No securities regulatory authority has expressed an opinion
about these securities and it is an offence to claim otherwise.  This short form prospectus constitutes a public offering
of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted
to sell such securities. The securities offered hereby have not been and will not be registered under the United States Securities
Act of 1933, as amended (the "U.S. Securities Act”), or any state securities laws and may not be offered or sold
within the United States unless registered under the U.S. Securities Act and applicable state laws or an exemption from such registration
is available. This short form prospectus does not constitute an offer to buy any of these securities within the United States.
See "Plan of Distribution".


 


Information has been incorporated by reference in this
short form prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the
documents incorporated herein by reference may be obtained on request without charge from the Secretary of Atna Resources Ltd.
at Suite 250, 14142 Denver West Parkway, Golden, Colorado, 80401, telephone: 303.278.8464, and are also available electronically
at www.sedar.com.


 


Short Form Prospectus


 


	New Issue	September 4, 2012


 





 


C$15,000,000


15,000,000 Shares


 


Atna Resources Ltd. (the “Company” or “Atna”)
is filing this short form prospectus (“Prospectus”) to qualify the distribution (the “Offering”)
of 15,000,000 common shares of the Company (each, a “Share”) at a price of C$1.00 per Share (the “Offering
Price”). The Shares will be sold and issued pursuant to an underwriting agreement (the “Underwriting Agreement”)
dated as of August 27, 2012 among Canaccord Genuity Corp., NCP Northland Capital Partners Inc. (together, the “Underwriters”)
and the Company. The Offering Price was determined by negotiation between the Company and the Underwriters with reference to the
market price of the Common Shares. See “Plan of Distribution”. The Offering Price has been publically disclosed in
a press release of the Company dated August 21, 2012.


 


The Common Shares are listed and posted for trading on the Toronto
Stock Exchange (“TSX”) under the symbol “ATN”. On August 21, 2012, being the last day on which the
Common Shares traded prior to the announcement of the Offering, the closing price of the Common Shares on the TSX was C$1.07.


 


The TSX has conditionally approved the listing of (i) the Shares
and the Additional Shares (as hereinafter defined) and (ii) the Common Shares issuable pursuant to the exercise of the Broker
Warrants (as hereinafter defined). Listing is subject to the Company fulfilling all of the listing requirements of the TSX on
or before November 23, 2012. 


 




    	 



    	 



    

 


	 
	Price:  C$1.00 per Share
	 


 


	 	 	Price to the Public	 	 	
Underwriters’ Fee(1)	 	 	Net Proceeds
 to the Company(2)	 
	Per Share	 	C$	1.00	 	 	C$	0.06	 	 	C$	0.94	 
	Total(3)	 	C$	15,000,000	 	 	C$	900,000	 	 	C$	14,100,000	 



 





 



Notes: 


		(1)	The Company has agreed to pay the Underwriters a cash
fee (the “Underwriters’ Fee”) equal to 6.0% of the gross proceeds of the Offering and Over-Allotment
Option (as hereinafter defined), if applicable, and
reimburse the Underwriters for their expenses in connection with the Offering. The Company will also issue to the Underwriters
non-transferable warrants (the “Broker Warrants”) equal to 6.0% of the total number of Shares sold under the
Offering and the Over-Allotment Option, each Broker Warrant entitling the holder to acquire one Common Share at C$1.00 for a period
of 18 months after the Closing Date (as hereinafter defined).









 


		(2)	After deducting the Underwriters’ Fee, but before
deducting expenses of the Offering, including expenses in connection with the preparation and filing of this Prospectus, which
are estimated to be C$178,000 and which will be paid from the net proceeds of the Offering.



 


		(3)	The Company has granted the Underwriters an option (the
“Over-Allotment Option”), exercisable by the Underwriters in whole or in part at their sole discretion upon
giving written notice to the Company at any time until the date that is 30 days following the Closing Date, to purchase an additional
2,250,000 Shares (each, an “Additional Share”) on the same terms as set out above, to cover over-allotments,
if any, and for market stabilization purposes. A person who acquires Common Shares comprising the Additional Shares pursuant to
the exercise of the Over-Allotment Option acquires those securities under this Prospectus, regardless of whether the over-allotment
position is ultimately filled through the exercise of the Over-Allotment Option or secondary market purchases. If the Over-Allotment
Option is exercised in full, the total “Price to the Public”, “Underwriters’ Fee” and “Net
Proceeds to the Company” will be C$17,250,000, C$1,035,000 and C$16,215,000, respectively. See “Plan of Distribution”.



 


The Underwriters, as principals, conditionally offer the Shares,
subject to prior sale, if, as and when issued by the Company and accepted by the Underwriters, in accordance with the terms and
conditions contained in the Underwriting Agreement referred to under “Plan of Distribution” and subject to the approval
of certain legal matters on behalf of the Company by Bull, Housser & Tupper LLP and on
behalf of the Underwriters by Borden Ladner Gervais LLP. See “Plan of Distribution”.


 


	Underwriters’ Position	 	Maximum Size	 	Exercise Period	 	Exercise Price
	Over-Allotment Option	 	Option to purchase up to 2,250,000 Additional Shares	 	Up to 30 days following the Closing Date	 	Offering Price
	 	 	 	 	 	 	 
	Broker Warrants	 	Warrants to purchase up to 1,035,000 Common Shares(1)	 	Up to 18 months following the Closing Date	 	C$1.00
	 	 	 	 	 	 	 
	Total Securities Under Option	 	3,285,000	 	 	 	 



 





 



Note:


		(1)	Assuming the Over-Allotment Option is exercised in full.



 


This Prospectus qualifies the distribution of the Shares, the
grant of the Over-Allotment Option, the distribution of the Additional Shares issuable on exercise of the Over-Allotment Option,
the distribution of the Broker Warrants and the distribution of the Common Shares comprising the Broker Warrants.


 



    	 



    	 



    

 


Subscriptions for Shares will be received subject to rejection
or allotment in whole or in part and the right is reserved to close the subscription books at any time without notice. The completion
of the sale of securities pursuant to the Offering (the “Closing”) will take place on September 12, 2012, or
such other date as the Underwriters and the Company may mutually agree, but in any event not later than 42 days following the date
of a receipt for the final short form prospectus for the Offering (the “Closing Date”), and definitive certificates
representing the Shares will be available for delivery on the Closing Date. In connection with the Offering, the Underwriters may
over-allot or effect transactions that stabilize or maintain the market price of the Common Shares at levels other than those which
might otherwise prevail on the open market. Furthermore, the Underwriters may offer the Shares to the public at a price lower than
C$1.00 per Share. See “Plan of Distribution”.


 


The TSX has conditionally approved the listing of (i) the Shares
and the Additional Shares (as hereinafter defined) and (ii) the Common Shares issuable pursuant to the exercise of the Broker Warrants
(as hereinafter defined). Listing is subject to the Company fulfilling all of the listing requirements of the TSX on or before
November 23, 2012.


 


An investment in the securities being offered under this
Prospectus is highly speculative and involves significant risks that should be carefully considered by prospective investors. The
risks outlined in this Prospectus and in the documents incorporated herein by reference should be carefully reviewed and considered
in connection with an investment in such securities. See “Risk Factors” and “Forward-Looking Statements”.


 


The registered office of the Company is located at 3000 Royal
Centre, 1055 West Georgia Street, Vancouver, British Columbia, V6E 3R3. The head and principal office of the Company is located
at Suite 250, 14142 Denver West Parkway, Golden, Colorado, 80401.


 


The Chief Executive Officer, Chief Financial Officer and certain
of the directors of the Company who have signed the Certificate of the Company in this Prospectus reside outside of Canada. Although
each of the persons described above have appointed Bull, Housser & Tupper LLP as their
agent for service of process in British Columbia, it may not be possible for investors to enforce judgments obtained in Canada
against them.


 




    	 



    	 



    

 


TABLE OF CONTENTS


 


	FORWARD-LOOKING STATEMENTS	5
	ELIGIBILITY FOR INVESTMENT	7
	CURRENCY AND EXCHANGE RATE INFORMATION	7
	DOCUMENTS INCORPORATED BY REFERENCE	8
	ATNA RESOURCES LTD.	9
	MINERAL PROPERTIES	9
	CONSOLIDATED CAPITALIZATION	39
	USE OF PROCEEDS	39
	PLAN OF DISTRIBUTION	40
	DESCRIPTION OF SECURITIES TO BE DISTRIBUTED	43
	PRIOR SALES	44
	TRADING PRICE AND VOLUME	45
	RISK FACTORS	45
	OTHER MATERIAL FACTS	52
	AUDITOR, TRANSFER AGENT AND REGISTRAR	53
	EXPERTS	53
	STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION	54
	CONSENT OF AUDITORS	A-1
	CERTIFICATE OF THE COMPANY	A-2
	CERTIFICATE OF THE UNDERWRITERS	A-3


 




    	 



    	 



    

 


forward-looking
statements


 


This Prospectus and the documents incorporated by reference
herein contain “forward looking statements” within the meaning of applicable securities legislation. These forward-looking
statements are based on projections, expectations and estimates as of the date of this Prospectus or, in the case of documents
incorporated by reference herein, as of the date of such documents. Forward-looking statements are provided for the purpose of
providing information about management’s expectations and plans relating to the future. All of the forward-looking statements
made in this Prospectus are qualified by these cautionary statements.


 


Forward-looking statements may include, but are not limited
to, statements with respect to the future price of gold and silver, the estimation of mineral reserves and resources, the realization
of mineral reserve estimates, the timing and amount of estimated future production, anticipated costs of production, estimated
capital expenditures, estimated net present values, estimated internal rates of return, estimated operating costs, estimates of
capital costs, metallurgical recovery rates, success of exploration and development activities, mine development plans, currency
fluctuations, requirements for additional capital, government regulation of mining operations, environmental risks or claims and
the anticipated use of the proceeds of the Offering. In certain cases, forward-looking statements can be identified by the use
of words such as “plans”, “is planned”, “expects” or “does not expect”, “is
expected”, “is designed”, “budget”, “scheduled”, “estimates”, “projects”,
“forecasts”, “targets”, “intends”, “anticipates” or “does not anticipate”,
or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”,
“could”, “would”, “might” or “will be taken”, “occur” or “be
achieved”.


 


In particular, this Prospectus, the Annual Information Form
(as hereinafter defined) and other documents incorporated by reference herein contain forward-looking statements pertaining to
the following:


 


		·	any projections of earnings, revenues, synergies, cost savings or
other financial items;



		·	any statements of the plans, strategies and objectives of management
for future operations, including the development of the Reward gold mining property and development and initial production at the
Pinson gold mining property;



		·	any statements regarding future economic conditions or performance;



		·	any statements of belief; and



		·	any assumptions regarding the foregoing.



 


The actual results could differ materially from those anticipated
in these forward looking statements as a result of the risk factors set forth below and in the section of this Prospectus entitled
“Risk Factors”:


 


		·	fluctuations in gold and other metals prices;



		·	risks relating to the Company’s ability to generate material
revenues or obtain adequate financing for its planned exploration and development activities; 



		·	actual results of current exploration activities;



		·	conclusions of economic evaluations; 



		·	changes in project parameters as plans continue to be refined; 



		·	possible variations in ore reserves, grade or recovery rates; 



		·	failure of plant, equipment or processes to operate as anticipated;




		·	risks related to fluctuations in
the currency market; 



		·	risks related to the business being
subject to environmental laws and regulations which may increase costs of doing business and restrict the Company’s operations;




		·	delays in obtaining governmental approvals or financing or in the
completion of development or construction activities;



		·	risks related to hedging metal production and key operating inputs;



		·	risks related to operating hazards;



		·	risks related to the exploration, permitting, development and mining
of precious metals;



		·	risks related to estimation of reserves and resources;



 





    	5



    	 



    

 


		·	risks related to governmental regulation, including environmental
regulation;



		·	risks related to competition;



		·	risks related to joint ventures;



		·	uncertainty of capital costs, operating costs, production, metal recoveries
and economic returns;



		·	risks related to the uncertainty of the title of assets;



		·	the need to attract and retain qualified management and technical
personnel;



		·	risks related to reclamation activities on properties; and



		·	other risks described in the section entitled “Risk Factors”
in the Annual Information Form (as hereinafter defined) and in other documents incorporated by reference herein.



 


Forward looking statements provide information about management’s
current expectations and plans relating to anticipated future events, and are based on the Corporation’s current beliefs
and assumptions regarding, among other things:


 


		·	future gold and other metals prices;



		·	the overall success of the Company’s ability to generate material
revenues and to obtain adequate financing for its planned exploration and development activities; 



		·	actual results of current exploration activities;



		·	conclusions of economic evaluations; 



		·	changes in project parameters as plans continue to be refined; 



		·	future variations in ore reserves, grade or recovery rates; 



		·	failure of plant, equipment or processes to operate as anticipated;




		·	fluctuations in the currency market;




		·	the regulatory frame work governing
environmental laws and regulations; 



		·	possible delays in obtaining governmental approvals or financing or
in the completion of development or construction activities;



		·	hedging metal production and key operating inputs;



		·	operating hazards;



		·	the exploration, permitting, development and mining of precious metals;



		·	estimation of reserves and resources;



		·	capital costs, operating costs, production, metal recoveries and economic
returns; and



		·	the Company’s ability to attract and retain qualified management
and technical personnel.



 


Statements relating to mineral reserves and resources are deemed
to be forward looking statements, as they involve the implied assessment, based on certain estimates and assumptions, that the
mineral reserves and resources described exist in the quantities predicted or estimated and can be profitably produced in the future.
Estimated values of future net revenue do not represent fair market value. There is no certainty that it will be commercially viable
to produce any portion of the resources.


 


Although the Company has attempted to identify important factors
that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there
may be other factors that cause actions, events or results not to be as anticipated, estimated or intended. There can be no assurance
that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those
anticipated in such statements. The Company’s forward-looking statements are based on the beliefs, expectations and opinions
of management as of the date the statements are made, and the Company does not assume any obligation to update any forward-looking
statements if circumstances or management’s beliefs, expectations or opinions should change, except as required by law. For
the reasons set forth above, readers should not place undue reliance on forward-looking statements. Forward-looking statements
are made as of the date of this Prospectus and, other than as required by applicable securities laws, the Company assumes no obligation
to update or revise such forward-looking statements to reflect new events or circumstances.


 




    	6



    	 



    

 


ELIGIBILITY
FOR INVESTMENT


 


In the opinion of Bull, Housser & Tupper LLP, counsel to
the Company, and Borden Ladner Gervais LLP, counsel to the Underwriters, based on the current provisions of the Income Tax Act
(Canada) (the “Tax Act”) and the regulations thereunder, the Shares, if issued on the date hereof, would be
qualified investments under the Tax Act for trusts governed by registered retirement savings plans (“RRSPs”),
registered retirement income funds (“RRIFs”), deferred profit sharing plans, registered education savings plans,
registered disability savings plans and tax-free savings accounts (“TFSAs”), provided the Shares are listed
on a “designated stock exchange” as defined in the Tax Act (which includes the TSX).


 


Notwithstanding that the Shares may be a qualified investment
for a trust governed by a TFSA, an RRSP or a RRIF, the holder of a TFSA, or the annuitant of an RRSP or RRIF, as the case may be,
which acquires Shares will be subject to a penalty tax under the Tax Act if such Shares are a “prohibited investment”
for the particular TFSA, RRSP or RRIF for the purposes of the Tax Act. The Shares will be “prohibited investments”
for a TFSA, an RRSP or RRIF, if: (i) the holder of the TFSA, or the annuitant of the RRSP or RRIF, has a “significant interest”
(within the meaning of the Tax Act) in the Company; (ii) the holder of the TFSA, or the annuitant of the RRSP or RRIF, has a “significant
interest” (within the meaning of the Tax Act) in a corporation or partnership with which the Company does not deal at arm’s
length for the purposes of the Tax Act; or (iii) the holder of the TFSA, or the annuitant of the RRSP or RRIF, does not deal at
arm’s length with the Company for the purposes of the Tax Act. Investors should consult their own tax advisors in this regard,
including with respect to any potential relief from the application of the prohibited investment rules under an undated letter
that the Department of Finance (Canada) provided in 2012 to the Joint Committee on Taxation of the Canadian Bar Association and
the Canadian Institute of Chartered Accountants.


 


CURRENCY
AND EXCHANGE RATE INFORMATION


 


This Prospectus contains references to Canadian dollars and
United States dollars. Accordingly, unless otherwise indicated, all references to “C$” in this Prospectus refer to
Canadian dollars and “US$”, “$” or “dollars” refer to United States dollars.


 


Canadian Dollar and United States Dollar


 


The following table sets forth the high, low and average daily
noon exchange rates for each of the periods indicated, and the last noon exchange rate quoted prior to the end of each period,
of one Canadian dollar in exchange for United States currency as quoted by the Bank of Canada.


 


	 	 	Six Months Ended	 	 	Three Months Ended	 	 	Year Ended December 31	 
	 	 	June 30, 2012	 	 	March 31, 2012	 	 	2011	 	 	2010	 
	High	 	 	1.0197	 	 	 	1.0153	 	 	 	1.0583	 	 	 	1.0054	 
	Low	 	 	0.9599	 	 	 	0.9735	 	 	 	0.9430	 	 	 	0.9278	 
	Average	 	 	0.9943	 	 	 	0.9989	 	 	 	1.0111	 	 	 	0.9709	 
	Period End	 	 	0.9813	 	 	 	1.0009	 	 	 	0.9833	 	 	 	1.0054	 



 


On August 31, 2012, the noon exchange rate quoted by the Bank
of Canada was C$1.00 equals US$1.0139.


 


The audited annual consolidated financial statements of the
Company incorporated by reference herein are reported in United States dollars. Both the audited annual consolidated financial
statements of the Company and the unaudited interim consolidated financial statements of the Company incorporated by reference
herein have been prepared in accordance with International Financial Reporting Standards (“IFRS”).


