                                                               |   | 2009   |    |   | 2008   |   |
|------------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                               |   |   |    |   |   |   |
| Cash provided from (used in):                                                      |   |   |    |   |   |   |
|                                                                               |   |   |    |   |   |   |
| Operations:                                                                        |   |   |    |   |   |   |
|     Loss from continuing operations                            |   | $      | (7,461  | )      |   | $      | (8,129 | ) |
|     Non-cash items:                                            |   |   |    |   |   |   |   |   |
|        Depreciation, depletion and accretion    |   |   | 19,593  |   |   |   | 12,524 |   |
|        Loss (gain) on sale of investments       |   |   | 664     |   |   |   | (166 | ) |
|        Stock-based compensation                 |   |   | 745     |   |   |   | 449 |   |
|        Write-down of mineral properties         |   |   | 1,067   |   |   |   | 862 |   |
|        Interest and other                       |   |   | (634    | )      |   |   | (816 | ) |
|        Income taxes                             |   |   | -       |   |   |   | (2,240 | ) |
|     Net changes in non-cash operating working capital:         |   |   |    |   |   |   |   |   |
|        Accounts receivable                      |   |   | (4,567  | )      |   |   | 539 |   |
|        Inventories and stockpiled ore           |   |   | (1,745  | )      |   |   | (1,291 | ) |
|        Shrinkage stope platform costs           |   |   | 798     |   |   |   | (1,219 | ) |
|        Prepaids                                 |   |   | (134    | )      |   |   | 188 |   |
|        Accounts payable and accrued liabilities |   |   | (1,674  | )      |   |   | 3,152 |   |
|     Cash provided by continuing operations                     |   |   | 6,652   |   |   |   | 3,853 |   |
|     Cash provided by operations held for sale (Note 7)         |   |   | 985     |   |   |   | 2,336 |   |
|                                                                               |   |   | 7,637   |   |   |   | 6,189 |   |
|                                                                               |   |   |    |   |   |   |   |   |
| Investing:                                                                         |   |   |    |   |   |   |   |   |
|     Mineral properties                                         |   |   | (25,260 | )      |   |   | (26,561 | ) |
|     Assets held for sale                                       |   |   | (115    | )      |   |   | (1,097 | ) |
|     Proceeds on disposition of assets held for sale            |   |   | 440     |   |   |   | 11,230 |   |
|     Restricted promissory notes                                |   |   | (630    | )      |   |   | (332 | ) |
|     Investments                                                |   |   | (134    | )      |   |   | 473 |   |
|     Cash used in investing                                     |   |   | (25,699 | )      |   |   | (16,287 | ) |
|                                                                               |   |   |    |   |   |   |   |   |
| Financing:                                                                         |   |   |    |   |   |   |   |   |
|     Issue of common shares and warrants, net of issue costs    |   |   | 27,970  |   |   |   | 50 |   |
|     Debenture:                                                 |   |   |    |   |   |   |   |   |
|        Proceeds, net of issue costs             |   |   | -       |   |   |   | 16,972 |   |
|        Amortized cost of redemption             |   |   | (7,606  | )      |   |   | - |   |
|     Royalty obligations                                        |   |   | 424     |   |   |   | 351 |   |
|     Demand loans:                                              |   |   |    |   |   |   |   |   |
|        Proceeds                                 |   |   | 2,800   |   |   |   | - |   |
|        Repayments                               |   |   | (2,183  | )      |   |   | (2,046 | ) |
|     Obligations under capital lease:                           |   |   |    |   |   |   |   |   |
|        Proceeds                                 |   |   | 2,353   |   |   |   | 2,071 |   |
|        Repayments                               |   |   | (2,138  | )      |   |   | (1,538 | ) |
|     Cash provided by financing activities                      |   |   | 21,620  |   |   |   | 15,860 |   |
| Increase in cash and cash equivalents                                              |   |   | 3,558   |   |   |   | 5,762 |   |
| Cash and cash equivalents, beginning of year                                       |   |   | 8,390   |   |   |   | 2,628 |   |
| Cash and cash equivalents, end of year                                             |   | $      | 11,948  |   |   | $      | 8,390 |   |

|                                             |   |   |   |   |   |   |
|--------------------------------------------------|--------|--------|--------|--------|--------|--------|
| Cash and cash equivalents comprised of:          |   |   |   |   |   |   |
|     Cash                     |   | $      | 22     |   |   | $      | 9,963 |   |
|     Less outstanding cheques |   |   | (974   | )      |   |   | (1,573 | ) |
|     Term deposits            |   |   | 12,900 |   |   |   | - |   |
|                                             |   | $      | 11,948 |   |   | $      | 8,390 |   |

|                                  |   |   |   |   |   |   |
|---------------------------------------|--------|--------|--------|--------|--------|--------|
| Supplemental cash flow disclosure:    |   |   |   |   |   |   |
|     Interest paid |   | $      | 2,132  |   |   | $      | 1,997 |   |