 




    	7



    	 



    

 


documents
incorporated by reference


 


The following documents filed by the Company with the various
securities commissions or similar authorities in the provinces of British Columbia, Alberta, Ontario and Nova Scotia are specifically
incorporated by reference herein and form an integral part of this Prospectus:


 


		(a)	the annual report of the Company on Form 20-F for the
fiscal year ended December 31, 2011 (the "Annual Information Form");



 


		(b)	the audited annual consolidated financial statements
of the Company for the fiscal years ended December 31, 2011 and 2010, together with the notes thereto and the auditors' reports
thereon;



 


		(c)	the management's discussion and analysis of financial
condition and results of operations of the Company for the year ended December 31, 2011;



 


		(d)	the unaudited interim consolidated financial statements
of the Company for the six month period ended June 30, 2012 and 2011, together with the notes thereto (except for the notice of
no auditor review of the interim financial statements at page 2 thereof);



 


		(e)	the management’s discussion and analysis of financial
condition and results of operation of the Company for the six month period ended June 30, 2012;



 


		(f)	the management information circular of the Company dated
May 1, 2012 prepared in connection with the Annual General and Special Meeting of the shareholders of the Company held on June
5, 2012; and



 


		(g)	the following material change reports of the Company
filed since December 31, 2011, the end of the Company’s most recently completed financial year:



 


		(i)	dated February 6, 2012 announcing a significant increase
in gold resource at Pinson;



 


		(ii)	dated February 16, 2012 announcing the extension of the
C$20 million credit facility with Sprott Resource Lending Partnership;



 


		(iii)	dated February 27, 2012 announcing the results of the
completed resource estimate for the Reward Gold Project, Nye County, Nevada;



 


		(iv)	dated April 13, 2012 announcing amendments to certain
technical disclosure in its Annual Information Form and management’s discussion and analysis for the year ended December
2011;



 


		(v)	dated April 30, 2012 announcing the adoption of a shareholder
rights plan by the Company’s board of directors;



 


		(vi)	dated May 22, 2012 announcing the completion of a new
technical report for the Briggs Gold Mine, Inyo County, California;



 


		(vii)	dated May 31, 2012 announcing the completion of a technical
report for the Pinson Underground Gold Mine, Humboldt County, Nevada; and



 


		(viii)	dated August 28, 2012 announcing the Offering, entering
into of the Underwriting Agreement and filing of the Preliminary Prospectus.



 


All documents of the type referred to in section 11.1 of Form
44-101F1 of National Instrument 44-101, Short Form Prospectus Distributions, filed by the Company with the securities commissions
or similar regulatory authorities in the applicable provinces of Canada after the date of this Prospectus, and before the completion
of the Offering, are deemed to be incorporated by reference into this Prospectus.


 




    	8



    	 



    

 


Any statement contained in a document incorporated or deemed
to be incorporated by reference herein shall be deemed to be modified or superseded, for purposes of this Prospectus, to the extent
that a statement contained herein or in any other subsequently filed document which also is or is deemed to be incorporated by
reference herein modifies or supersedes such statement. The modifying or superseding statement need not state that it has modified
or superseded a prior statement or include any other information set forth in the document that it modifies or supersedes. The
making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded
statement, when made, constituted a misrepresentation, an untrue statement of a material fact or an omission to state a material
fact that is required to be stated or that is necessary to make a statement not misleading in light of the circumstances in which
it was made. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute part
of this Prospectus.


 


Information has been incorporated by reference in this Prospectus
from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein
by reference may be obtained on request without charge from the Secretary of the Company at Suite 250, 14142 Denver West Parkway,
Golden, Colorado, 80401, telephone: 303.278.8464 and are also available electronically at www.sedar.com.


 


ATNA RESOURCES
LTD.


 


Name and Incorporation


 


The Company was incorporated under the Company Act (British
Columbia) on May 30,1984 and transitioned under the Business Corporations Act (British Columbia) on April 28, 2005. The
Company merged with Canyon Resources Corporation (“Canyon”) on March 18, 2008 (the “Canyon Merger”),
at which time Canyon became a wholly-owned subsidiary of the Company. The Company’s head and principal office is located
at 14142 Denver West Parkway, Suite 250, Golden Colorado, USA, 80401. The Company’s registered office is located at 3000
Royal Centre, 1055 West Georgia Street, Vancouver, British Columbia, Canada, V6E 3R3.


 


Business of the Company


 


The Company commenced operations in 1984. The Company is a mineral
resource company engaged in gold production and the development of gold mines in the western US and conducts exploration activities
in the search for additional valuable mineral properties primarily in the western US. The Company’s development and exploration
efforts emphasize precious metals (gold and silver), but base metals and uranium may also be considered. The Company conducts a
portion of its mineral exploration and development through joint ventures with other companies. As a consequence of the Canyon
Merger in 2008, the Company’s primary focus shifted from primarily exploration activities to that of increasing value through
development of and production at wholly-owned core properties: the Briggs Mine and the Pinson-underground Project, Reward Project,
Pinson-open-pit Project, and the Columbia Project. The Company is also in the final stage of reclamation and closure activities
of the Kendall Mine in Montana.


 


Mineral
Properties


 


Pinson Project


 


The Pinson underground Project is in active development and
is located 27 miles northeast of Winnemucca, Nevada, in southeastern Humboldt County. The project site is 35 miles from Winnemucca
by road, and is 50 road miles to the northwest of Battle Mountain, Nevada. The project area encompasses approximately 2,545 acres
of private lands and federal unpatented mining claims in the Potosi mining district, surrounding and including the historic Pinson
Mine..


 




    	9



    	 



    

 


Access to the Pinson Project is provided by a combination of
paved interstate and state highway, and well maintained, unpaved private roads. Beginning in Winnemucca, travel east on Interstate
80 for 15 miles (24 km) and turn north at the Golconda exit. Proceed through Golconda to Nevada State Highway 789, and continue
16 miles (26 km) to a fork in the road and the end of the paved surface. The right gravel fork leads to the Ken Snyder Mine and
the town of Midas. The Pinson Project is located 4 miles (6 km) north along the left gravel fork, and the Getchell and Turquoise
Ridge Mines are 7 miles (11 km) further up the road. The left fork terminates at the Twin Creeks Mine, 15 miles (24 km) north of
the end of the pavement.


 


Winnemucca is the single urban population center in Humboldt
County, boasting a population more than 17,000, and is the nearest significant source of mining personnel and resources for operations
at the Pinson Project. Winnemucca is a historic ranching community which grew to support regional large-scale mining following
the discovery of several substantial gold deposits in the 1980s. A general aviation airport serves the local community, and a variety
of logistical support is available from resident businesses. The active, relatively close-proximity Getchell/Turquoise Ridge and
Twin Creeks mining complexes may provide an additional source of logistical support and skilled labor.


 





 




    	10



    	 



    

 


The historic Pinson Mine produced approximately 985,000 ounces
(oz.) of gold from 1980 through 1999] by open pit mining. Since 1998, over US$60 million in exploration and development
has been spent on the property. Exploration work has identified extensive gold mineralization open at depth along several near-vertical
structures and in disseminated zones with potential for extraction by either underground or open pit mining methods . Environmental
liabilities associated with historic mining and processing operations at the site are considered minimal. Final permanent closure
and reclamation of 1980 to 1999 components are well advanced. Revegetation has been successful and reclamation bonds released on
the tailing impoundments and approximately 90% of the non-ore rock storage areas. Long term heap fluid drain down is below 50%
of the predicted long term flow rates.


 


The Pinson Project has been explored by a number of individuals
and mining and exploration companies since the late 1930’s. The original discovery on the Pinson Project was made in the
mid to late-1930’s, but production didn’t occur until after World War II, when ore from the original discovery was
shipped to and processed at the Getchell mine mill. In 1949 and 1950, total production from the Pinson Project amounted to approximately
100,000 tons grading approximately 0.14 ounces gold per ton (opt). In 1971, an exploration group known as the Cordex I Syndicate,
drilled 17 reverse circulation drill holes in and around the 1940’s era Pinson pit, confirming low-grade gold values. An
18th step-out hole encountered a 90 foot (ft..) intercept of 0.17 opt. This intercept was interpreted as a subcropping extension
of known mineralization northeast of the original pit, and was the basis for delineation of what would become the "A"
Zone at the Pinson Project, a 60 ft.by 1,000 ft. shear zone.


 


During the late 1970’s, the Cordex I Syndicate reorganized
into a Nevada Partnership known as Pinson Mining Company (“PMC”), with Rayrock Resources as the project operator,
and began production at the Pinson Project. PMC began developing the A Pit in 1980, and produced gold the following year. Production
from the B Pit began in 1982. Step-out drilling in 1982-1983 to the northeast of the A Zone intersected two more discrete zones:
the C Zone extending east-northeast from the A Zone and the CX Zone extending northeast from the C Zone. Step-out drilling northeast
of the CX Zone in 1984 located an apparently independent fault system (striking north-northwest, dipping steeply east) that became
the core of the Mag deposit, which went into production in 1987. PMC produced from the CX, CX West and Mag pits into the mid to
late 1990’s, until a combination of falling gold prices and erratic mill feed forced closure of the oxide mill in early 1998.
Continued attempts to expand production of oxide ore failed, and all active mining ceased on January 28, 1999. In the 1990’s,
Homestake Mining Company (“Homestake”) and Barrick Gold Corporation (“Barrick”) became 50%-50%
partners in PMC through purchase of minority interests. Homestake and Barrick conducted an exploration program from 1996 to 2000
through PMC, expending some $12 million on the project. In 2003, Barrick acquired Homestake, consolidating its interest in the
property and drilled an additional three exploration drill holes.


 


In August 2004, Atna Resources Inc. (“ARI”),
a wholly-owned subsidiary of the Company, acquired an option to earn a 70% Joint Venture interest in the property from PMC, a wholly-owned
subsidiary of Barrick, and commenced additional follow-up exploration and development of the Pinson Project. ARI completed its
earn-in in 2006 and vested in its 70% interest in the Pinson Project after expending the required $12 million in exploration and
development expenditures and PMC exercised its option to “claw-back” into the Pinson Project. This “claw-back”
right allowed PMC to earn back to a total interest of 70% in the Pinson Project by spending $30M in additional exploration and
development on the property over a three-year period. PMC completed these expenditures in early 2009 and a new mining joint venture
was formed with PMC controlling a 70% interest in the venture and ARI a 30% interest. PMC, as the majority interest owner, was
the operator of the joint venture.


 


In September of 2011, ARI negotiated and closed the purchase
of PMC’s 70% interest in the core, four square miles of the Pinson Project (Sections 28, 29, 32 and 33, Township 38 North,
Range 42 East) containing the historic Pinson Mine and the related mineral resources. PMC became sole owner of 21 square miles
of former joint venture land and claims surrounding the four sections of land. As part of this transaction the Company also signed
a non-exclusive Ore Milling and Gold Purchase Agreement with an affiliate of PMC allowing the Company, at its option, to process
Pinson sulfide ores at Barrick's Goldstrike processing facilities. PMC retained a 10%, net profits royalty on production after
the first 120,000 ounces of gold are sold. Exclusive of the qualitative value of the processing agreement and future royalty payments
to PMC, the Company paid $27.9 million for the 70% interest in Pinson inclusive of: US$15.0 million in cash, 15 million common
shares of the Company, $1.5 million in assumed reclamation obligations, and the net exchange of land. The four square miles of
land (roughly 2,545 acres) contains all areas of past gold production and the area of the currently estimated mineral resource.


 




    	11



    	 



    

 


Approximately 2,545 acres of fee land, unpatented federal lode
claims and leases make up the land package controlled by ARI. ARI controls a 100% interest in the private, fee-simple, lands that
make up 1,400 acres of the property through outright ownership, or via mining leases. Additionally, ARI controls a 100% interest
in unpatented federal lode mining claims covering an additional 785 acres either by outright ownership or via mining lease agreement
and owns an undivided 41.66% interest in unpatented federal lode claims covering an additional 360 acres.


 


All four sections of land are burdened by underlying net smelter
return (“NSR”) royalty interests payable by Pinson ranging from 2.8% to 7.0% interest depending on the land
parcel involved. The average NSR payable on the Pinson underground mine will be approximately 6.0%.


 


The Pinson Project is situated in the Great Basin region of
the Basin and Range Physiographic Province. North-south mountain ranges and parallel intermountain basins characterize the area.
Elevations in the area range from about 4,000 ft. above mean sea level in the basins (“amsl”), to over 9,000
ft. amsl in the surrounding ranges. The local terrain in the vicinity of the Pinson Project is generally moderate. Local vegetation
consists of mixed sagebrush, shrubs and grasses. The climate in the project area is semi-arid, with little rainfall, low humidity,
and generally clear skies. Local average monthly temperatures range from about 430F in January to around 940F
in July, and annual extremes range from -28°F to 111°F. Average annual precipitation is around 7.82 inches, and most precipitation
falls as snow during the winter months. Winter and wet weather conditions occasionally limit access to the project site, but in
general, mining operations may be conducted year-round on the Pinson underground Project.


 


In May 2012, Gustavson Associates, LLC (Gustavson) completed
a Technical Report at a level sufficient to support an initial Mineral Reserve estimate for the Pinson underground Project. The
Technical Report, titled "NI 43-101 Technical Report, Pinson Project, Humboldt County, Nevada", presents the results
of this study in accordance with Canadian National Instrument 43-101 (NI 43-101) Standards of Disclosure for Mineral Projects and
Canadian Institute of Mining, Metallurgy and Petroleum (CIM) “Best Practices and Reporting Guidelines”. The effective
date of the report is May 18, 2012.


 


Existing infrastructure at the Pinson Project site includes
an office building, dry and warehouse facilities, and a lined stockpile area on surface. Over four thousand feet of underground
workings have been completed and four deep de-watering wells were drilled and cased, one of which is currently being operated.
Electrical infrastructure suitable for mine operations is installed and two re-infiltration basins and associated pipelines have
been constructed to re-infiltrate water produced in mine dewatering into the valley aquifer. A second portal is collared and an
underground equipment repair shop has been constructed. ARI currently controls sufficient surface rights for both the surface and
underground operations of the Pinson underground Project. In addition to existing infrastructure, ARI is constructing an assay
laboratory, and expanding the change house and warehouse. Existing mine roads are sufficient for the proposed trucks and will not
need to be upgraded. A portable crushing plant and backfill batch plant will need to be added to the surface infrastructure.


 


All ore will be processed off site so there will be no need
for a tailings storage facility, leach pad, or a processing plant on site. Waste will be sorted and all suitable waste will be
used as fill material for backfill. All other waste unsuitable for backfill will be disposed of within the existing pit, which
minimizes ground disturbance and has already been permitted for waste disposal.


 


The Pinson mining district is situated along the Getchell gold
trend, on the eastern flank of the Osgood Mountains in the Basin and Range tectonic province of northern Nevada. Brittle extensional
tectonics of the Basin and Range resulted in characteristic northerly-trending basins and mountain ranges throughout the state.
Complexly thrust, Paleozoic marine sedimentary rocks exposed in the ranges (horst blocks) are commonly intruded by Cretaceous rocks.
Both are intruded and capped by Tertiary volcanic rocks. The Preble, Pinson, Getchell, Turquoise Ridge and Twin Creeks mines are
collectively referred to as the Getchell Trend and host Carlin-type gold deposits (Twin Creeks, Getchell, and Turquoise Ridge).


 




    	12



    	 



    

 


Gold mineralization occurs: in 1) a strongly iron oxide stained,
decalcified limestone siltstone collapse breccia within the Lower Comus Formation; and 2) fractured carbonaceous shales and argillites
of the Upper Comus Formation, generally following the same fracture structures in the Lower Comus which carry the roots of the
Range Front, CX, and CX West zones. These zones are structurally-controlled pods of relatively high grade mineralization on major
faults and fault intersections. The Ogee Zone is a near-vertical, pipe-like mineralized area occurring at the intersection of the
CX West and Line Hole faults. In the Mag Pit area of the property, mineralization is more disseminated in character with broad
areas of modest grade gold mineralization hosted by receptive beds in the Upper Comus Formation.


 


Past production at the historic Pinson Mine focused solely on
oxidized gold ore amenable to open pit mining. Oxidation is extensive in the CX-fault system, affecting the entire length of the
structural zone and penetrating up to 1,800 ft. in depth. Oxidation is variably developed in the Range Front fault, but is significantly
less extensive along the CX fault. Within the Ogee zone, pervasive oxidation is limited to mineralization above the 4,700-ft. level
and is variably mixed oxide/sulfide to the base of current drilling at 3,600 ft. amsl in elevation (approximately 1,400 ft. below
the surface). Of the total underground Mineral Reserve estimated approximately 15% is oxidized, while the majority of the estimated
near surface open pit Mineral Resource is believed to be oxidized.


 


Exploration and development drilling on the Pinson Project includes
2,624 drill holes from surface and underground sites for a total of over 1.1 million total ft. of drilling. ARI and PMC completed
extensive reviews and quality control analyses of historic drill data to develop a state-of-the-art geologic and analytical database
for use in estimating resources. From 1998 through 2006, ARI's and PMC's primary exploration focus was the potential for underground
development. Work was completed by PMC from 2006 through 2009 to further develop the underground mineral resource and to evaluate
the open pit mine potential of several portions of the property. Due to the detailed record keeping of both ARI and PMC, and a
detailed review of QA/QC results, as well as the review process that both companies have performed on data as the project changed
hands, Gustavson is of the opinion that the data base is adequate for resource estimation and long term mine planning purposes.
Gustavson is of the opinion that development drilling in advance of working phases will be needed to successfully meet ore and
metal production targets during production.


 


PMC Drilling 1970 to 1996


 


Most holes drilled by PMC between 1970 and 1996 were development
holes advanced in and around the existing pit areas. PMC drilled over 1,200 holes within the A, B, C, CX, Mag, CX West, Felix,
and Bluebell pit areas. All but nine are either conventional or RC drill holes, and most (778) were drilled vertically. PMC's nine
core holes are located in the B, C, CX, and Mag pit areas. These holes were drilled to test stratigraphy, metallurgy, or deep mineralized
structures. A nearly complete set of original drill logs is available in the ARI archives maintained at the Pinson mine site.


 


PMC Drilling 1997 to 2000


 


Homestake Mining Company (HMC) as the operator of PMC drilled
206 holes on the Pinson Property between 1997 and 2000 as the operator of PMC. Most Homestake drilling (146 of the 206 holes) focused
on the CX and Range Front Fault systems, accounting for 134,000 ft. of the total drilled footage. Forty of these holes were drilled
either entirely as core, or as RC pre-collars with core tails. The remaining holes, including pre-collared portions of core holes,
were drilled by RC methods. All original HMC drill logs are available onsite at the Pinson Project.


PMC Drilling 2003


 


Barrick Gold as the operator of PMC drilled three holes in 2003
in order to test deep (>3,000 ft.) extensions of the CX Fault zone near its projected intersection with the fault zone of the
Mag Pit. This work failed to identify mineralized zones of sufficient size to warrant additional work by Barrick.


 




    	13



    	 



    

 


ARI Drilling 2004 


 


ARI's Phase 1 program followed up drilling by both PMC and HMC
that identified mineralized zones beneath the CX Pit and along the Range Front Fault. The program included 31 holes, totaling 29,740.5
ft. of combined RC and core, to test previously drilled mineralization in the two primary targets. The program had five objectives:


 


Improve the grade and thickness of mineralized zones, particularly
in regions where drilling was completed solely by reverse circulation drilling.


 


To develop continuity in the mineralized zones by drilling between
known intercepts, particularly in areas where previous drill spacing was greater than 400 ft. apart.


 


To expand the zones laterally and at depth, and potentially
discover additional zones near and adjacent to the principal high grade gold controls in the district.


 


To obtain rock quality data on hanging wall, foot wall, and
mineralized zones to plan future underground exploration, underground reserve definition drilling platforms, and bulk sampling
programs.


 


To evaluate the previously identified targets associated with
the Line Hole Anticline.


 


Of the 29,740.5 ft. of drilling completed by ARI in its Phase
1 program, 13,000 ft. in 13 holes were drilled into the CX Fault zone and 16,740.5 ft. in 18 holes were drilled into the Range
Front fault zone. Both the CX and Range Front Faults are northeast striking, southeast dipping faults. Consequently, all of ARI's
drill holes were oriented to the west-northwest, approximately 300 degrees azimuth, and angled from 45 degrees to 75 degrees. Coring
began between 100 and 200 ft. above the fault zones and terminated usually from 50 to 100 ft. after encountering the footwall zone
of the fault.


 


ARI's area of immediate focus within the CX fault zone and southern
portion of the Range Front Fault zone contains numerous shallow drill holes (see Table 10-1), but only 370 drill holes from PMC
and HMC actually pierce the fault zones. The majority of holes drilled by historically by PMC within ARI's exploration area either
have been mined out, or are too short to pierce the fault structure.


ARI Drilling 2005


 


Objectives of ARI's second drilling program were to define and
delineate measured and indicated gold resources in the higher elevations of the Range Front Fault zone where a 1,000 foot long
and 200 to 500-foot high pod of mineralization was partially outlined by ARI's surface program (Figure 10-1). ARI's second phase
program was designed to drill the upper Range Front Zone on 100-ft. by 100-ft. centers between the 5,000 ft. and 4,400 ft. amsl
elevations. The program utilized a combination of both surface and underground drill stations to delineate the zone.


 


Surface drilling for the second phase began May 2005 and utilized
a combination of RC pre-collars with core tails to drill the fault structures. Drilling completed by ARI in its second round totaled
38,329 ft. of surface RC and core drilling; with an additional 15,349 ft. of core from underground diamond drilling.


 


Due to the high cost of drilling deep holes from the surface
and difficulties resulting from drill hole deviations when targeting 100-foot offsets, a drift was driven in May 2005. Underground
drilling began September 2005 after drifting was complete and drill rigs became available.


 


While drifting to establish the underground Range Front drill
stations, a strongly mineralized zone, called the Ogee zone, was intersected by the drift. Channel samples from the drift ribs
averaged 0.55 opt gold over 34 ft. This zone, due to its potential economic significance, prompted new plans to drill holes on
75-foot centers to define and expand this potential resource. Drilling in the Ogee zone started November 2005 when the decision
was made to alter the Range Front underground drill plans. Underground crews completed 15,349 ft. of core drilling in the Ogee,
CX West, and Range Front targets during the second phase of ARI's exploration program.


 




    	14



    	 



    

 


Four drilling contractors completed this work. QA/QC for drill
sample protocols and procedures for both phases of drill activities are identical and are described in Section 11 of this report.
Readers are referred to the December 2005 43-101 Technical Report for details of the QA/QC program carried out in ARI's initial
drilling program at the Pinson Project and to the June 2007 Technical Report for the QA/QC program carried out in the second phase
of work.


 


PMC Drilling 2007 


 


Surface exploration and development drilling began August 2007
with one Eklund reverse circulation rotary drill and a Major Drilling core rig. Targets were tested along the CX and Range Front
Faults, Ogee zone, the HPR104 area and the Summer Camp resource area to the south of the Summer Camp pit (on the adjacent Turquoise
Ridge joint venture property). Twenty-seven (27) surface holes were completed during the 3rd and 4th quarters of 2007. Nine reverse
circulation pre-collared holes were completed with core tails in early 2008. Results were generally disappointing with only thin,
subeconomic zones of underground mining gold grades being intersected along the CX and Range Front Zones. After detailed review
of the program most of these holes targeted pierce points through the CX & Range Front Faults zones which were outside the
ARI defined grade shells utilized in the June 2007 resource estimate (file and SEDAR in June, 2007).


 


2008 PMC Drilling Program 


 


The 2008 surface exploration drill program started early January
2008 with three core drills and one RC drill working north of the CX West Pit area. Diamond drilling focused on completing core
tails of pre-collars completed in 2007 and one deep test of the Getchell Fault system north of the Pinson Mine over a gravity MT
feature. RC drilling focused on drilling additional pre-collars for core tails in the area north of the CX / CX West pits.


 


Surface core drilling of these targets was completed in April.
RC drilling continued, primarily focused on drilling pilot holes for potential dewatering well locations. Underground exploration
commenced in April when SMD was contracted to rehabilitate the existing underground workings and drive exploration headings into
the Ogee and CX zones. SMD supplied one underground RC drill for closely-spaced definition drilling, and Connors Drilling was contracted
to conduct underground core drilling. The SMD contract was terminated in May and the RC rig was demobilized from the property.
Connors Drilling remained onsite, and supplied a second core drill in mid-July. Both underground drills continued to operate through
mid-December, testing the Ogee zone (approximate 50' centers) and more widely-spaced drilling in the Range Front Zone. Gustavson
believes that the spacing is appropriate for the resource classification and supports this current analysis.


 


A surface drilling campaign was designed to replace a substantial
number of the suspect holes (holes where significant potential for down-hole contamination of the RC samples was judged to exist)
in key areas of the resource. Surface drilling was initiated late August with one RC drill using cased pre-collars and one core
drill. A second core drill was mobilized to the site in mid-September. A third surface core drill completed one deep test of a
structural target (Mag Fault - Delaney fault intersection) south of the resource area in September.


 


One additional RC drill remained on site, completing nine water
monitor wells - these holes were also logged and sampled. The drilling program was suspended on December 15 and all drilling equipment
was out of the mine area by early January 2009.


 




    	15



    	 



    

 


HPR104 Area 


 


Eight holes were drilled north of the Pinson resource area to
evaluate early PMC drilling designed to test the intersection of the Range Front and Line Hole Faults. Initial drilling did not
reproduce the thick low grade intercept from the HPR104 RC hole. A second series of core holes did hit thin higher grade mineralization.
BPIN008C intercepted 21.5 ft. grading 0.620 opt at a depth of 1,378 ft. Mineralization appears to be structurally controlled by
the intersection of the north northeast Line Hole Fault and the upper/lower Comus contact ~ 900ft. northeast of the Ogee exploration
drift.


 


Deep Exploration Targets 


 


Two deep drill holes were completed on the Pinson Property in
2008. BPIN010 was collared roughly one mile north of the Pinson resource area, with the goal of drilling through the lower Comus
Formation proximal to bedrock structures interpreted from the 2006 gravity data. BPIN010 was drilled to a depth of 2,845.5 ft.
and bottomed in upper Preble Formation. Assay results were negative. BPIN011A was drilled southeast of the Pinson Mine area to
test the projected intersection of the Mag and Delaney faults beyond the metamorphic halo of the Osgood stock. The hole was terminated
at 2,778 ft. in upper Comus argillite and shale. Core chip sample assays show a 60 ft. interval of low grade gold (0.029 opt) at
a depth of 1,440 ft. in silicified upper Comus claystone and shale. Half split core samples were submitted for analysis of the
entire hole and indicate narrow zones of mineralization associated with decalcified and pyritized sediments.


 


Summary of Drilling


 


	Drilled By	 	# of Holes	 	 	Total Footage	 	 	Average Depth	 
	PMC (Homestake)	 	 	206	 	 	 	236,255.0	 	 	 	1,147	 
	OTHER (PMC or Others)	 	 	2,119	 	 	 	1,072,320.0	 	 	 	395	 
	ARI-surface	 	 	88	 	 	 	68,069.6	 	 	 	774	 
	ARI-underground	 	 	48	 	 	 	15,349.0	 	 	 	320	 
	PMC (Barrick) -surface	 	 	103	 	 	 	91,892.0	 	 	 	892	 
	PMC (Barrick) - underground	 	 	60	 	 	 	20,686.0	 	 	 	345	 
	Total	 	 	2624	 	 	 	1,504,572.0	 	 	 	573	 



 




    	16



    	 



    

 





 


Commencing in May 2005, Small Mine Development
of Boise, Idaho, was contracted by ARI to drive exploration drifts, crosscuts and develop drill stations to carry out ARI’s
further evaluation of the Range Front resource area. The Range Front and CX resource areas were outlined in ARI’s initial
program and covered in detail in an NI 43-101 Technical Report entitled “Technical Report on the Pinson Gold Property, Humboldt
County, Nevada (April 2005, revised December 2005). ARI updated the resource and filed an updated Technical Report on SEDAR in
June 2007 reflecting all work completed during its work from 2004 through 2006 (Updated Technical Report on the Pinson Gold Property,
Humboldt County, Nevada, June 1, 2007).


 


The underground work developed 1,988 ft. of
14-ft. by 16-ft. adit, 378 ft. of decline, and six diamond drill stations. A small minability test was carried out on the new Ogee
zone to evaluate the potential conditions of future stopes extracting about 400 tons of material. In general, the test showed the
possibility of drift and fill as a mining method.


 


Drifting encountered two rock types with variable
rock quality and stability underground. The primary lithology encountered is the lower Ordovician Comus Formation limy sequence.
This unit is variably metasomatized to marble, wollastonite, garnet and idocrase and is also the principal host unit for gold mineralization
at the Pinson Property. Where cut in the underground workings, this unit is very competent and has a very high stability in both
the ribs and back of the workings. The second lithologic unit encountered is the upper Ordovician Comus Formation shale sequence.
This rock unit ranges in rock quality from good to very poor. The majority of the upper Comus shale is moderately competent requiring
some ground support in the back and along the ribs. However, where the shale is cut by late pre-mineral and/or post-mineral faults,
the ground conditions degrade rapidly and ground support is required in areas of extensive shattering of the shale by high angle
faulting.


 


The vast majority of the mineralization outlined
in ARI’s work, including the Ogee zone mineralization, is hosted in the lower Comus limy sequence where ground conditions
were found to be good to excellent. Test mining of the Ogee zone, where mineralization crossed the adit, successfully extracted
several rounds of muck requiring little or no ground support. A total of 300 to 400 tons of mineralized material were removed
from a 14-ft. by 16-ft. drift and stockpiled for later processing. The small test mining effort indicates that a portion of the
mineralization is likely to be able to be mined by open stope methods rather than drift and fill which, if used in practice, will
significantly reduce mining costs within the Ogee zone. 


 




    	17



    	 



    

 


Mineralization within the Ogee zone at the
adit level (4,780-ft. level) is hosted by decalcified siltstone and shale of the lower carbonate rich section of the Ordovician
Comus Formation. The rocks are locally brecciated by both faulting and karst development along and adjacent to the high-angle fault
zones which focused mineralizing fluids. Gold mineralization is associated with strong iron oxide after pyrite and elevated arsenic
after realgar and arsenian pyrite. Gold values in continuous channel samples in the adit ribs returned weighted average assays
of 0.682 opt gold over 34 ft. from the north rib and the 0.470 over 35 ft. from the south rib.


 


Ground conditions in the Range Front Zone
were not evaluated during this phase of drifting; however, ground conditions within the Range Front Zone are anticipated to be
similar to those present at the Getchell Mine to the north and are expected to be exploitable by underhand drift and fill stoping
methods. In 2008, roughly 693 ft. of new development drifting was constructed and significant geologic data was acquired.


 


Muck samples were collected as mining advanced
through projected fault zones. Muck samples were assayed by the Barrick lab at Turquoise Ridge. The 0.005 opt wire frames created
for the October, 2008 resource evaluations were used as a guide for stockpiling and sampling rounds. No underground mineable grades
were established by these samples as the highest gold value returned from these samples was 0.034 opt.


 


Trenching and Channel Sampling


 


ARI took underground channel samples of 14
ribs in the Ogee zone, as summarized in the table below, and collected an additional 74 rib and face samples that were sent out
for assay. Assays from these samples indicate that no ore-grade mineralization was mined except where the main drift passed through
the Ogee zone on the 4,770 ft. elevation.


 


	OGEE ZONE CHANNEL SAMPLE ASSAYS
	Sample No.	 	From (feet)	 	 	To (feet)	 	 	Length (feet)	 	 	Gold 
oz/ton (gram/tonne Au)
	NORTH RIB
	RFUG-055	 	 	76	 	 	 	81	 	 	 	5	 	 	0.144 (4.94)
	RFUG-056	 	 	81	 	 	 	85	 	 	 	4	 	 	0.445 (15.26)
	RFUG-059	 	 	85	 	 	 	88	 	 	 	3	 	 	0.274 (9.39)
	RFUG-061	 	 	88	 	 	 	93	 	 	 	5	 	 	1.448 (49.65)
	RFUG-063	 	 	93	 	 	 	97	 	 	 	4	 	 	0.176 (6.03)
	RFUG-064	 	 	97	 	 	 	101	 	 	 	4	 	 	0.739 (25.34)
	RFUG-067	 	 	101	 	 	 	110	 	 	 	9	 	 	0.996 (34.15)
	Weighted Average	 	 	 	 	 	 	 	 	 	 	34	 	 	0.682 (23.38)
	SOUTH RIB
	RFUG-081	 	 	77	 	 	 	80	 	 	 	3	 	 	0.106 (3.63)
	RFUG-082	 	 	80	 	 	 	83	 	 	 	3	 	 	0.065 (2.23)
	RFUG-083	 	 	83	 	 	 	93	 	 	 	10	 	 	1.082 (37.10)
	RFUG-084	 	 	93	 	 	 	96	 	 	 	3	 	 	0.894 (30.65)
	RFUG-086	 	 	96	 	 	 	99	 	 	 	3	 	 	0.355 (12.17)
	RFUG-087	 	 	99	 	 	 	107	 	 	 	8	 	 	0.028 (0.96)
	RFUG-088	 	 	107	 	 	 	112	 	 	 	5	 	 	0.228 (7.82)
	Weighted Average	 	 	 	 	 	 	 	 	 	 	35	 	 	0.470 (16.11)



 




    	18



    	 



    

 


The exploration/development drilling database, upon which the
resource and reserve estimates have been made, is of high quality and has been the subject of numerous rounds of scrutiny by Barrick,
Homestake and the Company. Sampling was conducted at the drill or in the core logging area consistent with industry standards at
the time of the work and meets or exceeds current “best practice” standards. Rotary drill samples were collected using
a rotary splitter at 5-foot intervals at the drill in pre-numbered cloth sample bags with duplicate samples taken every 20th
sample. Core samples were taken at drill-run breaks, lithology and alteration changes and never exceeded 5 ft. in length. Once
samples were bagged for shipping, samples were stored in pallet bins within a secure area of the project site and picked up directly
by the independent, ISO certified, assay laboratories sample pick-up vehicle. Transmittals verified the transfer of responsibility
for the samples and all sample preparation and analysis was completed by the third-party analytical laboratory. Gold assays were
determined by standard 1 assay ton, fire assay methods with either an atomic absorption or gravimetric finish (dependent upon the
grade of the sample). Both Barrick, Homestake, and Atna’s drilling and analytical work included rigorous Quality Assurance
and Quality Control protocols (QA/QC). These included inclusion of blind certified gold analytical standards and blanks inserted
into the sample streams at a rate of 1 blank per every 20 samples and 1 certified gold assay standard per every 20 samples. The
results of these QA/QC data were monitored closely by the qualified person(s) on the project and reassays were conducted when the
results were beyond two standard deviations of the expected values. Additionally, duplicate assays and duplicate samples were analyzed
to monitor for variations beyond normal and customary analytical variability.