----

----

|   | • | Accounts receivable and Restricted promissory notes relating to the Red Mile Resources Limited Partnerships are designated as loans and receivables and are accounted for at amortized cost. |
|--------|---------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Deposits for reclamation costs, designated as held to maturity, consist of investment certificates held as security for reclamation requirements and are carried at amortized cost. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | • | Derivative financial instruments, which include foreign exchange and gold derivative contracts, are not designated as hedges.  These instruments are recorded using the mark-to-market method of accounting whereby instruments are recorded in the consolidated balance sheets as either an asset or liability with changes in fair value recognized in net earnings (loss). |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                   |   | 2009   |   |   | 2008   |   |
|------------------------|--------|--------|--------|--------|--------|--------|
|                   |   |   |   |   |   |   |
| Gold in-circuit        |   | $      | 2,126  |   |   | $      | 1,471 |   |
| Stockpiled ore         |   |   | 1,140  |   |   |   | 625 |   |
| Materials and supplies |   |   | 8,182  |   |   |   | 7,932 |   |
|                   |   | $      | 11,448 |   |   | $      | 10,028 |   |

|                 |   | 2009   |   |   | 2008   |   |
|----------------------|--------|--------|--------|--------|--------|--------|
|                 |   |   |   |   |   |   |
| Stope platform costs |   | $      | 11,293 |   |   | $      | 12,091 |   |

|                                            |   |   |    |   | Accumulated   |   |    |   |   |   |   |   |   | Accumulated   |    |   |   |   |
|-------------------------------------------------|--------|--------|---------|--------|---------------|--------|---------|--------|--------|--------|--------|--------|--------|---------------|---------|--------|--------|--------|
|                                            |   |   |    |   | depreciation, |   |    |   |   |   |   |   |   | depreciation, |    |   |   |   |
|                                            |   |   |    |   | depletion and |   |    | 2009   |   |   |   |   |   | depletion and |    |   | 2008   |   |
|                                            |   | Cost   |    |   | write-down    |   |    | Net    |   |   | Cost   |   |   | write-down    |    |   | Net    |   |
|                                            |   |   |    |   |          |   |    |   |   |   |   |   |   |          |    |   |   |   |   |   |   |   |   |   |
| Property acquisition and mine development costs |   | $      | 111,592 |   |          | $      | 83,063  |   |   | $      | 28,529 |   |   | $             | 102,337 |   |   | $      | 71,229 |   |   | $ | 31,108 |   |
| Buildings, plant and equipment                  |   |   | 93,866  |   |          |   | 75,856  |   |   |   | 18,010 |   |   |          | 91,308  |   |   |   | 68,629 |   |   |   | 22,679 |   |
| Exploration properties                          |   |   | 54,685  |   |          |   | 7,054   |   |   |   | 47,631 |   |   |          | 41,311  |   |   |   | 6,060 |   |   |   | 35,251 |   |
|                                            |   | $      | 260,143 |   |          | $      | 165,973 |   |   | $      | 94,170 |   |   | $             | 234,956 |   |   | $      | 145,918 |   |   | $ | 89,038 |   |

----

|                                     |   | 2009   |   |   | 2008   |   |
|------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                     |   |   |   |   |   |   |
| Assets                                   |   |   |   |   |   |   |
| Accounts receivable                      |   | $      | 570    |   |   | $      | 770 |   |
| Prepaids                                 |   |   | -      |   |   |   | 142 |   |
|                                     |   |   | 570    |   |   |   | 912 |   |
|                                     |   |   |   |   |   |   |   |   |
| Oil and natural gas properties           |   |   | 4,505  |   |   |   | 4,715 |   |
| Deposits for reclamation costs (Note 14) |   |   | -      |   |   |   | 142 |   |
|                                     |   |   | 4,505  |   |   |   | 4,857 |   |
|                                     |   |   |   |   |   |   |   |   |
|                                     |   | $      | 5,075  |   |   | $      | 5,769 |   |
|                                     |   |   |   |   |   |   |   |   |
| Liabilities                              |   |   |   |   |   |   |   |   |
| Accounts payable and accrued liabilities |   | $      | 370    |   |   | $      | 732 |   |
| Asset retirement obligations (Note 14)   |   |   | 117    |   |   |   | 342 |   |
|                                     |   | $      | 487    |   |   | $      | 1,074 |   |