 


The estimated mineral resource at Pinson is divided into two
parts. One part is lower grade, more disseminated and near surface; and is suitable for exploitation by surface mining methods.
The other is higher grade, with tight structural control and amenable for exploitation underground. The effective date of this
Mineral Resource estimate is February 6, 2012.


 




    	19



    	 



    

 


Open Pit Mineral Resources (Imperial)


	Cut-Off 
Gold 
opt	 	 	Tons	 	 	Measured 
Gold 
opt	 	 	Contained 
ounces Au	 	 	Tons	 	 	Indicated 
Gold 
opt	 	 	Contained 
ounces Au	 	 	Tons	 	 	Measured +

 Indicated 
Gold 
opt	 	 	Contained 
ounces Au	 	 	Tons	 	 	Inferred 
Gold 
opt	 	 	Contained 
ounces Au	 
	 	0.005	 	 	 	26,291,100	 	 	 	0.029	 	 	 	770,700	 	 	 	5,123,000	 	 	 	0.050	 	 	 	255,600	 	 	 	31,414,100	 	 	 	0.033	 	 	 	1,026,300	 	 	 	1,035,200	 	 	 	0.029	 	 	 	29,900	 
	 	0.010	 	 	 	21,158,900	 	 	 	0.035	 	 	 	732,000	 	 	 	4,307,400	 	 	 	0.058	 	 	 	249,600	 	 	 	25,466,300	 	 	 	0.039	 	 	 	981,700	 	 	 	824,400	 	 	 	0.034	 	 	 	28,300	 
	 	0.015	 	 	 	16,999,400	 	 	 	0.040	 	 	 	681,000	 	 	 	3,652,700	 	 	 	0.066	 	 	 	241,500	 	 	 	20,652,100	 	 	 	0.045	 	 	 	922,600	 	 	 	659,000	 	 	 	0.040	 	 	 	26,200	 
	 	0.020	 	 	 	13,988,700	 	 	 	0.045	 	 	 	628,500	 	 	 	3,198,500	 	 	 	0.073	 	 	 	233,800	 	 	 	17,187,300	 	 	 	0.050	 	 	 	862,200	 	 	 	531,600	 	 	 	0.045	 	 	 	24,100	 
	 	0.025	 	 	 	11,474,200	 	 	 	0.050	 	 	 	572,200	 	 	 	2,837,000	 	 	 	0.080	 	 	 	225,700	 	 	 	14,311,200	 	 	 	0.056	 	 	 	797,900	 	 	 	426,800	 	 	 	0.051	 	 	 	21,700	 
	 	0.030	 	 	 	9,338,900	 	 	 	0.055	 	 	 	513,500	 	 	 	2,495,100	 	 	 	0.087	 	 	 	216,200	 	 	 	11,834,000	 	 	 	0.062	 	 	 	729,700	 	 	 	356,800	 	 	 	0.055	 	 	 	19,800	 



 


Underground Mineral Resources (Imperial)


	Cut-Off 
Gold 
opt	 	 	Tons	 	 	Measured 
Gold 
opt	 	 	Contained 
ounces Au	 	 	Tons	 	 	Indicated 
Gold 
opt	 	 	Contained 
ounces Au	 	 	Tons	 	 	Measured +

    Indicated 
Gold 
opt	 	 	Contained 
ounces Au	 	 	Tons	 	 	Inferred 
Gold 
opt	 	 	Contained 
ounces Au	 
	 	0.100	 	 	 	3,037,200	 	 	 	0.257	 	 	 	781,700	 	 	 	2,516,000	 	 	 	0.266	 	 	 	668,400	 	 	 	5,553,300	 	 	 	0.261	 	 	 	1,450,100	 	 	 	4,204,900	 	 	 	0.269	 	 	 	1,129,500	 
	 	0.150	 	 	 	2,244,000	 	 	 	0.304	 	 	 	683,100	 	 	 	1,719,700	 	 	 	0.332	 	 	 	570,900	 	 	 	3,963,700	 	 	 	0.316	 	 	 	1,254,000	 	 	 	3,013,500	 	 	 	0.326	 	 	 	982,800	 
	 	0.200	 	 	 	1,619,100	 	 	 	0.355	 	 	 	575,000	 	 	 	1,300,700	 	 	 	0.383	 	 	 	498,000	 	 	 	2,919,800	 	 	 	0.368	 	 	 	1,073,000	 	 	 	2,236,200	 	 	 	0.378	 	 	 	845,900	 
	 	0.250	 	 	 	1,171,900	 	 	 	0.405	 	 	 	474,900	 	 	 	934,300	 	 	 	0.444	 	 	 	415,000	 	 	 	2,106,200	 	 	 	0.423	 	 	 	889,900	 	 	 	1,722,800	 	 	 	0.424	 	 	 	730,600	 
	 	0.300	 	 	 	828,700	 	 	 	0.459	 	 	 	380,700	 	 	 	606,600	 	 	 	0.534	 	 	 	324,000	 	 	 	1,435,300	 	 	 	0.491	 	 	 	704,700	 	 	 	1,253,500	 	 	 	0.480	 	 	 	601,200	 
	 	0.500	 	 	 	206,100	 	 	 	0.715	 	 	 	147,300	 	 	 	291,500	 	 	 	0.701	 	 	 	204,200	 	 	 	497,600	 	 	 	0.706	 	 	 	351,600	 	 	 	481,600	 	 	 	0.617	 	 	 	297,100	 



NOTE: (1) Mineral resources include
mineral reserves. 


 




    	20



    	 



    

 


Inferred resources are considered too speculative geologically
to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.


 


Reserves have been estimated only on the underground resources.
A mine plan was developed using a 0.2opt cut-off grade and a minimum stope drift size of 10ft. by 10ft. in order to determine reserves.
Mineral reserves are classified as proven and probable material contained within the ultimate pits, and summarized using measured
and indicated resource classifications. The following table shows the summary of mineral reserves of the underground ore zones.
The effective date of this mineral reserve estimate is May 18, 2012.


 


Underground
Mineral Reserves


 


	Reserve Summary at 0.2 OPT Cut-Off
	 	 	Proven	 	 	Probable	 	 	Proven + Probable	 
	Zone	 	Ounces	 	 	Tons	 	 	Grade opt	 	 	Ounces	 	 	Tons	 	 	Grade opt	 	 	Ounces	 	 	Tons	 	 	Grade opt	 
	Ogee Zone	 	 	128,200	 	 	 	313,300	 	 	 	0.409	 	 	 	97,300	 	 	 	283,400	 	 	 	0.343	 	 	 	225,500	 	 	 	596,700	 	 	 	0.378	 
	Linehole	 	 	0	 	 	 	0	 	 	 	0.000	 	 	 	61,000	 	 	 	112,200	 	 	 	0.544	 	 	 	61,000	 	 	 	112,200	 	 	 	0.544	 
	Range Front	 	 	96,900	 	 	 	286,900	 	 	 	0.338	 	 	 	88,200	 	 	 	257,400	 	 	 	0.343	 	 	 	185,100	 	 	 	544,300	 	 	 	0.340	 
	Adams Peak	 	 	93,400	 	 	 	273,800	 	 	 	0.341	 	 	 	11,800	 	 	 	39,400	 	 	 	0.299	 	 	 	105,200	 	 	 	313,200	 	 	 	0.336	 
	CX Zone	 	 	51,600	 	 	 	136,600	 	 	 	0.378	 	 	 	16,200	 	 	 	43,600	 	 	 	0.372	 	 	 	67,800	 	 	 	180,200	 	 	 	0.376	 
	Total	 	 	370,100	 	 	 	1,010,600	 	 	 	0.366	 	 	 	274,500	 	 	 	736,000	 	 	 	0.373	 	 	 	644,600	 	 	 	1,746,600	 	 	 	0.369	 



 


The cut-off grade uses the economics to determine the grade
above which the material will be profitable. The cut-off grade for the sulfide ore is 0.21 opt at an average payable recovery of
86% and 0.19 opt for the oxide ores. The processing fee for oxides is included in the percentage payable table based on grade and
was back-calculated using the average oxide grade, the average test recovery, and the study average gold price. Recoveries used
for calculating the oxides were 89.5% with an average grade of 0.37 opt and an average payable of 74%.


 


	Cut-Off Grade Calculation
	Parameter	 	Unit	 	 	Oxide	 	 	Sulfide	 
	UG Mining	 	 	$/t	 	 	$	134.89	 	 	$	134.89	 
	Surface Operations	 	 	$/t	 	 	$	4.98	 	 	$	4.98	 
	Transport to Mills	 	 	$/t	 	 	$	5.61	 	 	$	23.34	 
	Sulfide Process Charge	 	 	$/t	 	 	$	0.00	 	 	$	80.00	 
	Utilities	 	 	$/t	 	 	$	7.11	 	 	$	7.11	 
	G&A	 	 	$/t	 	 	$	18.90	 	 	$	18.90	 
	Subtotal	 	 	$/t	 	 	$	171.48	 	 	$	269.21	 
	Real Cost Oxides	 	 	$/t	 	 	$	74.36	 	 	$	0.00	 
	Total Cash Operating Costs	 	 	$/t	 	 	$	245.84	 	 	$	269.21	 
	Cut-Off Au	 	 	opt	 	 	 	0.19	 	 	 	0.21	 



 


The proposed underhand cut and fill stoping method for the Pinson
underground Project consists of mining 10 ft. high slices in a 70 ft. thick block. The 10 ft. height was chosen as a conservative
dimension to ensure good roof control and dilution minimization. The widths of the ore bodies at the Pinson underground Project
vary from approximately 40 to 100 ft. and are 50 to 450 ft. long. The vertical dimension can extend continuously for several hundred
feet. The slices will be mined by driving 10 ft. wide drifts in the upper cut and 12 ft. wide drifts in the lower cuts. These widths
are expected to be within the span limitations of the ore.


 




    	21



    	 



    

 


Stope mining will begin once the Ogee ramp has been developed
to the first stope level Production in 2012 will not exceed 36,500 tons of ore due to permit limitations. The project is substantially
on schedule for initial ore production in the fourth quarter 2012. The following table shows the annual production for the life
of the Pinson underground Project. By the end of 2013, the mine is at full production with 6 stopes being mined. It is possible
to have 6 stopes mined concurrently through 2017.


 


	Life of Mine Production
	Year	 	Tons Mined	 	 	Grade 

OPT	 	 	Ounces	 	 	Payable 

Gold oz	 
	2012	 	 	36,500	 	 	 	0.324	 	 	 	11,800	 	 	 	5,500	 
	2013	 	 	259,700	 	 	 	0.387	 	 	 	100,400	 	 	 	88,300	 
	2014	 	 	335,300	 	 	 	0.380	 	 	 	127,100	 	 	 	108,200	 
	2015	 	 	346,000	 	 	 	0.392	 	 	 	135,600	 	 	 	116,600	 
	2016	 	 	314,600	 	 	 	0.332	 	 	 	104,400	 	 	 	89,500	 
	2017	 	 	311,000	 	 	 	0.369	 	 	 	114,500	 	 	 	96,300	 
	2018	 	 	145,700	 	 	 	0.349	 	 	 	50,800	 	 	 	44,000	 
	Total	 	 	1,748,800	 	 	 	0.369	 	 	 	644,600	 	 	 	548,400	 



 


Ore will be crushed and separated into either an oxide or sulfide
stockpile. Ore will be shipped offsite where a third party will process all ore. ARI currently has contracts in place to sell its
oxide ore and to process its sulfide ore with a third party. ARI will be paid for the sale of its oxide ore and by the sulfide
ore processors based on a sliding scale indexed to head grade. In addition to the sliding pay scale, ARI will incur a treatment
charge estimated to be approximately $80 per ton for all sulfide ore.


 


Capital costs for the Pinson underground Project include: mine
development, ventilation and electrical equipment, surface equipment, surface facilities, and working capital. Capital costs were
estimated based on quotes received by ARI and from Info Mine USA Cost handbook. The applicable Gustavson qualified persons have
reviewed and approved this cost information for purposes of estimating capital costs. The following table shows the summary of
the total estimated capital costs over the life of the mine.


 


	Summary of Capital Cost Estimates
	Operation	 	Total Costs	 	 	$/Ton of Mined Ore	 
	Underground Mine Development	 	$	55,600,000	 	 	$	31.83	 
	Ventilation Development	 	$	8,366,000	 	 	$	4.79	 
	Underground Capital	 	$	3,295,000	 	 	$	1.90	 
	Surface Equipment	 	$	2,220,000	 	 	$	1.27	 
	Surface Facilities	 	$	2,292,000	 	 	$	1.31	 
	Bonding	 	$	480,000	 	 	$	0.27	 
	Total	 	$	72,253,000	 	 	$	41.37	 



 


Operating costs for the mine include: mine production for upper
and lower cuts, sub-level development, remuck development, stope development, mine backfill, surface operations, transport of ore
to the mill, processing costs, basic utilities, and G&A. Costs were estimated based on quotes from mining contractors, processing
mills, local utility rates, ARI, and InfoMine USA Cost Estimating Handbooks. The applicable Gustavson qualified persons have reviewed
and approved this cost information for purposes of estimating operating costs. All underground mine development and production
mining will be done by a contract miner. All surface operations including primary crushing, material handling, loading and backfill
production will be done by ARI. Haulage of ore to the mill will be contracted out to a trucking company. ARI will not have their
own processing mill, and all milling and processing will be done by a third party.


 




    	22



    	 



    

 


	Summary of Cash Operating Cost

                                                                  Estimates

	Operation	 	$/Ton of Mined Ore	 
	Production Mining	 	$	135.00	 
	Surface Operations	 	$	4.98	 
	Transportation2	 	$	21.39	 
	Processing3	 	$	80.00	 
	Utilities	 	$	9.07	 
	G&A	 	$	18.90	 
	Total	 	$	269.34	 



(1) Costs calculated on total tons mined


(2) Oxide transport cost $5.61 per ton, sulfide
$23.34 per ton


(3) Processing costs only apply to sulfide ore


 


Surface operating cost estimates were based on machine operating
costs contained in the Info Mine Handbook and labor costs based on current wages that ARI pays its personnel. Surface operations
include crushing of the run of mine ore, stockpiling, and loading processed ore into haul trucks to be delivered to the mill. Estimated
surface operating costs are approximately $4.98 per ton of ore.


 


The decision to develop the Pinson underground Project is not
based on a comprehensive "feasibility study" within the meaning of NI 43-101. As such, although mineral reserves have
been estimated for the Pinson underground Project in accordance with NI 43-101, there may be increased uncertainty concerning the
economic and technical viability of the Pinson underground Project, including for example, the potential for increased capital
and operating costs.


 


The Base Case for the Pinson Project envisions underground mining,
minimal crushing, and off site processing of oxide and sulfide ores of 1.75 million tons with an average grade of 0.37 opt gold.
The economics include Nevada Net Proceeds Tax, royalties, and third-party revenue/cost sharing for the 32 North 1⁄2 CX Zone.
The model does not include Federal Taxes.


 


Economic analysis of the Pinson Project, at a gold price of
$1,300 per oz, estimate a net present value (“NPV”) @ 5% of $91.1 million using a 0.20 opt mining cut-off grade.
This yields an estimated internal rate of return (“IRR”) of 102.6%. The project is projected to have a total
mine life of 7 years with a payback in 2.2 years at a gold price of $1,300 per oz. Approximately 644,500 oz of gold are projected
to be mined and 548,400 oz of gold recovered and produced. The project’s cash operating cost is projected to be $829 per
oz of gold. The gold price used in the economic analysis ($1,300 per oz gold) is the three year trailing average as of the end
of March 2012.


 


	Economic Summary (Estimate)
	Gold Price $/opt	 	$	1,300	 
	Total Au Oz	 	 	548,400	 
	NPV 5%	 	$	91,134,915	 
	NPV 10%	 	$	72,065,062	 
	IRR	 	 	102.6	%
	Payback (yrs)	 	 	2.2	 
	Cash Cost/Oz (operating)	 	$	829	 



 




    	23



    	 



    

 


	Economic Sensitivity Table
	Gold Price 	 	 	 	 	 	$	1,300	 	 	$	1,500	 	 	$	1,700	 
	IRR	 	 	 	 	 	 	103	%	 	 	171	%	 	 	239	%
	NPV 10%	 	 	(Million)	 	 	$	72	 	 	$	129	 	 	$	185	 
	Payback (years)	 	 	(Years)	 	 	 	2.2	 	 	 	1.6	 	 	 	1.4	 
	Cash Operating Cost (C1)*	 	 	($/oz)	 	 	 	829	 	 	 	829	 	 	 	829	 
	Total Cash Cost (C2)*	 	 	($/oz)	 	 	 	935	 	 	 	972	 	 	 	1,010	 
	Full Cost (C3)*	 	 	($/oz)	 	 	 	1,067	 	 	 	1,104	 	 	 	1,142	 



* Gold Institute Cost Standards


C1: Total direct costs of production


C2: Includes royalty payments and Nevada Net Proceeds Tax


 


ARI and the Pinson Project operate under a myriad of State,
Federal and local regulatory programs administered by several agencies within each jurisdictional area. The Pinson Project is currently
permitted to operate under a small mines permit which limits extraction of ore to 36,500 tons per year. The Company began redevelopment
of the mine based on this permit in the fourth quarter of 2011. The following table sets out all of the permits that the Company
has obtained in relation to the Pinson Project.