----

|                                                                   |   | 2009   |   |   | 2008   |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                   |   |   |   |   |   |   |
| Revenue                                                                |   | $      | 2,405  |   |   | $      | 7,357 |   |
| Less: royalties                                                        |   |   | (315   | )      |   |   | (2,782 | ) |
| Revenue, net of royalties                                              |   |   | 2,090  |   |   |   | 4,575 |   |
|                                                                   |   |   |   |   |   |   |   |   |
| Operating expenses                                                     |   |   | 1,085  |   |   |   | 2,141 |   |
| Depreciation, depletion, and accretion                                 |   |   | 47     |   |   |   | 619 |   |
|                                                                   |   |   | 1,132  |   |   |   | 2,760 |   |
|                                                                   |   |   |   |   |   |   |   |   |
| Earnings from operations held for sale                                 |   |   | 958    |   |   |   | 1,815 |   |
|                                                                   |   |   |   |   |   |   |   |   |
| Other income                                                           |   |   |   |   |   |   |   |   |
|                                                                   |   |   |   |   |   |   |   |   |
|     Asset retirement obligation change in estimate |   |   | 246    |   |   |   | 232 |   |
|     Gain on sale of assets                         |   |   | -      |   |   |   | 6,465 |   |
| Net earnings from operations held for sale                             |   | $      | 1,204  |   |   | $      | 8,512 |   |

|                                                                         |   | 2009   |   |   | 2008   |   |
|------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                         |   |   |   |   |   |   |
| Net earnings from operations held for sale                                   |   | $      | 1,204  |   |   | $      | 8,512 |   |
| Adjustments for:                                                             |   |   |   |   |   |   |   |   |
|     Depreciation, depletion, and accretion               |   |   | 47     |   |   |   | 619 |   |
|     Asset retirement obligation change in estimate       |   |   | (246   | )      |   |   | (232 | ) |
|     Gain on sale of assets                               |   |   | -      |   |   |   | (6,465 | ) |
|     Decrease in Accounts receivable                      |   |   | 200    |   |   |   | 284 |   |
|     Decrease in Prepaids                                 |   |   | 142    |   |   |   | 71 |   |
|     Decrease in Accounts payable and accrued liabilities |   |   | (362   | )      |   |   | (453 | ) |
|                                                                         |   | $      | 985    |   |   | $      | 2,336 |   |

|                                    |   |   |   |   | Accumulated   |   |   |   |   |   |   |   |   | Accumulated   |   |   |   |   |
|-----------------------------------------|--------|--------|--------|--------|---------------|--------|--------|--------|--------|--------|--------|--------|--------|---------------|--------|--------|--------|--------|
|                                    |   |   |   |   | depreciation, |   |   |   |   |   |   |   |   | depreciation, |   |   |   |   |
|                                    |   |   |   |   | depletion and |   |   | 2009   |   |   |   |   |   | depletion and |   |   | 2008   |   |
|                                    |   | Cost   |   |   | write-down    |   |   | Net    |   |   | Cost   |   |   | write-down    |   |   | Net    |   |
|                                    |   |   |   |   |          |   |   |   |   |   |   |   |   |          |   |   |   |   |
| Property acquisition and drilling costs |   | $      | 3,398  |   |          | $      | 1,276  |   |   | $      | 2,122  |   |   | $             | 11,533 |   |   | $      | 9,230 |   |   | $ | 2,303 |   |
| Gas plant and production equipment      |   |   | 5,253  |   |          |   | 2,870  |   |   |   | 2,383  |   |   |          | 6,561  |   |   |   | 4,149 |   |   |   | 2,412 |   |
|                                    |   | $      | 8,651  |   |          | $      | 4,146  |   |   | $      | 4,505  |   |   | $             | 18,094 |   |   | $      | 13,379 |   |   | $ | 4,715 |   |

|                                               |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                               |   |   |   |   |   |   |
| Available-for-sale securities, beginning of year   |   | $      | 607    |   |   | $      | 1,140 |   |
| Acquisition of available-for-sale securities       |   |   | 149    |   |   |   | 73 |   |
| Disposal of available-for-sale securities          |   |   | (15    | )      |   |   | (379 | ) |
| Unrealized (loss) on available-for-sale securities |   |   | (98    | )      |   |   | (227 | ) |
|                                               |   |   |   |   |   |   |   |   |
| Available-for-sale securities, end of year         |   | $      | 643    |   |   | $      | 607 |   |

----

----

|                       |   | 2009   |   |   | 2008   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|
|                       |   |   |   |   |   |   |
| Balance, beginning of year |   | $      | 81,938 |   |   | $      | 81,606 |   |
| Interest earned            |   |   | 630    |   |   |   | 332 |   |
| Balance, end of year       |   | $      | 82,568 |   |   | $      | 81,938 |   |

|                       |   | 2009   |   |   | 2008   |   |
|----------------------------|--------|--------|--------|--------|--------|--------|
|                       |   |   |   |   |   |   |
| Balance, beginning of year |   | $      | 83,130 |   |   | $      | 82,779 |   |
| Interest accrued           |   |   | 424    |   |   |   | 351 |   |
| Balance, end of year       |   | $      | 83,554 |   |   | $      | 83,130 |   |

----

|                                          |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                          |   |   |   |   |   |   |
| Balance, beginning of year                    |   | $      | 7,291  |   |   | $      | 8,260 |   |
| Indemnification fee income recognized         |   |   | (325   | )      |   |   | (311 | ) |
| Recognition of loan fees and prepaid interest |   |   | (532   | )      |   |   | (658 | ) |
| Balance, end of year                          |   |   | 6,434  |   |   |   | 7,291 |   |
| Less: current portion (Note 12)               |   |   | (903   | )      |   |   | (857 | ) |
|                                          |   | $      | 5,531  |   |   | $      | 6,434 |   |

|                                                                                                                 |   | 2009   |   |   | 2008   |   |
|----------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                                                                 |   |   |   |   |   |   |
| Demand loan, repayable in monthly payments of $83,350 including interest at 4.55 percent, due November 2010.    |   | $      | 2,727  |   |   | $      | - |   |
| Demand loan, repayable in monthly payments of $96,514 including interest at 5.99 percent, due February 2010.         |   |   | 192    |   |   |   | 1,302 |   |
| Demand loan, repayable in monthly payments of $83,333 plus interest at bank prime plus 1.50 percent, due August 2011 |   |   | 1,667  |   |   |   | 2,667 |   |
|                                                                                                                 |   | $      | 4,586  |   |   | $      | 3,969 |   |

|                                                                          |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                          |   |   |   |   |   |   |
| Debenture payable, beginning of year                                          |   | $      | 16,575 |   |   | $      | - |   |
| Debenture proceeds                                                            |   |   | -      |   |   |   | 18,095 |   |
| Less:                                                                         |   |   |   |   |   |   |   |   |
|     Debt issue costs and amortization of debt issue costs |   |   | 223    |   |   |   | (970 | ) |
|     Warrant valuation                                     |   |   | -      |   |   |   | (550 | ) |
|     Amortized cost of debenture redemption                |   |   | (7,606 | )      |   |   | - |   |
| Debenture payable, end of year                                                |   | $      | 9,192  |   |   | $      | 16,575 |   |

----

|                                      |   | 2009   |   |   | 2008   |   |
|-------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                      |   |   |   |   |   |   |
| Deferred revenue (Note 9)                 |   | $      | 903    |   |   | $      | 857 |   |
| Obligations under capital lease (Note 13) |   |   | 2,039  |   |   |   | 1,450 |   |
|                                      |   | $      | 2,942  |   |   | $      | 2,307 |   |

|                                            |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                            |   |   |   |   |   |   |
| Gold:                                           |   |   |   |   |   |   |
| Asset retirement obligations, beginning of year |   | $      | 2,758  |   |   | $      | 2,566 |   |
| Accretion expense                               |   |   | 207    |   |   |   | 192 |   |
| Asset retirement obligations, end of year       |   | $      | 2,965  |   |   | $      | 2,758 |   |

|                                            |   | 2009   |   |   | 2008   |   |
|-------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                            |   |   |   |   |   |   |
| Assets held for sale (Note 7):                  |   |   |   |   |   |   |
| Asset retirement obligations, beginning of year |   | $      | 342    |   |   | $      | 641 |   |
| Accretion expense                               |   |   | 21     |   |   |   | 35 |   |
| Revisions due to sale of properties             |   |   | (246   | )      |   |   | (334 | ) |
| Asset retirement obligations, end of year       |   | $      | 117    |   |   | $      | 342 |   |