 


	Pinson Project Existing Permits
	Permit	 	Permit Number	 	Agency
	Class III Air Quality Operating Permit (AQOP) 	 	AP1041-2072.01 	 	BAPC
	Class II SAD Permit AQOP 	 	AP1041-1091.02 	 	BAPC
	Groundwater Infiltration 	 	WPCP NEV2005102 	 	BMRRR
	Permit for Exploration	 	WPCP NEV2005103 	 	BMRRR
	Closure of Previous Surface Mining Operations	 	WPCP NEV0089002 	 	BMRRR
	Private Lands	 	Reclamation Permit 0242	 	BMRRR
	Private Lands	 	Reclamation Permit 0047 	 	BMRRR
	Public Lands - Historic Open Pit	 	NVN-064101 (N24-83-004P)	 	BLM
	Resource Conservation and Recovery Act 	 	NVD099530966	 	US EPA
	Water Diversion Rights	 	9,853 acre feet 	 	Deeded Rights
	Water Consumptive Rights	 	1,149 acre feet 	 	Deeded Rights
	Nevada Mining Storm Water General Permit 	 	Site ID MSW-266	 	BMRRR
	Small Capacity Septic System 	 	Permit No. LOA05SCS0049	 	BMRRR


Bureau of Air Pollution Control (BAPC)


Bureau of Mining Regulation and Reclamation Regulation Branch
(BMRRR)


Federal Bureau of Land Management (BLM)


United States Environmental Protection Agency (EPA)


 


Pinson has received notice from the Nevada Division of Environmental
Protection that modification to its Water Pollution Control Permit to increase to a large scale facility producing up to 400,000
tons of ore per year is administratively complete. The Department has begun their technical review for final approval. No federal
permits are required for this increased production rate.


 


On July 20th, 2012 the Company received Notice of approval of
the Class II Air Quality Operating Permit from the Nevada Division of Environmental Protection. This permit covers the operation
of an ore crushing facility, a crusher facility for aggregate for backfill, a shotcrete plant, a backfill plant and an assay laboratory.


 




    	24



    	 



    

 


Atna has substantially completed the process of transferring
the various operating and reclamation permits associated with Pinson from the name of PMC to the name of ARI. Associated with these
permits is approximately $1.9 million in reclamation bonding. Atna has provided the State of Nevada with approximately $0.6 million
of this bonding, and expects to provide the balance of approximately $1.3 million in late-2012 or early-2013 in conjunction with
the transfer of the remaining permits.


 


Following completion of underground mining operations at the
Pinson Project those facilities related to the underground mining component of the project will be closed under final permanent
closure plans approved by BMRRR. Closure operations will include removal from all equipment and supplies from underground workings,
removal or treatment of any hydrocarbon contaminated materials and sealing of the three portal openings by backfilling openings
with non-ore rock. All equipment will be removed from the surface of the CX pit and dewatering wells will be plugged and abandoned
in accordance with Nevada Administrative Code (“NAC”) 534 regulations. Hydrocarbon contaminated soil will be
excavated and transported offsite for disposal. Surface concrete will be rubbleized. A final pit lake will form in the CX pit with
an anticipated final surface water level of approximately 4,790 ft. amsl. The lake is predicted to be a hydrologic sink with annual
groundwater and surface water inflow exceeded by annual evaporation from the surface of the lake. Post-closure monitoring will
occur as required by WPCP NEV2005103 for a minimum of five years.


 


Atna has retained a strong senior management team for Pinson
and that team is actively managing development and operations. A mining contractor, DMC Mining Services ("DMC"),
is providing contract mining services. Three operating crews are presently employed working two 10 hour shifts, seven days per
week.


 


On July 25, 2012, the Company announced that it had completed
construction of the secondary access into the mine, meeting Mine Safety and Health Administration safety requirement to begin the
production of ore. Completion of this access now allows the continued development of the spiral decline into the mine. Development
of ore mining areas will be conducted from the decline with the goal of achieving gold ore production in the fourth quarter 2012.
An underground chamber for installation of the primary ventilation fans and air door lock was constructed as part of the secondary
access. Ventilation doors and the main fans will be installed in the near future.


 


The workings are de-watered using an existing deep de-watering
well. Three additional wells have been drilled and the Company has pumps and related equipment on hand to put two of these wells
into operation. Pumps and the second dewatering well will be installed during the month of September 2012. Water is currently being
discharged into two existing rapid infiltration basins and a third basin has been permitted for construction. In addition, site
electrical systems to support underground tunneling and ventilation operations have been upgraded, and construction of a lined
stock pad for the stockpiling of future mined sulfide ores is planned to be completed in the fourth quarter of 2012.


 


On June 20, 2012, Pinson shipped a bulk sample of 1,553 tons
of oxide ore to a third-party processor for a trial process run. This ore had an average process grade of 0.353 ounces per ton,
from which 92.6% of the gold was recovered in the plant. No deleterious elements beyond normal were identified. Pinson netted approximately
$0.6 million from this sale, which was credited against capital development. On the basis of this test run, a longer term oxide
processing agreement is being negotiated. Oxide ore is believed to constitute approximately 10% to15% of the total ore reserve
at Pinson.


 


Approximately $20 million in development costs for Pinson have
been budgeted for 2012. The Company expects to mine up to 36,500 tons as allowed under current permits to produce 10,000 to 15,000
ounces of gold in 2012. This production is budgeted to occur primarily in the fourth quarter of 2012. As of December 31, 2011,
Pinson’s property plant, mine development, and mineral interests had a carrying cost of $29.9 million, net of $0.1 million
in accumulated depreciation.


 




    	25



    	 



    

 


Reward Project


 


The Reward Project, located on approximately 2,213.8 acres,
is in Nye County, Nevada, centered about seven miles south-southeast of the town of Beatty, on the west slope of the Bare Mountains.
Access is gained via state highway 95 to the site access road turnoff followed by a two-mile gravel access road. The various mineral
properties which define the Reward Project area lie within sections 1, 2, 3, 10, and 11 of Township 13 South, Range 47 East, and
sections 33, 34, and 35 of Township 12 South, Range 47 East, all referred to the Mount Diablo Baseline and Meridian. The Company
holds eight placer claims and 14 unpatented lode claims under four mining leases, which expire in 2024 and 2025. The Company also
owns 99 unpatented claims and six patented claims. The leases and patented claims each carry a 3% NSR royalty.


 


The property history below was largely complied
by CAM (2006), based on Eliopulis (1996) and earlier sources. Like many properties in the western US, the Reward Project has been
explored by a long succession of groups, as discussed below and as summarized in the table below. Production from the property
has been very minor, and poorly documented.


 


The mining property presently known as Reward
probably assumed its name from a claim located in the late 1950's as there is no specific reference to a "Reward" mining
camp in the literature. The earliest recorded prospecting at Reward probably dates to 1913 when gold was discovered at the adjacent
Gold Ace property (Kral, 1951). Of the few shallow prospects at Reward, the most extensive is the 150-foot long Good Hope adit
located near north end of the Hardway claim. Kral's (1951) description of the Arista mine, credited with shipping 1.25 tons of
ore grading over one ounce per ton gold just before World War II, matches that of the Good Hope adit where a small glory hole and
underlying raise were worked.


 


The Reward Project remained idle until 1957
when the claims Reward, Sunshine, Good Hope and Hardway (in 1962) were staked. Over the next 15 to 20 years few physical improvements
were made on the claims, while ownership passed to Messrs. Webster and Burt (Barrick’s “Webster lease”).
Ownership also changed hands several times on the adjacent Gold Ace property before purchase in 1980 by TECO, Inc. (Barrick's “TECO
lease”).


 


In 1976, Galli Exploration Associates (“GEXA”)
acquired an option on the Webster-Burt land and conducted minor road construction and improvement over the following ten years.
In the mid-1980's, St. Joe American Corp. carried out an extensive sampling program on the Gold Ace property in conjunction with
their exploration program in the Bullfrog mining district. In 1985, GEXA staked ten unpatented lode claims peripheral to the Webster-Burt
ground.


 


The first known drilling on the property began
in 1987, when Homestake Mining Company leased the TECO lands. Homestake drilled two vertical holes near northwest and southwest
edges of the Webster-Burt ground as part of a four-hole, 1210-foot rotary program (HMC 1 to 4), which probed pediment gravels for
a large-tonnage conceptual target. Drill results from the four wide-spaced holes were negative.


 


Drilling at Reward proper began in late 1987
intermittently through 1989 by Gexa Gold Corp., successor to Galli Exploration Associates, who completed 16 reverse circulation
drill holes (R-1 to R-15 and R-12A) for an aggregate of 3,037 feet (Bybee, 1990). GEXA's drilling documented gold mineralization
along the north-south trending Good Hope-Reward vein/fault system, across some 1600' strike, which constitutes the present Reward
gold resource "north of the saddle.” This portion of the Reward gold resource is referred to as the Good Hope zone in
certain reports.


 


During these same years, 1988-1989, Pathfinder
Gold Corporation acquired an option on the TECO ground, portions of which overlie the southerly gravel-covered projection of the
Reward fault, south of the Webster leased ground. Pathfinder drill-tested these fault projections and added several holes along
drill fences between south Reward and south Gold Ace. A total of 33 reverse-circulation holes and one partial core hole (GA88 -1
to 88-22 & GA89 -1 to 89-11) were drilled, totaling 13,841 feet (Turner, 1991). Nine of these holes, located along the south
Reward fault projection intercepted mineralization with values in excess of 0.010 oz per ton Au, but intercepts were narrow and
continuity could not be demonstrated.


 




    	26



    	 



    

 


Pathfinder joint-ventured their interest in
the TECO lease to Cloverleaf Gold Inc. in 1990. Cloverleaf completed 49 shallow reverse circulation holes (GA - 1 to GA - 49) for
9075 feet. All but five Cloverleaf holes were targeted on historic mine workings at Gold Ace. Results were spotty, characteristic
of the narrow, erratic, podiform, structurally-controlled replacement mineralization of the Gold Ace areas. Cloverleaf surrendered
their interest back to Pathfinder in 1990.


 


In 1991, the availability of an option on
the Reward Project from GEXA influenced Pathfinder's decision to reevaluate Gold Ace in conjunction with a program at Reward. Pathfinder
proceeded to acquire the Reward Project, stepped off south of the 1987-89 GEXA drill pattern, and drilled into the present Reward
gold resource south of the saddle, on the Hardway, Reward, Bullmoose #3A and #4 claims). Pathfinders's 1991 program on both properties
resulted in 17 holes (GA 91-1 to 91 -17) for an aggregate of 8,300 feet of reverse circulation drilling. Following this work, Pathfinder
surrendered all leases and withdrew from the district, having identified the southern half (Reward zone) of Barrick's Reward gold
resource as well as having identified interesting gold mineralization on the TECO claims south of the historic Gold Ace shaft (Eliopulos,
1996).


 


In 1992 US Nevada Gold Search (USNGS), a joint
venture consisting of Siskon Corp., N.A. Degerstrom Inc., and US Precious Metals (successor to GEXA), assumed GEXA's position at
Reward. At that time USNGS was operator of the Mother Lode mine located on the northeast side of the Bare Mountains some 5 air
miles northeast of Reward. USNGS drilled 7 reverse circulation holes (R - 16 to R - 22) for 2,119 feet, all of which intersected
mineralization along the Reward fault. USNGS conducted no further work on the property.


 


Barrick's entry to the Reward and Gold Ace
properties began in 1990 when Bond Gold Exploration Inc., operators of the Bullfrog gold mine, acquired an option from Pathfinder
Gold on the Gold Ace property. Bond began their exploration program with airborne geophysics but the work was curtailed abruptly
by Lac Minerals' acquisition of Bond. The lease on Gold Ace was surrendered back to Pathfinder.


 


In 1995, USNGS sold the GEXA lode claims and
assigned the Webster lease to Barrick Gold Inc., who by 1994 had acquired the assets of Lac Minerals. In 1995, Barrick also engaged
in other work relating to Reward include:


 


		·	negotiated a mining lease with TECO, Inc.
on the Gold Ace ground



		·	staked 94 lode claims along extensions of
the Reward and Gold ACC zones



		·	drill-tested five peripheral targets (Ohm,
Ted's Landing, Orange Quartzite, South of Ollies, and Southeast Gold Ace)



		·	completed 66 reverse-circulation holes for
24,535 feet as in-fill drilling



 


In 1998, Rayrock Mines, Inc. acquired Barrick’s
property and began permitting of the Reward Mining property. In early 1999, Rayrock was acquired by Glamis Gold, Ltd. of Reno,
Nevada. During 1998-99, 80 reverse-circulation holes (RE-001 to RE-79, including RE-026A) were drilled by Marigold Mining Company,
an affiliate of Rayrock and Glamis at the time.


 


Glamis initiated the permitting process for
eventual production. To provide consistency, Rayrock Mines, Inc. was used as the permitting corporate entity throughout the permitting
process. However, falling gold prices led to suspension of the project.


 


From 2000 to early 2004, the property was
essentially dormant, during a period of low gold prices.


 


As discussed in previously, Canyon acquired
the core parts of the Reward Project through agreements in 2004. By the end of 2006, nearly all the current parcel had been assembled
under Canyon’s ownership or lease. Canyon undertook reverse-circulation drilling in 2006 and a limited diamond drilling program
in early 2007.


 




    	27



    	 



    

 


The Company continued the development and
exploration drilling in 2011 with the completion of 15 reverse-circulation rotary holes. The results from of this latest round
of drilling are incorporated into the Technical Report titled “NI 43-101 Technical Report, Reward Gold Project, Nye County,
Nevada” dated June 29, 2012 with an effective date of December 31, 2011.


 


Canyon contracted Chlumsky, Armbrust &
Meyer to complete a preliminary assessment of the mineral Resources, and later a prefeasibility study on the project (CAM, 2006).
CAM estimated an Indicated tonnage of 6.88 million short tons averaging 0.0254 ounces per ton in the Reward and Gold Ace zones.
Contained within this tonnage was a diluted Probable Reserve, which at a gold price of $400/oz (no silver values taken) totaled
2,610,066 tons averaging 0.0314 ounces-per-ton (opt) gold. There was no Proven Reserve. CAM’s (2006) estimate was undertaken
when Canyon was a public U.S. company, and the CAM reports were not filed in Canada.


 


In 2007, CAM was contracted to complete the
mineral Resource and Reserve estimates and Feasibility Study.


 


History of Reward Project


(From Eliopulos (1996) and other sources)


 


	Period	 	Owner	 	Operator	 	Work Performed	 	Comments
	1913	 	 	 	 	 	Gold discovered at Gold Ace Mine	 	 
	 	 	 	 	 	 	 	 	 
	pre-1942	 	 	 	 	 	Arista Mine (a.k.a.  Good Hope Mine Shipped 1.25 tons of 11-oz ore	 	 
	 	 	 	 	 	 	 	 	 
	1942-1957	 	 	 	 	 	District idle	 	 
	 	 	 	 	 	 	 	 	 
	1957-62	 	 	 	?	 	Reward and other claims staked	 	 
	 	 	 	 	 	 	 	 	 
	c.  1970's	 	Webster, Burt	 	—	 	Acquired Reward claims	 	 
	 	 	 	 	 	 	 	 	 
	1976	 	Webster, Burt	 	
        Optioned to Galli Expl. Assocs.

        (GEXA)
	 	Surface work only	 	 
	 	 	 	 	 	 	 	 	 
	1980	 	Teco, inc.	 	—	 	Acquired Gold Ace property	 	 
	 	 	 	 	 	 	 	 	 
	mid-1980's	 	Webster, Burt	 	St.  Joe American optioned	 	Surface work	 	 
	 	 	 	 	 	 	 	 	 
	1985	 	GEXA (Galli)	 	GEXA 	 	Staked 10 claims next to Webster, Burt 	 	 
	 	 	 	 	 	 	 	 	 
	1987	 	Teco, Inc.	 	Homestake	 	4 RC holes on Gold Ace, negative	 	 
	 	 	 	 	 	 	 	 	 
	1987-1989	 	Webster, Burt	 	GEXA (Galli)	 	16 RC holes at Reward/Good Hope	 	 
	 	 	 	 	 	 	 	 	 
	1988-1989	 	Teco, Inc.	 	Pathfinder Gold optioned	 	33 RC holes, 1 DDH, spotty results	 	 


 




    	28



    	 



    

 


History of Reward Project


(From Eliopulos (1996) and other sources)


 


	Period	 	Owner	 	Operator	 	Work Performed	 	Comments
	1990	 	Teco, Inc.	 	Pathfinder option to Cloverleaf Gold.  	 	49 RC holes, erratic results	 	 
	 	 	 	 	 	 	 	 	 
	1990	 	Teco, Inc.	 	Bond Gold optioned	 	Airborne geophysics over Gold Ace	 	 
	 	 	 	 	 	 	 	 	 
	1991	 	Teco Inc.  and Webster, Burt	 	Pathfinder Gold	 	17 RC holes, ID'ed small tonnage	 	 
	 	 	 	 	 	 	 	 	 
	1992	 	Webster, Burt	 	US Nevada Gold Search JV	 	7 RC holes, ID'ed larger tonnage	 	 
	 	 	 	 	 	 	 	 	 
	1992-1995	 	Teco, Inc and Webster, Burt	 	Bond Gold (became Lac Minerals, later became Barrick) 	 	66 RC holes, staked 94 new claims.  Also 17 RC holes on outlying areas 	 	 
	 	 	 	 	 	 	 	 	 
	1998-1999	 	Rayrock Mines	 	Rayrock (became Glamis Gold), as Marigold 	 	Permitting attempt, also drilled 80 RC holes	 	Stalled by low gold prices
	 	 	 	 	 	 	 	 	 
	2004	 	Canyon Resources	 	Canyon	 	Leased core claims of property	 	 
	 	 	 	 	 	 	 	 	 
	2006-2007	 	Canyon Resources	 	Canyon	 	Added claims, 21 RC holes, 4 core holes	 	 
	 	 	 	 	 	 	 	 	 
	2011	 	Atna	 	Atna	 	Added 15 RC holes	 	 


 


For 2008 through 2011, CAM was contracted
to update the end-of-year mineral Resource and Reserve estimates on an annual basis.