----

|                                  |   |   |        |   | 2009   |   |    |   |   |   | 2008       |   |
|---------------------------------------|--------|--------|-------------|--------|--------|--------|---------|--------|--------|--------|------------|--------|
|                                  |   | Shares |        |   | Amount |   |    | Shares |   |   | Amount     |   |
|                                  |   |   |        |   |   |   |    |   |   |   |       |   |
| Common shares:                        |   |   |        |   |   |   |    |   |   |   |       |   |
|                                  |   |   |        |   |   |   |    |   |   |   |       |   |
| Outstanding, beginning of year        |   |   | 97,112,030  |   |   | $      | 83,410  |   |   |   | 96,997,397 |   |   | $ | 85,591 |   |
| ESPP (a)                              |   |   | 421,056     |   |   |   | 177     |   |   |   | 114,633    |   |   |   | 159 |   |
| Exercise of stock options (b)         |   |   | 13,500      |   |   |   | 3       |   |   |   | -          |   |   |   | - |   |
| Equity issue (c)                      |   |   | 8,599,100   |   |   |   | 5,546   |   |   |   | -          |   |   |   | - |   |
| Flow-through shares (c)               |   |   | 5,333,000   |   |   |   | 4,266   |   |   |   | -          |   |   |   | - |   |
| Issue costs                           |   |   | -           |   |   |   | (1,028  | )      |   |   | -          |   |   |   | - |   |
| Tax effect of flow-through shares (d) |   |   | -           |   |   |   | -       |   |   |   | -          |   |   |   | (2,240 | ) |
| Issue costs                           |   |   | -           |   |   |   | -       |   |   |   | -          |   |   |   | (100 | ) |
| Equity issue (e)                      |   |   | 5,000,000   |   |   |   | 900     |   |   |   | -          |   |   |   | - |   |
| Flow-through shares (e)               |   |   | 2,000,000   |   |   |   | 1,700   |   |   |   | -          |   |   |   | - |   |
| Issue costs                           |   |   | -           |   |   |   | (261    | )      |   |   | -          |   |   |   | - |   |
| Outstanding, end of year              |   |   | 118,478,686 |   |   |   | 94,713  |   |   |   | 97,112,030 |   |   |   | 83,410 |   |
|                                  |   |   |        |   |   |   |    |   |   |   |       |   |   |   |   |   |
| Warrants and other equity:            |   |   |        |   |   |   |    |   |   |   |       |   |   |   |   |   |
|                                  |   |   |        |   |   |   |    |   |   |   |       |   |   |   |   |   |
| Debenture purchase warrants (f)       |   |   |        |   |   |   | 550     |   |   |   |       |   |   |   | 550 |   |
| Common share purchase warrants (c)    |   |   |        |   |   |   | 903     |   |   |   |       |   |   |   | - |   |
| Broker purchase warrants (c)          |   |   |        |   |   |   | 232     |   |   |   |       |   |   |   | - |   |
| Common share purchase warrants (e)    |   |   |        |   |   |   | 2,700   |   |   |   |       |   |   |   | - |   |
| Special warrant issue (g)             |   |   |        |   |   |   | 13,800  |   |   |   |       |   |   |   | - |   |
| Issue costs                           |   |   |        |   |   |   | (941    | )      |   |   |       |   |   |   | - |   |
| Balance, end of year                  |   |   | 118,478,686 |   |   | $      | 111,957 |   |   |   | 97,112,030 |   |   | $ | 83,960 |   |

|              |   | 2009    |      |   | Average |   |   | 2008    |   |   | Average   |   |
|-------------------|--------|---------|-----------|--------|---------|--------|--------|---------|--------|--------|-----------|--------|
|              |   | Options |      |   | Price   |   |   | Options |   |   | Price     |   |
|              |   |    |      |   |    |   |   |    |   |   |      |   |
| Beginning of year |   |    | 3,541,335 |   |    | $      | 1.19   |    |   |   | 3,636,667 |   |   | $ | 1.27 |   |
| Options granted   |   |    | 701,828   |   |    |   | 0.80   |    |   |   | 583,000   |   |   |   | 0.92 |   |
| Options exercised |   |    | (13,500   | )      |    |   | 0.37   |    |   |   | -         |   |   |   | - |   |
| Options lapsed    |   |    | (970,635  | )      |    |   | 1.30   |    |   |   | (678,332  | )      |   |   | 1.38 |   |
|              |   |    |      |   |    |   |   |    |   |   |      |   |   |   |   |   |
| End of year       |   |    | 3,259,028 |   |    | $      | 1.08   |    |   |   | 3,541,335 |   |   | $ | 1.19 |   |

|         |   |   |        |      |      |   |   |      | Weighted Average |   |      |
|--------------|--------|--------|-------------|-----------|-----------|--------|--------|-----------|------------------|--------|-----------|
| Option Price |   |   | Number      |      |      | Number |   |      | Per Share        |   | Remaining |
| Per Share    |   |   | Outstanding |      |      | Vested |   |      | Exercise Price   |   | Life      |
|         |   |   |        |      |      |   |   |      |             |   |      |   |   |   |
| $0.34-$1.02  |   |   |        | 1,710,995 |      |   |   | 1,552,661 |             |   | $         | 0.71 |   | 6.61 years |
| $1.11-$1.47  |   |   |        | 658,033   |      |   |   | 641,366   |             |   |      | 1.21 |   | 6.67 years |
| $1.54-$2.10  |   |   |        | 890,000   |      |   |   | 890,000   |             |   |      | 1.69 |   | 7.16 years |
|         |   |   |        |      | 3,259,028 |   |   |      | 3,084,027        |   |      | $ | 1.08 |   | 6.77 years |

----

|              |   | December 31, 2009 |       |   | December 31, 2008 |   |
|-------------------|--------|-------------------|------------|--------|-------------------|--------|
|              |   | Number            |       |   | Price             |   |   | Expiry Date |   |   | Number |   |   | Price |   |   | Expiry Date |   |
| Beginning of year |   |              | 1,809,500  |   |              |   |   |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |
|              |   |              | -          |   |              | $      | - |   |   |   | - |   |   |   | 1,809,500 |   |   | $ | 1.60 |   |   | May 22, 2013 |   |
|              |   |              | 4,299,550  |   |              | $      | 0.90 |   |   | October 9, 2010 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|              |   |              | 696,605    |   |              | $      | 0.83 |   |   | April 9, 2011 |   |   |   | - |   |   |   | - |   |   |   | - |   |
|              |   |              | 5,000,000  |   |              | $      | 0.90 |   |   | November 16, 2012 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| End of year       |   |              | 11,805,655 |   |              |   | - |   |   |   | - |   |   |   | 1,809,500 |   |   |   | - |   |   |   | - |   |

|                                       |   | 2009   |   |    | 2008   |   |
|--------------------------------------------|--------|--------|--------|---------|--------|--------|
|                                       |   |   |   |    |   |   |
| Interest expense on long term debt         |   | $      | 1,800  |    |   | $      | 1,639 |   |
| Royalty expense                            |   |   | 5,405  |    |   |   | 5,304 |   |
| Other interest expense                     |   |   | 101    |    |   |   | 125 |   |
| Interest capitalized to mineral properties |   |   | (733   | )       |   |   | (605 | ) |
| Royalty income                             |   |   | (6,419 | )  |   |   | (6,187 | )  |
| Interest income and other                  |   |   | (612   | )       |   |   | (969 | ) |
| Interest and other                         |   | $      | (458   | )       |   | $      | 1,325 |   |

----

|                                                                        |   | 2009   |   |   | 2008   |   |
|-----------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
|                                                                        |   |   |   |   |   |   |
| Future income tax assets:                                                   |   |   |   |   |   |   |
|     Mineral properties(1)                               |   | $      | 1,438  |   |   | $      | (724 | ) |
|     Asset retirement obligations                        |   |   | 832    |   |   |   | 837 |   |
|     Share issue costs                                   |   |   | 844    |   |   |   | 369 |   |
|     Royalty obligation(1)                               |   |   | 1,904  |   |   |   | 2,017 |   |
|     Deferred revenue                                    |   |   | 1,737  |   |   |   | 1,968 |   |
|     Future income tax assets before valuation allowance |   |   | 6,755  |   |   |   | 4,467 |   |
| Valuation allowance                                                         |   |   | (6,755 | )      |   |   | (4,467 | ) |
| Future income tax assets                                                    |   | $      | -      |   |   | $      | - |   |