 




    	29



    	 



    

 





 


The Bare Mountains are a steep, rugged, rocky, complex ridge
oriented north-south. The climate is typical of middle-elevation desert; highly arid, with average annual precipitation of 4.1
inches. Vegetation is sparse, consisting mainly of creosote bush, Mormon tea, and low shrubs, with occasional small barrel cacti.
There are no trees on the mineralized area. Year-round mining operations are entirely possible.


 


Beatty is a town of 1,200 serving as a transit point and service
center for travelers. Motels, restaurants, gas stations, a post office, and several small stores provide basic services for the
community.


 


The Reward Project includes sufficient area to allow development
of mining operations and waste rock storage, and construction of heap leach pads, processing plant, maintenance facilities, and
administrative buildings, as required by the Reward Project. Adjacent public-domain lands are also potentially available if expansion
is considered at a later date.


 


Canyon began acquiring the core of the Reward Project in 2004,
through acquisition of three mineral leases with private owners for patented and unpatented mining claims, and staking of additional
claims. NSR royalties of 3% (actual or advance) are payable on some parcels. There are no back-in or option rights on any of the
properties.


 


Excepting the patented claims owned by the Company, and some
adjacent patented claims held by Barrick, the Reward Project area surface consists of federal public domain lands, administered
by the U.S. Bureau of Land Management (“BLM”). There are no state or private surface tracts within the project
area. Additionally, the Company's millsite claims carry the right for surface use specifically for infrastructure facilities for
mining projects.


 




    	30



    	 



    

 


Water rights for 178 US gallons per minute have been leased
from Barrick Bullfrog, Inc. for ten years from August 2006. The lease can be extended for an additional 10 year period through
2026 with a written request to Barrick Bullfrog Inc., not to be unreasonably withheld.


 


There are no existing environmental liabilities connected with
the property, except for those relating to CR Rewards Corporation’s (“CRRC's”) recent exploration, for
which reclamation bonds have been posted. Canyon incorporated CRRC as a wholly owned subsidiary to own and operate the Reward Project.


 


All environmental, operational, and business permits have been
acquired to conduct the work proposed for the project. Initial development bonds have been posted and substantially all permits
required for mine development and operating activities have been received. During 2009, work was completed on an Environmental
Assessment for the Reward Project. The BLM signed the Record of Decision and Finding of No Significant Impact to approve development
of Reward in August 2009. In January 2010, the Nevada Division of Environmental Protection issued a Reclamation Permit that became
effective February 7, 2010. This permit, subject to the placement of a total of $5.9 million in reclamation bonds, will allow the
Company to construct the Reward Mine. Approximately $0.9 million of the bonding is in place, and the balance is expected to be
in place prior to commencing final construction. Reclamation bonds may be subject to inflation and other adjustments. Other major
permits, including the Class II Air Quality Operating Permit, Water Pollution Control Permit, and a Permit to Change Point of Diversion,
Manner of Use and Place of Use of The Public Waters, have also been issued by the State of Nevada.


 


The Bare Mountains lie in a complex tectonic area within the
Basin and Range province. Several generations of tectonic events have emplaced and shaped the rocks of interest, and have engendered
precious-metals mineralization at Reward and elsewhere. The Bare Mountains consist mainly of Upper Proterozoic and Lower Paleozoic
marine sedimentary rocks, overlain toward their north end by Tertiary volcanic rocks. The sedimentary sequence which hosts mineralization
at Reward consists of weakly deformed, barely-metamorphosed marine clastic and carbonate rocks of Late Proterozoic and Early Cambrian
age. Beds generally strike northwesterly and dip to the northeast at moderate to high angles.


 


The Bare Mountains are a structurally complex terrain, formed
by Mesozoic compressional deformation which was overprinted by several stages and types of Tertiary tectonism. Faulting, both high
and low angle, occurred during the Tertiary. The sedimentary succession generally dips north or northeast at 10-30 degrees. Displacements
on individual faults range from several hundred to over 1,000 ft..


 


The Reward mineralization is localized along a north-trending,
high-angle structure, the Reward Fault which strikes N-S to N15oW, and dips steeply east. Sub-parallel faults of similar nature
traverse the Gold Ace workings (the “Gold Ace Shear”). These faults traverse brittle quartzites and siltstones,
and tend to form shatter zones up to 300 ft. wide, with numerous slip surfaces. Vertical displacement along the Reward Fault is
approximately 200 to 300 ft.. Right-lateral displacement might also have occurred.


 


Gold mineralization of the Reward Project appears to be related
to post-detachment, late Tertiary extensional faulting. The mineralization can be classed as a low-sulfide stockwork with mesothermal
characteristics, based on its structure and mineralogy. The geometry and mineralogy of the mineralization within the proposed open
pits are sufficiently well-known that the identification of mineralization with mineable continuity and of consistent mineralogy
is readily achievable. The Reward and adjacent Gold Ace zone mineralization is hosted in clastic marine sediments of the Wood Canyon
Formation and Stirling Quartzite, which have been highly fractured and sheeted within the structural zone comprising the Reward
Fault and related faults.


 




    	31



    	 



    

 


The Reward Project zone of faulting and stockworking strikes
nearly north-south, and dips moderately to the east. The mineralized zone of veining and stockworking varies 15 to 140 ft. thick
and 2,000 ft. long, lying on the hanging wall of the Reward Project fault. Mineralization remains open at depth below 400 ft.,
and along strike to the south. The mineralized zone remains open to the east along the southern 1,000 ft. of strike. North of the
Reward topographic saddle, mineralizing fluids followed discrete fault/veins and formed massive white quartz veins, from 1 to 5
ft. wide, separated by about 100 ft. of generally unmineralized Wood Canyon clastics which host narrow quartz stringers. South
of the Reward saddle, mineralizing fluids invaded a micro-fractured quartzite hanging wall zone, depositing auriferous pyrite in
fractures, veinlets, and stockworks, resembling a wide disseminated deposit. Gold mineralization clearly favors quartzite lithologies.



 


The Gold Ace zone was the site of small-scale mining at some
time prior to 1942, some of which took place along low-angle 15 degrees) east-dipping structures. Mineralization is hosted in phyllitic
quartzose siltstone of the Wood Canyon formation.


 


Visible minerals of economic interest at Reward are sparse:
in general, only pyrite and goethite after pyrite are seen, and they only occasionally make up more than 2% of the rock in mineralized
zones.


 


Gold mineralization at Reward appears to be closely linked to
structures and structural preparation. Lithologies such as quartzite and siltstone, which fractured in a brittle manner within
the fault zone, provided fertile ground for subsequently invading mineralization fluids. Further work by Canyon Resources has confirmed
this association. Limestone interbeds can be mineralized when they are silicified and therefore brittle.


 


Canyon’s 2006 drill hole RC-21 revealed a deep mineralized
zone intercepted over 185 ft. and averaging 0.031 opt Au, starting at 185 ft.. Within this zone were 60 ft. averaging 0.066 opt.
The RC-21 drill hole was oriented steeply toward the east, from a collar on the east edge of the outcrop of the main mineralized
zone. Follow-up work by the Company in 2011 confirmed and extended this zone of “bedded” mineralization to the east
of RC-21 and the zone remains open to the east and southeast.


 


The presence of gold at the Reward Project has been known since
at least 1913, when gold was found at the Gold Ace property. Later, the Good Hope adit at Reward proper shipped some high-grade
ore. Minor activity occurred during 1957 and 1987, when Homestake drilled several holes. Subsequent exploration and drilling through
1999 was undertaken by a succession of companies, including Barrick. By 1999, three trenches, four rotary holes, four core holes,
and 279 reverse-circulation holes had been opened on the property, including prospects to the north and beneath pediments to the
south and east. This work defined the Reward and Gold Ace mineralized zones.


 


Canyon drilled 21 reverse-circulation holes in 2006 and four
diamond core holes in 2007, which successfully confirmed earlier drilling results. The Company continued to in-fill drill and expand
the mineralized zone to the south and southeast of the previously defined reserves by completing 15 reverse circulation exploration
drill holes in 2011. All 2006 through 2011 drill holes are located within the Reward zone or on the peripheries thereof.


 


A total of 329 holes have been drilled with a total length of
120,290 ft. 322 of the drill holes were drilled with reverse circulation for a total length of 118,087 ft.


 


In July 2012, the Company announced the results of a new NI
43-101 Technical Report for the Reward Gold Project. The Company contracted with Chlumsky, Armbrust, & Meyer LLC (“CAM”)
of Lakewood, Colorado, to prepare the Technical Report in order to consolidate information in relation to the mineral resource
estimate, mineral reserve estimate and update the feasibility information for Reward.


 


The mineral resource and reserve estimates reported in the Technical
Report are based entirely on drilling, with the exception of three trenches, which were treated statistically as low-angle drill
holes. The majority of drilling was completed prior to Canyon's acquisition of the Reward Project in 2004. Canyon's and the Company’s
drilling and sampling were conducted under the direct supervision of a designated qualified person. The drilling did not present
any unusual problems. Intervals selected for sampling by the geologist were determined by the visible presence of quartz veinlets
and sulfides, in conjunction with results from previous drilling. Canyon's and the Company’s work is very well-documented,
but the 1999 and earlier programs have little procedural documentation available. CAM believes that Canyon’s and the Company’s
sample preparation, security and analytical procedures were adequate to ensure the integrity of data. CAM’s verification
procedures indicate that the earlier databases are also acceptable.


 




    	32



    	 



    

 


Most of the 1995 Barrick holes had laboratory assay sheets from
either the ALS Chemex or Barringer Laboratories. Photocopies of the ALS Chemex certificates indicated that laboratory procedures
were consistent with current accepted industry practice. The fact that four to seven kg samples were used indicates that a relatively
large sample was taken at the drill rig, which is also consistent with current accepted practice. Chemex was diligent in using
internal blanks, standards, and duplicates, in every batch. While the Barrick assay program does not conform to current practice
of including field blanks, standards, and duplicates, CAM believes that the Barrick database was prepared according to accepted
engineering practice at the time, and is suitable for use in a feasibility study if statistically confirmed by drilling and assaying
using current standard practices.


 


Canyon and the Company followed procedures described in their
written protocols, under the headings Drill Sample Preparation and Analysis and Security and Chain of Custody . Canyon and the
Company employees, corporate officers, or corporate directors were not involved in the drill sample collection or preparation process.


 


ALS Chemex Laboratories of Sparks, Nevada performed sample preparation
and assays for Canyon and some of the 1995 Barrick samples. ALS Chemex in Sparks/Reno maintains ISO 9001:2008 certification and
has received accreditation to ISO/IEC 17025:2005 from the Standards Council of Canada (SCC) for fire assay Au by atomic absorption.
ALS Chemex standard specifications for sample preparation are clearly defined and monitored. ALS Chemex performed one-assay ton
fire assays for gold with an atomic absorption finish utilizing written procedures Au-AAS25 and Au-AA23.


 


Canyon submitted two standards with known values per 20 samples,
two blanks with every sample shipment, and a duplicate of coarse reject or split core for every 20 samples. Five percent of all
the pulps assaying over 0.5 opt were to be submitted to a second laboratory as part of a check assay program; however, drilling
at Reward did not encounter the high grade samples.


 


As an ISO 9001:2000 certified laboratory in 2006, ALS Chemex
followed rigid control procedures as described on their website. The QC/QA procedures encompass sample preparation and all stages
of assaying including review of internal blanks, standards, and duplicates in addition to those supplied by clients as part of
routine sample shipments.


 


The assay database provided to CAM by William Stanley, the Company’s
Vice President of Exploration and a qualified person as defined under NI 43-101, contained data from 332 sample openings totaling
120,560 ft. in length, with 21,121 assayed intervals. The drill holes were mostly reverse circulation holes, with a few rotary
and core holes. The holes were drilled between 1987 and 2011 by Homestake, GEXA, TECO, Cloverleaf, Pathfinder, US Nevada, Barrick,
Marigold/Glamis, Canyon, and the Company.


 


CAM used automated data processing procedures to ensure consistency
and minimize errors in the database. The standard check procedures showed expectable results, and CAM considers the quality of
the supplied database sufficient for NI 43-101 mineral resources and reserves estimation.


 


For the 15 reverse circulation drill holes completed by the
Company in 2011, the sampler collected the sample at the drill and placed washed cuttings into the chip trays under the supervision
of William Stanley. Samples were collected directly into cloth sample bags, labeled without reference to the drill hole interval
for security, allowed to drain at the drill site for one or two days, and then transported to the secure drill laydown yard for
pre-shipment storage. Prior to shipment to the assay laboratory, the Company inserted certified assay standards and blanks into
the sample sequence as part of the QA/QC protocol. The ISO 9001:2000 certified analytical laboratory Inspectorate America Corporation
located in Sparks, Nevada was used for assay analysis. Inspectorate assay results for the QA/QC standards, blanks, and duplicates
associated with the Company’s 2011 reverse circulation drilling program.


 




    	33



    	 



    

 


CAM statistically analyzed the results of Barrick’s bulk-density
measurements on 65 surface and underground hand samples from Reward. Barrick’s methodology was to weigh samples in air, then
seal them in acetate-polyurethane before weighing in water. The average value specific gravity or bulk density obtained was 2.60
grams per cubic centimeter.


 


The model used for mineral resource estimation is an update
of an earlier block model developed by CAM in 2007. The updated model incorporates drill data from 15 the Company’s reverse
circulation holes drilled in 2011, and six Canyon reverse circulation holes drilled in 2006. Data from a total of 332 drill holes
and three trenches was used in the model.


 


The majority of the higher-grade material present within the
study area occurs within nine sometimes adjacent pods or zones which have been modeled by wireframes within the block model. The
wireframes used by CAM were developed by William Stanley. CAM reviewed the wireframes and found that they were consistent with
the drill hole database and have been prepared according to accepted engineering practice. Grades were estimated by kriging of
five foot composites capped at 0.400 ounces per ton gold (opt). The basic resource estimation methodology of constraining the estimate
by wireframes, developing the resource model using 5 x 5 x 5' blocks to precisely reflect the wireframes, estimating resources
by kriging with a sector search, re-blocking the small blocks to 10 x 20 x 20 to reflect the expected nature of mining equipment,
and classifying resources by the distance to the nearest composite were unchanged. Changes to the resource estimation methodology
included constraining the estimation the individual wireframes and changing the search within the wireframes to 250 x 250 x 83
feet with the search oriented sub parallel to the major axis of the wireframe. CAM expanded the search within the wireframes to
allow more data points to be used in estimation but the distance required for classification remained the same.


 


The mineral resource estimate is summarized in the following
table.


 





	2012
    Mineral Resources for the Reward Gold Project, Nye County, Nevada	 
	Imperial	 
	Cut-Off	 	 	Measured	 	 	Indicated	 	 	Measured
    & Indicated	 	 	Inferred	 
	oz/ton
    

    Au	 	 	Tons	 	 	oz/ton
    

Au	 	 	Ounces	 	 	Tons	 	 	oz/ton
    

Au	 	 	Ounces	 	 	Tons	 	 	oz/ton
    

Au	 	 	Ounces	 	 	Tons	 	 	oz/ton
    

Au	 	 	Ounces	 
	 	0.000	 	 	 	5,524,000	 	 	 	0.0198	 	 	 	109,400	 	 	 	102,739,000	 	 	 	0.0036	 	 	 	375,000	 	 	 	108,263,000	 	 	 	0.0045	 	 	 	484,300	 	 	 	5,604,000	 	 	 	0.0099	 	 	 	55,400	 
	 	0.006	 	 	 	4,692,000	 	 	 	0.0227	 	 	 	106,400	 	 	 	13,363,000	 	 	 	0.0192	 	 	 	256,200	 	 	 	18,055,000	 	 	 	0.0201	 	 	 	362,600	 	 	 	4,757,000	 	 	 	0.0138	 	 	 	65,600	 
	 	0.008	 	 	 	4,281,000	 	 	 	0.0242	 	 	 	103,500	 	 	 	11,815,000	 	 	 	0.0208	 	 	 	245,400	 	 	 	16,096,000	 	 	 	0.0217	 	 	 	348,900	 	 	 	3,358,000	 	 	 	0.0167	 	 	 	56,000	 
	 	0.010	 	 	 	3,851,000	 	 	 	0.0259	 	 	 	99,600	 	 	 	10,381,000	 	 	 	0.0224	 	 	 	232,600	 	 	 	14,232,000	 	 	 	0.0233	 	 	 	332,100	 	 	 	2,560,000	 	 	 	0.0191	 	 	 	48,800	 









 





	Metric	 
	Cut-Off	 	 	Measured	 	 	Indicated	 	 	Measured & Indicated	 	 	Inferred	 
	g/t Au	 	 	Tonnes	 	 	g/t Au	 	 	Ounces	 	 	Tonnes	 	 	g/t Au	 	 	Ounces	 	 	Tonnes	 	 	g/t Au	 	 	Ounces	 	 	Tonnes	 	 	g/t Au	 	 	Ounces	 
	 	0.00	 	 	 	5,011,289	 	 	 	0.68	 	 	 	109,300	 	 	 	93,203,253	 	 	 	0.13	 	 	 	375,000	 	 	 	98,214,542	 	 	 	0.15	 	 	 	484,300	 	 	 	5,083,863	 	 	 	0.34	 	 	 	55,400	 
	 	0.21	 	 	 	4,256,511	 	 	 	0.78	 	 	 	106,400	 	 	 	12,122,710	 	 	 	0.66	 	 	 	256,200	 	 	 	16,379,220	 	 	 	0.69	 	 	 	362,600	 	 	 	4,315,478	 	 	 	0.47	 	 	 	65,600	 
	 	0.27	 	 	 	3,883,658	 	 	 	0.83	 	 	 	103,500	 	 	 	10,718,388	 	 	 	0.71	 	 	 	245,400	 	 	 	14,602,046	 	 	 	0.74	 	 	 	348,900	 	 	 	3,046,326	 	 	 	0.57	 	 	 	56,000	 
	 	0.34	 	 	 	3,493,568	 	 	 	0.89	 	 	 	99,600	 	 	 	9,417,485	 	 	 	0.77	 	 	 	232,500	 	 	 	12,911,053	 	 	 	0.80	 	 	 	332,100	 	 	 	2,322,393	 	 	 	0.65	 	 	 	48,800	 





 


Note: The numbers in the resource tables above may not precisely
add up due to rounding. The Company utilizes the 0.006 oz/ton Au cut-off (0.21 g/t Au) as the base case cut-off grade based upon
the Company’s Briggs Mine operating costs. Mineral resources include mineral reserves.