|                                                            |   | 2009   |   |    | 2008   |   |
|-----------------------------------------------------------------|--------|--------|--------|---------|--------|--------|
|                                                            |   |   |   |    |   |   |
| Earnings (loss) before income taxes                             |   | $      | (6,257 | )  |   | $      | (1,857 | ) |
| Combined federal and provincial tax rate                        |   |   | 31%    |    |   |   | 32% |   |
|     Expected tax expense (recovery)         |   |   | (1,940 | )       |   |   | (594 | ) |
| Increase (decrease) in taxes resulting from:                    |   |   |   |    |   |   |   |   |
|     Other permanent differences             |   |   | 232    |    |   |   | 119 |   |
|     Effect of change in effective tax rates |   |   | 220    |    |   |   | (276 | ) |
|     Valuation allowance                     |   |   | 1,488  |    |   |   | (1,489 | ) |
|                                                            |   | $      | -      |    |   | $      | (2,240 | ) |

|                                                                         |   | 2009   |    |   | 2008   |   |
|------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                         |   |   |    |   |   |   |
| Basic earnings (loss) per share:                                             |   |   |    |   |   |   |
|                                                                         |   |   |    |   |   |   |
|     Net earnings (loss) available to common shareholders |   | $      | (6,257  | )      |   | $      | 383 |   |
|     Weighted average number of common shares outstanding |   |   | 108,504 |   |   |   | 97,100 |   |
| Basic net earnings (loss) per share                                          |   | $      | (0.06   | )      |   | $      | 0.00 |   |
|                                                                         |   |   |    |   |   |   |   |   |

|                                                                         |   | 2009   |    |   | 2008   |   |
|------------------------------------------------------------------------------|--------|--------|---------|--------|--------|--------|
|                                                                         |   |   |    |   |   |   |
| Diluted earnings (loss) per share:                                           |   |   |    |   |   |   |
|                                                                         |   |   |    |   |   |   |
|     Net earnings (loss) available to common shareholders |   | $      | (6,257  | )      |   | $      | 383 |   |
|     Weighted average number of common shares outstanding |   |   | 108,504 |   |   |   | 97,100 |   |
|     Dilutive effect of stock options                     |   |   | -       |   |   |   | 201 |   |
|     Weighted average number of common shares outstanding |   |   | 108,504 |   |   |   | 97,301 |   |
| Diluted net earnings (loss) per share                                        |   | $      | (0.06   | )      |   | $      | 0.00 |   |

----

| i) options outstanding on 2,875,335 shares with an average exercise price greater than the average market price of the Company’s common shares; and |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|                       |   | Payments/Commitments due by period |    |
|----------------------------|--------|------------------------------------|---------|
|                       |   | Total                              |    |   | Less than1 year |   |   | 2-3Years |   |   | 4-5Years |   |   | More than5 years |   |
|                       |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Contractual Obligation     |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |
|                       |   |                               |    |   |   |   |   |   |   |   |   |   |   |   |   |
| Demand loans               |   |                               | 4,586   |   |   |   | 3,919 |   |   |   | 667 |   |   |   | - |   |   |   | - |   |
| Interest on demand loans   |   |                               | 294     |   |   |   | 277 |   |   |   | 17 |   |   |   | - |   |   |   | - |   |
| Debenture                  |   |                               | 9,838   |   |   |   | - |   |   |   | - |   |   |   | 9,838 |   |   |   | - |   |
| Debenture interest         |   |                               | 4,003   |   |   |   | 1,181 |   |   |   | 2,361 |   |   |   | 461 |   |   |   | - |   |
| Capital lease obligations  |   |                               | 3,279   |   |   |   | 2,039 |   |   |   | 1,240 |   |   |   | - |   |   |   | - |   |
| Interest on capital leases |   |                               | 192     |   |   |   | 142 |   |   |   | 50 |   |   |   | - |   |   |   | - |   |
| Office lease               |   |                               | 513     |   |   |   | 97 |   |   |   | 219 |   |   |   | 197 |   |   |   | - |   |
| Flow-through expenditures  |   |                               | 3,599   |   |   |   | 3,599 |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Royalty payments(1)        |   |                               | 47,770  |   |   |   | 5,591 |   |   |   | 11,985 |   |   |   | 13,574 |   |   |   | 16,620 |   |
| Royalty obligations(1)     |   |                               | 83,554  |   |   |   | - |   |   |   | - |   |   |   | 21,112 |   |   |   | 62,442 |   |
|                       |   |                               | 157,628 |   |   |   | 16,845 |   |   |   | 16,539 |   |   |   | 45,182 |   |   |   | 79,062 |   |