 


Inferred resources are considered too speculative geologically
to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources
that are not mineral reserves do not have demonstrated economic viability.


 




    	34



    	 



    

 


Mineral reserves are classified as proven and probable material
contained within the ultimate pits, and summarized using measured and indicated resource classifications. The economic model used
to develop mineral reserves is based upon a long term gold price of US$1,300 per troy ounce and an average 80% metallurgical recovery
rate. Proven and probable mineral reserves for the Reward Project are estimated at 11.86 million tons of ore grading 0.022 troy
ounces per ton gold. Waste rock is estimated to be 36.4 million tons for a stripping ratio of 3.07 (tons of waste per ton of ore).
The internal dollar value cut-off used to report reserves covers the costs of ore processing, G&A and incremental ore mining.
Mineral Reserves for the Reward Project have an effective date of December 31, 2011, and are summarized in the following Table.


 


	Reward Project Mineral Reserves - December 31, 2011
		 	
	 	Ore (> $0.01/ton - internal cut-off)	 
	Area	 	Reserve

                                                        Classification
	 	Tons 
(x 1000)	 	 	Au Grade 
(opt)	 	 	Contained Au 

Ounces (x 1000)	 
	Reward	 	Proven	 	 	3,491.8	 	 	 	0.0249	 	 	 	87.1	 
	 	 	Probable	 	 	7,812.1	 	 	 	0.0214	 	 	 	167.3	 
	 	 	Sub-Total	 	 	11,303.9	 	 	 	0.0225	 	 	 	254.3	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Gold Ace	 	Proven	 	 	181.4	 	 	 	0.0198	 	 	 	3.6	 
	 	 	Probable	 	 	370.9	 	 	 	0.0213	 	 	 	7.9	 
	 	 	Sub-Total	 	 	552.3	 	 	 	0.0208	 	 	 	11.5	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total - All Areas	 	Proven	 	 	3,673.1	 	 	 	0.0247	 	 	 	90.6	 
	 	 	Probable	 	 	8,183.1	 	 	 	0.0214	 	 	 	175.2	 
	 	 	Grand Total	 	 	11,856.2	 	 	 	0.0224	 	 	 	265.8	 



 


Notes:


		·	Mineral Reserves are reported using a gold price of US$1,300/oz.



		·	Mineral Reserves are reported using an internal net value > U.S. $0.01 (excluding mining cost).



 


Contained metal is estimated to be 265.8 thousand troy ounces
of gold. Recoverable metal is estimated to be 212.6 thousand troy ounces of gold. Silver is considered to be economically insignificant.
The results of the economic analysis to support mineral reserves represent forward-looking information that is subject to a number
of known and unknown risks, uncertainties and other factors that may cause actual results to differ materially from those presented
here. Areas of uncertainty that may materially impact mineral reserve estimation include:


 


		•	Commodity price assumptions;



		•	Capital and operating cost estimates; and



		•	Geotechnical slope designs for pit walls.



 


The Reward Project is planned to be a conventional open pit
operation with mining conducted by front-end loaders paired with 100-ton haul trucks and ore processed via heap leaching. Ore production
is scheduled at 5,385 tons per day and total material production (mineral reserve and waste) generally ranges between 20,000 and
25,000 tons per day. Operations will be conducted on 20-foot benches.


 


A mixture of new and used mining equipment will be utilized
for the project. Material will be excavated with CAT 992 loaders and CAT 777 haul trucks will be used to haul ore to the crusher
and waste to the waste dumps. Due to the small size of the ultimate pit and the short mine life, no conventional large-scale phasing
was developed for Reward. The Good Hope area on the north end of the Reward area was sequenced first, followed by the Gold Ace
pits and the Bull Moose areas.


 


Ore from the Good Hope area from the 4,180 bench and below will
be hauled to the crusher via the North haul road which exits to the west side of the northern end of the Good Hope area. This is
a considerably longer haul than that for the ore mined from the Bull Moose areas. Ore mined from the Bull Moose areas follows the
South Pit haul road exiting to the south.


 




    	35



    	 



    

 


The mine production schedule was developed for Reward on a monthly
basis to deliver 5,385 tons of ore per day to the crusher. Sufficient waste mining is scheduled to assure sustained ore release
of the required ore throughout the mine life. Mining will commence in the Good Hope area on the north end of the Reward area followed
by the Gold Ace pits and the Bull Moose areas. The mine life is projected to be approximately 6.5 years and gold will be produced
for approximately 7.5 years. Annual production estimate is summarized in the following Table.


 


	Annual
    Production Summary Estimate
		 	Material
    Mined	 	 	Production	 
	 	 	Ore	 	 	Waste	 	 	Total	 	 	 	 	 	 	 
	Year	 	Tons
    
(x1000)	 	 	Au
    
(opt)	 	 	Au
    Ounces 
(Contained)	 	 	Tons
    
(x1000)	 	 	Tons
    
(x1000)	 	 	Strip
    
Ratio	 	 	Gold
    
Ounces	 
	0	 	 	227.3	 	 	 	0.025	 	 	 	5,677	 	 	 	3,270.4	 	 	 	3,498	 	 	 	14.4	 	 	 	0	 
	1	 	 	1,933.1	 	 	 	0.023	 	 	 	44,826	 	 	 	6,916.2	 	 	 	8,849	 	 	 	3.6	 	 	 	30,146	 
	2	 	 	2,245.1	 	 	 	0.028	 	 	 	62,902	 	 	 	6,052.9	 	 	 	8,298	 	 	 	2.7	 	 	 	44,913	 
	3	 	 	1,915.3	 	 	 	0.022	 	 	 	42,318	 	 	 	8,182.2	 	 	 	10,097	 	 	 	4.3	 	 	 	36,547	 
	4	 	 	1,767.5	 	 	 	0.022	 	 	 	38,239	 	 	 	7,162.3	 	 	 	8,930	 	 	 	4.1	 	 	 	34,881	 
	5	 	 	1,739.7	 	 	 	0.017	 	 	 	28,826	 	 	 	3,265.3	 	 	 	5,005	 	 	 	1.9	 	 	 	28,267	 
	6	 	 	2,028.3	 	 	 	0.021	 	 	 	43,023	 	 	 	1,539.2	 	 	 	3,567	 	 	 	0.8	 	 	 	32,441	 
	7	 	 	0.0	 	 	 	0.000	 	 	 	0	 	 	 	0.0	 	 	 	0	 	 	 	0.0	 	 	 	5,453	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Total	 	 	11,856.2	 	 	 	0.022	 	 	 	265,810	 	 	 	36,388.5	 	 	 	48,245	 	 	 	3.1	 	 	 	212,648	 



 


A variety of mineral processing methods and schemes have been
tested and evaluated by the Company. Results of bottle-roll cyanide leaching tests, large and small diameter column leaching tests,
and a variety of other metallurgical test work, indicates that the Reward ore is readily amenable to precious metals extraction
by standard cyanide heap leaching techniques. Straight heap leaching of all ore crushed to 80% passing 12.5 millimeters (1/2 inch)
is the best process alternative on an economic basis, and also has the lowest technical, operational and commercial risk. This
proven process has been shown to work well and has been successfully applied at other mines. Recent column-leach tests at McClelland
Labs indicate that an overall recovery of 80% appears reasonable for the main leach period with an additional two percent recovery
occurring during drain down and pad restoration.


 


Due to the limited size and scope of the Reward Project, the
proximity to local US Highway 95 and the community of Beatty, the required Reward Project infrastructure is minimal, and mostly
mobile or temporary in nature. The Reward Project Plan of Operations submitted to the BLM includes the following mining and infrastructure
development items:


 


		•	development of the Reward deposit into an open pit mine;



		•	construction of waste rock dumps associated with the
Reward deposit open pits;



		•	construction of a heap leach facility, including heap leach pads, solution collection system, process ponds and tanks, and
a carbon absorption circuit and facility;



		•	operation of a portable/semi portable ore crushing and
stacking facility;



		•	use of a newly completed water well and construction of water delivery pipeline from the well to the project area (approximately
1 mile);



		•	construction of ancillary facilities to support the proposed
operation;



		•	tie-in to the regional electrical power grid;



		•	construction of onsite mine haulage and onsite mine personnel
access roadways; and



		•	ongoing development and exploration to include drilling
and sampling.



 




    	36



    	 



    

 


The proposed operations will directly impact approximately 287
acres within the project boundary. The Company developed a detailed cost estimate for reclamation of the Reward Project using the
Nevada statutory model and calculated a required additional reclamation bond cost of $5.90 million dollars. It is anticipated that
an additional $3.5 million will be required on Phase 2 leach pad construction in late 2015. The Nevada statutory model is an inflexible
model that incorporates rental equipment and Davis & Bacon labor rates. The Company revised the detailed cost estimate for
reclamation based on the equipment fleet owned by the Company (with the exception of scrapers) and equipment rates from the Nevada
Cost Estimator. The revised reclamation cost estimate is $4.0 million dollars.


 


The Company works with a Surety to place bond requirements by
depositing 40% of cash face value as collateral at this and other sites under its control. A Phase 1 bond of $0.86 million has
been placed to allow construction of wildlife fencing, power line construction and water well and pipeline development. Construction
of the wildlife fencing, drilling and completion of the production water well and installation of power lined to the base of the
access road has been completed.


 


Capital cost estimates for the project are summarized in the
following Table.


 


	Summary – Capital Cost (US$)
	Description	 	Item 
Cost	 
	Infrastructure	 	 	 	 
	Roads, Water, Electrical Power, & Support Facilities	 	 	1,941,422	 
	Sub Total	 	 	1,941,422	 
	Mining	 	 	 	 
	Mining; Pre-stripping	 	 	5,746,000	 
	Mining Equipment (trucks, loaders, dozers, etc.)	 	 	20,625,000	 
	Sub Total	 	 	26,371,000	 
	Crushing, Screening, Conveying & Stacking	 	 	 	 
	Crushing & Screening, Conveying & Stacking	 	 	7,879,874	 
	Sub Total	 	 	7,879,874	 
	Heap Leach Facility	 	 	11,929,549	 
	Process Facility	 	 	1,198,643	 
	Communications & Security	 	 	50,648	 
	TOTAL DIRECT COSTS	 	 	49,371,136	 
	OTHER COSTS	 	 	796,921	 
	TAXES, FREIGHT & FEES	 	 	2,055,562	 
	CONTINGENCY	 	 	2,188,442	 
	 	 	 	 	 
	TOTAL CAPITAL COST	 	 	54,412,062	 



 


Of the capital shown above, the Company has committed to finance
the mining equipment under capitalized leases over a four year term. Pre-production capital purchases are estimated to total $21.69
million, pre-stripping $5.24 million, reclamation bond of $2.1 million and other capital of $5.5 million for a total estimated
capital requirement of $34.5 million.


 


Operating cost estimates are summarized in the following Table.


 




    	37



    	 



    

 


 


	Operating Cost Summary
	Area	 	Total Cost 
($ x 1000)	 	 	Unit Cost 
Per Total 
Ton	 	 	Unit Cost 
Per Ore 
Ton	 	 	Unit Cost 
Per Gold 
Ounce 
Sold	 
	Mining	 	 	54,253	 	 	 	1.12	 	 	 	4.58	 	 	 	255.13	 
	Processing	 	 	40,854	 	 	 	0.85	 	 	 	3.45	 	 	 	192.12	 
	Processing	 	 	12,565	 	 	 	0.26	 	 	 	1.06	 	 	 	59.09	 
	Total Site Cost	 	 	107,671	 	 	 	2.23	 	 	 	9.08	 	 	 	506.33	 
	Net Smelter Royalty	 	 	8,267	 	 	 	0.17	 	 	 	0.70	 	 	 	38.88	 
	Transportation and Refining Cost	 	 	276	 	 	 	0.01	 	 	 	0.02	 	 	 	1.30	 
	Nevada Mineral Extraction Tax	 	 	6,353	 	 	 	0.13	 	 	 	0.54	 	 	 	29.88	 
	Total Offsite Cost	 	 	14,897	 	 	 	0.31	 	 	 	1.26	 	 	 	70.05	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	TOTAL CASH COST	 	 	122,568	 	 	 	2.54	 	 	 	10.34	 	 	 	576.39	 



 


The following conclusions were developed in the Technical Report.


 


		1.	The Reward deposit is a vein-stockwork gold-pyrite system
of probable mesothermal origin, hosted in highly-fractured quartzites, siltstones, and limestones of Cambrian to Late Proterozoic
age. It lies within the broad regional fracture zone referred to as the Reward Shear.



 


		2.	Drilling, totaling more than 300 holes, has allowed good
characterization of the geology and mineralization. Two mineralized zones have been defined: the Reward zone (3,000+ feet long
by up to 200 feet wide) and the Gold Ace zone (750 feet long, up to 100 feet wide).



 


		3.	A review of older drilling and assaying (1987-1999) and
statistical comparison with 2006-7 and 2011 drilling by Canyon and the Company shows that the old and new data are suitable for
use in estimation of tonnages and grades.



 


		4.	Mineral resource estimates using a kriged block model
have defined measured and indicated Mineral Resource containing 18 million short tons grading 0.0201 ounces gold per short ton
and containing 362,600 ounces of gold.



 


		5.	Based on bottle-roll and column tests, overall recovery
of gold is estimated to be 80%, plus two percent from residual recovery. Silver recovery was not estimated at this time.



 


		6.	Economic analyses indicate the Reward Project has a positive
rate of return at an assumed gold price of US $1,300.00 per ounce.



 


Continuing development at Reward is being slowed in favor of
funding Pinson, and the Company expects to recommence development as funding permits. Long lead-times for mobile mining equipment
will be taken into consideration in rescheduling development. Once commenced, a nine month construction and start-up period is
anticipated; with gold production commencing three months after construction is completed.


 


Work planned for the remainder of 2012 includes the completion
of final detailed construction design engineering and the completion of a limited in-fill drilling program designed to test the
limits of potentially economic zones and targeting the potential upgrade of gold resources to potential reserves.


 




    	38



    	 



    

 


CONSOLIDATED
capitalization


 


The following table sets forth
the Company’s consolidated capitalization as at June 30, 2012, both before and after giving effect to the Offering. On June
30, 2012, the noon exchange rate quoted by the Bank of Canada was C$1.00 which equals US$0.9822. This rate has been used in the
columns below giving effect to the Offering.


 


	 	 	As at June 30, 2012	 	 	As at June 30, 2012 

After Giving Effect to the

 Offering(1)
	 	 	As at June 30, 2012 After 

Giving Effect to the 

Offering and the Exercise 

of the Over-Allotment 

Option(2)
	 
	Long-term debt	 	US$	25,321,700	 	 	US$	25,321,700	 	 	US$	25,321,700	 
	Shareholders’ equity	 	 	 	 	 	 	 	 	 	 	 	 
	Share capital(3)	 	US$	107,190,000
	 	 	US$	121,923,000
	 	 	US$	124,132,950
	 
	 	 	 	(121,679,877 shares)	 	 	 	(136,679,877 shares)	 	 	 	(138,929,877 shares)	 
	Contributed surplus and accumulated other comprehensive gain	 	US$	5,694,600	 	 	US$	5,694,600	 	 	US$	5,694,600	 
	Retained deficit	 	US$	(19,165,000	)	 	US$	(19,165,000	)	 	US$	(19,165,000	)
	Total capitalization	 	US$	93,719,600	 	 	US$	108,452,600	 	 	US$	110,662,550	 



 





 



Notes:


 


		(1)	Assuming completion of
the Offering, but before deducting the Underwriters’ Fee and expenses of the Offering, and assuming no exercise of the Over-Allotment
Option. The Sprott Resource Lending Partnership has waived its right under ss. 3.2(c) of
its August 2011 credit agreement with the Company that would have required the application of 25% of the gross proceeds of the
Offering to pay down the principal amount of the subject credit facility. Consequently, the Offering will have no immediate impact
on the pro-forma debt amount.



 


		(2)	Assuming completion of the Offering and exercise of the
Over-Allotment Option in full, but before deducting the Underwriters’ Fee and expenses of the Offering. The Sprott Resource
Lending Partnership has waived its right under ss. 3.2(c) of its August 2011 credit agreement with the Company that would have
required the application of 25% of the gross proceeds of the Offering to pay down the principal amount of the subject credit facility.
Consequently, the Offering will have no immediate impact on the pro-forma debt amount.



 


		(3)	Does not include 900,000 Common Shares issuable pursuant
to the exercise of the Broker Warrants (1,035,000 Common Shares, if the Over-Allotment Option is exercised in full) and 10,825,224
Common Shares issuable upon the exercise of outstanding warrants and vested stock options.