----

|                                                                            |   | December 31   |   |   | December 31         |   |
|---------------------------------------------------------------------------------|--------|---------------|--------|--------|---------------------|--------|
|                                                                            |   | 2008          |   |   | 2008                |   |
|                                                                            |   | CarryingValue |   |   | EstimatedFair Value |   |   | CarryingValue |   |   | EstimatedFair Value |   |
|                                                                            |   |          |   |   |                |   |   |   |   |   |   |   |
| Loans and receivables                                                           |   |          |   |   |                |   |   |   |   |   |   |   |
|     Accounts receivable(1)                                  |   |          | 4,806  |   |                |   | 4,806 |   |   |   | 275 |   |   |   | 275 |   |
|     Interest receivable on restricted promissory note(1)    |   |          | 4,866  |   |                |   | 4,866 |   |   |   | 4,830 |   |   |   | 4,830 |   |
|     Restricted promissory note(2)                           |   |          | n/a    |   |                |   | n/a |   |   |   | n/a |   |   |   | n/a |   |
| Available-for-sale financial assets                                             |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
|     Investments (3)                                         |   |          | 643    |   |                |   | 643 |   |   |   | 607 |   |   |   | 607 |   |
| Held-for-trading                                                                |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
|     Cash and cash equivalents(1)                            |   |          | 11,948 |   |                |   | 11,948 |   |   |   | 8,390 |   |   |   | 8,390 |   |
|     Reclamation deposits(1)                                 |   |          | 2,277  |   |                |   | 2,277 |   |   |   | 2,277 |   |   |   | 2,277 |   |
|     Gold forward contract (4)                                    |   |          | (119   | )      |                |   |  (119 | )  |   |   | - |   |   |   | - |   |
|     Foreign currency forward contract (4)                        |   |          | 270    |   |                |   | 270 |   |   |   | - |   |   |   | - |   |
| Other financial assets                                                          |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
|     Assets held for sale (Note 7)(1)                        |   |          | 570    |   |                |   | 570 |   |   |   | 912 |   |   |   | 912 |   |
| Other financial liabilities                                                     |   |          |   |   |                |   |   |   |   |   |   |   |   |   |   |   |
|     Demand loans(1)                                         |   |          | 4,586  |   |                |   | 4,586 |   |   |   | 3,969 |   |   |   | 3,969 |   |
|     Accounts payable(1)                                     |   |          | 4,251  |   |                |   | 4,251 |   |   |   | 5,794 |   |   |   | 5,794 |   |
|     Liabilities related to assets held for sale (Note 7)(1) |   |          | 370    |   |                |   | 370 |   |   |   | 732 |   |   |   | 732 |   |
|     Interest payable on royalty obligations(1)              |   |          | 4,729  |   |                |   | 4,729 |   |   |   | 4,709 |   |   |   | 4,709 |   |
|     Debenture                                               |   |          | 9,192  |   |                |   | 9,838 |   |   |   | 16,575 |   |   |   | 18,095 |   |

----

|                            |   | 2009   |    |   | 2008   |   |
|---------------------------------|--------|--------|---------|--------|--------|--------|
|                            |   |   |    |   |   |   |
| Demand loan # 1 (Note 10)       |   | $      | 192     |   |   | $      | 1,302 |   |
| Demand loan # 2 (Note 10)       |   |   | 1,667   |   |   |   | 2,667 |   |
| Demand loan # 3 (Note 10)       |   |   | 2,727   |   |   |   | - |   |
| Debenture (Note 11)             |   |   | 9,192   |   |   |   | 16,575 |   |
| Total debt                      |   |   | 13,778  |   |   |   | 20,554 |   |
| Less: cash and cash equivalents |   |   | 11,948  |   |   |   | 8,390 |   |
| Net debt                        |   |   | 1,830   |   |   |   | 12,154 |   |
| Shareholders’ equity      |   |   | 110,095 |   |   |   | 87,072 |   |
| Total capital                   |   | $      | 111,925 |   |   | $      | 99,226 |   |

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