  


use of proceeds


 


The estimated net proceeds to the Company from the issue and
sale of the Shares will be approximately C$13,922,000 after deducting the Underwriters’ Fee of C$900,000 and the expenses
of the Offering expected to be C$178,000 (assuming the Over-Allotment Option is not exercised). The Company intends to use the
net proceeds of the Offering for the continued development of the Pinson underground and Reward Projects as well as other properties
and for general corporate and working capital purposes. The approximate amount of the net proceeds to be allocated to the foregoing
uses is as follows:


 


	Use of Proceeds	 	Total Funds
	Ongoing development of Pinson underground Project	 	C$	11.5 million
	Design engineering and drilling for Reward Project	 	C$	1.3 million
	General working capital	 	C$	1.1 million
	Total	 	C$	13.9 million



 




    	39



    	 



    

 


 


For the remainder of 2012 and in the first quarter of 2013,
the Company plans to focus on the development of the underground mine at the Pinson Project and bring it into production. Cash
flow from the Briggs Mine was earmarked for this development work, but a production upset during the summer of 2012 reduced cash
balances and caused a slowdown in development activities at the Pinson Project. This slowdown threatened the successful start-up
of operations due to the need to complete various surface constructions prior to the onset of winter weather and its potential
to impact construction schedules. Work to be accomplished includes completion of expanded surface facilities including installation
of production sized lined stock pad area, extension of power lines, water mixing pond construction, installation of two dewater
wells and a truck scale, purchase of surface mobile equipment and completion of assay lab facilities. Underground development includes
the advancement of spiral decline to depth, ventilation facilities and x-cuts to ore stoping areas. Net proceeds from the sales
of the Shares will be utilized to fund acceleration of surface construction activities and the development of underground workings
and ore stoping areas. The development of additional stoping areas will help to accelerate the production rates from the mine.
These activities are expected to be completed over the next two quarters. Ongoing spending requirements will be offset by increasing
cash flow from operations. The Company's goal is to commence production in the fourth quarter of 2012, which should allow the Pinson
underground Project to generate positive cash flow in 2013, in turn contributing to the growth of positive corporate earnings and
shareholder value.


 


Other net proceeds shall be utilized on the Reward Project to
complete final design engineering and complete a limited in-fill drilling program which targets the possible upgrade of gold resources-to-reserves.
The drilling program will help to delineate the maximum extents of the potential mining pit area under current economic conditions.
This spending will occur over the next two quarters. Additional proceeds will be used to reduce outstanding payable balances and
other general working capital needs. If the Over Allotment Option is exercised, the Company intends to use the additional proceeds
to further develop the Pinson underground and Reward Projects. These activities will be supplemented by any positive excess cash
flow produced from the Briggs Mine during this period.


 


The amount actually expended for the purposes described above
could vary significantly depending on, among other things, the progress of the Company's development programs. While the Company
intends to use the proceeds of the Offering as described above, there may be circumstances where, for sound business reasons, a
reallocation of funds may be deemed prudent or necessary.


 


plan of
distribution


 


Pursuant to the Underwriting Agreement dated August 27, 2012
between the Company and the Underwriters, the Company has agreed to sell and the Underwriters have agreed to purchase, subject
to compliance with all necessary legal requirements and with the terms and conditions of the Underwriting Agreement, on September
12, 2012 or on such other date as the Company and the Underwriters may mutually agree (provided such date is not more than 42 days
after the date of a final receipt for the final short form prospectus for this Offering), 15,000,000 Shares at the Offering Price
for gross proceeds of C$15,000,000 (and up to 2,250,000 Additional Shares for gross proceeds of C$2,250,000 if the Over-Allotment
Option is exercised in full).


 


The total net consideration payable to the Company against delivery
of certificates representing the Shares will be approximately C$13,900,000 after deducting the Underwriters’ Fee and expenses,
and assuming no exercise of the Over-Allotment Option. The Offering Price was determined by negotiation between the Company and
the Underwriters with reference to the market price of the Common Shares. The Company has agreed to pay the Underwriters the Underwriters’
Fee equal to 6.0% of the gross proceeds of the Offering (including proceeds realized pursuant to the exercise of the Over-Allotment
Option). Upon completion of the Offering, the Company will pay to the Underwriters the Underwriters’ Fee of C$900,000 (C$1,035,000
if the Over-Allotment Option is exercised in full).


 


The TSX has conditionally approved the listing of (i) the Shares
and the Additional Shares (as hereinafter defined) and (ii) the Common Shares issuable pursuant to the exercise of the Broker Warrants
(as hereinafter defined). Listing is subject to the Company fulfilling all of the listing requirements of the TSX on or before
November 23, 2012.


 




    	40



    	 



    

 


The Company has also granted the Underwriters the Over-Allotment
Option, exercisable in whole or in part at the sole discretion of the Underwriters at any time until 5:00 p.m. (Vancouver time)
on the day that is 30 days following the Closing Date, to purchase up to an additional 2,250,000 Common Shares at the Offering
Price. If the Over-Allotment Option is exercised in full, the total number of Shares sold under the Offering will be 17,250,000,
the cumulative gross proceeds will be C$17,250,000, the total Underwriters’ Fee will be C$1,035,000 and total net proceeds
to the Company will be C$16,215,000, before deducting the expenses of the Offering.


 


The Company will also issue that number of non-transferable
Broker Warrants equal to 6.0% of the total number of Shares sold under the Offering. Each Broker Warrant will be exercisable for
one Common Share at C$1.00 for a period of 18 months after the Closing Date.


 


Upon completion of the Offering, the Company will grant the
Underwriters an aggregate of 900,000 Broker Warrants (1,035,000 if the Over-Allotment Option is exercised in full).


 


In addition, the Company has agreed to pay all costs and expenses
of the Underwriters incurred in connection with the Offering, including the reasonable out-of-pocket expenses of the Underwriters
and the reasonable fees and disbursements of the Underwriters’ counsel and consultants.


 


Subscriptions for Shares will be received subject to rejection
or allotment in whole or in part and the right to close the subscription books at any time without notice. The Closing of the sale
of Shares pursuant to the Offering will take place on the Closing Date. Certificates representing the Shares will be available
for delivery on or about the Closing Date.


 


This Prospectus qualifies the distribution of the Shares and
the Additional Shares, if any, the grant of the Over-Allotment Option, the distribution of the Broker Warrants and the distribution
of the Common Shares underlying the Broker Warrants (1,035,000 if the Over-Allotment Option is exercised in full).


 


This Offering is being made concurrently in the provinces of
British Columbia, Alberta, Ontario and Nova Scotia. Shares may also be sold to qualified purchasers on a private placement basis
outside of Canada without the filing of a prospectus, registration statement or other similar disclosure document pursuant to applicable
and available statutory exemptions.


 


The obligations of the Underwriters under the Underwriting Agreement
are several, and may be terminated at their discretion upon the occurrence of certain stated events including: (i) the occurrence
of any material change or change in any material fact, or the discovery of any previously undisclosed material change or material
fact in relation to the Company that could reasonably be expected to result in a material adverse change in relation to the Company
or have a material adverse effect on the market price or value of the Common Shares; (ii) any inquiry, investigation or other proceeding
is made or any order is issued under or pursuant to any statute of Canada or any province thereof of any statute of the United
States or any state thereof or any stock exchange in relation to the Company or the Company’s securities (except for any
inquiry, investigation, or other proceeding or order based upon activities of the Underwriters and not the Company) which, in the
opinion of the Underwriters, acting reasonably, prevents or restricts trading in or the distribution of the Shares or materially
and adversely affects or might reasonably be expected to materially and adversely affect the market price or value of the Shares;
(iii) the existence of any event, action, state, condition or major financial occurrence of national or international consequence
or any law or regulation which, in the opinion of the Underwriters, seriously adversely affects or involves, or will seriously
adversely affect or involve, the financial markets or the business, operations or affairs of the Company and its subsidiaries,
taken as a whole; or (iv) the Company is in breach of any term, condition or covenant of the Underwriting Agreement or any representation
or warranty given by the Company in the Underwriting Agreement is or becomes false. The Underwriters are, however, obligated to
take up and pay for all of the Shares offered hereby if any of such Shares are purchased under the Underwriting Agreement. Under
the terms of the Underwriting Agreement, the Underwriters and their broker/dealer affiliates and their respective directors, officers,
employees, partners, agents, advisors and shareholders may be entitled to indemnification by the Company against certain liabilities,
including liabilities for misrepresentation in this Prospectus and liabilities under United States securities laws.


 




    	41



    	 



    

 


The Underwriters propose to offer the Shares offered hereby
to the public at a price of C$1.00 per Share. After the Underwriters have made a reasonable effort to sell all of the Shares offered
hereby at that price, the Offering Price may be decreased, and further changed from time to time to an amount not greater than
C$1.00 per Share, and the fee realized by the Underwriters will accordingly also be reduced.


 


Pursuant to policy statements of the Ontario Securities Commission
and Autorité des marchés financiers du Québec, the Underwriters may not, throughout the period of distribution
under this short form prospectus, bid for or purchase any Shares. The foregoing restriction is subject to certain exceptions, as
long as the bid or purchase is not engaged in for the purpose of creating actual or apparent active trading in or raising the price
of such securities. These exceptions include a bid or purchase permitted under the Universal Market Integrity Rules of Market Regulation
Services Inc. relating to market stabilization and passive market making activities and a bid or purchase made for and on behalf
of a customer where the order was not solicited during the period of distribution. Pursuant to the first mentioned exception, in
connection with this Offering and subject to the foregoing, the Underwriters may over-allot or effect transactions which stabilize
or maintain the market price of the Shares at levels other than those which otherwise might prevail on the open market. Such transactions,
if commenced, may be discontinued at any time.


 


For a period commencing as of the date of the Underwriting Agreement
and ending 90 days after the Closing Date, the Company has agreed it will not issue or sell any Common Shares or financial instruments
convertible or exchangeable into Common Shares, other than for purposes of directors’, officers’ or employee stock
options or to satisfy rights, warrants, options, agreements, instruments or other arrangements issued or existing as of the date
of the Underwriting Agreement or arm’s length acquisitions of mining companies or mineral projects, without the prior written
consent of Canaccord Genuity, on behalf of the Underwriters, such consent not to be unreasonably withheld or delayed.


 


This Prospectus does not constitute an offer to sell or a solicitation
of an offer to buy any of the Shares under the Offering in the United States or to, or for the benefit or account of, any U.S.
Person (as defined in Regulation S under the U.S. Securities Act) or person in the United States. The Common Shares and Warrants
comprising the Shares offered under this Prospectus and the Common Shares issuable pursuant to the exercise of the Warrants have
not been and will not be registered under the U.S. Securities Act or the securities laws of any state of the United States and,
subject to certain exceptions, may not be offered or sold, directly or indirectly, in the United States or to, or for the account
or benefit of, any U.S. Person or person in the United States unless registered under the U.S. Securities Act and applicable state
securities laws or in reliance on an exemption therefrom. The Underwriters have agreed that they will not offer, sell or deliver
the Common Shares and Warrants comprising the Shares under the Offering within the United States, or to or for the account or benefit
of a U.S. Person or person within the United States, except in accordance with the Underwriting Agreement. The Underwriting Agreement
permits the Underwriters to (a) designate “accredited investors” that satisfy one or more of the criteria set forth
in Rule 501(a) of Regulation D under the U.S. Securities Act to purchase Shares directly from the Company in transactions exempt
from registration pursuant to Rule 506 of Regulation D and/or Section 4(2) under the U.S. Securities Act and (b) to resell Shares
to “qualified institutional buyers” (as defined in Rule 144A(a)(1)) pursuant to Rule 144A. The Underwriters have agreed
that, except for such offers and sales, all offers and sales of Shares under the Offering will be made outside the United States
to non-U.S. Persons in compliance with Rule 903 of Regulation S.


 




    	42



    	 



    

 


description
of securities to be distributed


 


Common Shares


 


Common Shares comprise part of the Shares offered for sale under
the Offering, including Additional Shares issuable pursuant to the exercise of the Over-Allotment Option. The Company is authorized
to issue an unlimited number of Common Shares. As at the date of this Prospectus, there are 121,791,900 Common Shares issued and
outstanding. As of the Closing Date, and assuming that the Offering is fully subscribed and that no further Common Shares of the
Company are issued upon the exercise of outstanding warrants or options, the Company will have 136,791,900 Common Shares issued
and outstanding (139,041,900 Common Shares if the Over-Allotment Option is exercised in full).


 


The Common Shares rank equally as to dividends, voting power
and participation in assets and in all other respects, on liquidation, dissolution or winding-up of the Company, whether voluntary
or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its
affairs after the Company has paid out its liabilities. The holders of the Common Shares are entitled to one vote for each share
on all matters to be voted on at any meeting of the shareholders of the Company. The Company does not currently pay dividends on
the Common Shares. Any determination to pay dividends in the future is at the discretion of the Company's board of directors and
will be made based upon the Company's financial condition and other factors deemed relevant by the board of directors.


 


Broker Warrants


 


The Company will issue to the Underwriters on Closing that number
of non-transferable Broker Warrants equal to 6.0% of the total number of Shares sold pursuant to the Offering. Each Broker Warrant
is exercisable to acquire one Common Share at a price of C$1.00 for a period of 18 months from the Closing Date.


 


The terms governing the Broker Warrants will be set out in the
certificates representing the Broker Warrants and will include, among other things, customary provisions for the appropriate adjustment
of the class and number of the Common Shares issuable pursuant to any exercise of the Broker Warrants upon the occurrence of certain
events, including any subdivision, consolidation or reclassification of the Common Shares, any payment of stock dividends to holders
of all of the Common Shares, any capital reorganization of the Company, or any merger, consolidation or amalgamation of the Company
with another corporation or entity, as well as customary amendment provisions.


 


The Underwriters, as holders of the Broker Warrants, will not
as such have any voting right or other right attached to Common Shares until the Broker Warrants are duly exercised for Common
Shares as provided for in the certificates representing the Broker Warrants.


 




    	43



    	 



    

 


PRIOR SALES


 


The following table sets out the details of Common Shares and
securities convertible into Common Shares issued by the Company within the 12 months prior to the date of this Prospectus.


 


	Date of Issue	 	Type of 
 Securities	 	Number of 
 Securities	 	 	Issue or Exercise 
 Price per Security	 	 	Reason for Issue
	August-11	 	Common Shares	 	 	15,000,000	 	 	 	 	 	 	Issued to Barrick on Pinson transaction
	August-11	 	Common Shares	 	 	1,049,119	 	 	 	 	 	 	Issued to Sprott for arrangement fee on credit facility
	September-11	 	Common Shares	 	 	34,806	 	 	$	0.91	 	 	Exercise of Stock Options
	October-11	 	Stock Options	 	 	250,000	 	 	$	0.75	 	 	Grant of Stock Options
	November-12	 	Common Shares	 	 	128,250	 	 	 	0.7	 	 	Warrant exercise
	November-12	 	Stock Options	 	 	50,000	 	 	$	0.94	 	 	Grant of Stock Options
	December-11	 	Stock Options	 	 	2,400,000	 	 	$	0.90	 	 	Grant of Stock Options
	December-12	 	Common Shares	 	 	15,000	 	 	$	0.70	 	 	Warrant exercise
	January-12	 	Common Shares	 	 	102,500	 	 	$	0.70	 	 	Warrant exercise
	January-12	 	Stock Options	 	 	75,000	 	 	$	1.01	 	 	Grant of Stock Options
	February-12	 	Common Shares	 	 	618,556	 	 	 	 	 	 	Issued to Sprott for extension of credit facility
	February-12	 	Common Shares	 	 	2,802,500	 	 	$	0.70	 	 	Warrant exercise
	March-12	 	Common Shares	 	 	57,500	 	 	$	0.70	 	 	Warrant exercise
	March-12	 	Stock Options	 	 	100,000	 	 	$	1.18	 	 	Grant of Stock Options
	March-12	 	Stock Options	 	 	69,261	 	 	$	0.45	 	 	Stock Option Exercise
	March-12	 	Stock Options	 	 	113,817	 	 	$	0.60	 	 	Stock Option Exercise
	March-12	 	Stock Options	 	 	52,184	 	 	$	0.70	 	 	Stock Option Exercise
	March-12	 	Stock Options	 	 	115,628	 	 	$	0.71	 	 	Stock Option Exercise
	March-12	 	Stock Options	 	 	19,092	 	 	$	0.90	 	 	Stock Option Exercise
	March-12	 	Stock Options	 	 	67,469	 	 	$	1.32	 	 	Stock Option Exercise
	May-12	 	Stock Options	 	 	25,000	 	 	$	0.90	 	 	Grant of Stock Options
	May-12	 	Common Shares	 	 	95,000	 	 	$	0.70	 	 	Warrant exercise
	June-12	 	Common Shares	 	 	7,647	 	 	$	0.71	 	 	Stock Option Exercise
	June-12	 	Common Shares	 	 	6,890	 	 	$	0.60	 	 	Stock Option Exercise
	July-12	 	Common Shares	 	 	27,500	 	 	$	0.70	 	 	Warrant exercise
	August-12	 	Common Shares	 	 	33,661	 	 	$	0.71	 	 	Stock Option Exercise
	August-12	 	Common Shares	 	 	26,310	 	 	$	0.45	 	 	Stock Option Exercise
	August-12	 	Common Shares	 	 	24,552	 	 	$	0.60	 	 	Stock Option Exercise



 








    	44



    	 



    

 


TRADING
PRICE AND VOLUME


 


The Common Shares are listed for trading on the TSX under the
trading symbol “ATN”. The following table sets out the market price range and trading volumes of the Common Shares
on the TSX for the periods indicated.


 


	Period	 	High	 	 	Low	 	 	Volume	 
	2012	 	August	 	 	1.14	 	 	 	0.91	 	 	 	9,484,280	 
	 	 	July	 	 	1.04	 	 	 	0.86	 	 	 	5,300,301	 
	 	 	June	 	 	1.15	 	 	 	0.85	 	 	 	7,552,427	 
	 	 	May	 	 	1.31	 	 	 	0.76	 	 	 	10,845,300	 
	 	 	April	 	 	1.32	 	 	 	0.89	 	 	 	10,762,095	 
	 	 	March	 	 	1.51	 	 	 	1.05	 	 	 	11,824,621	 
	 	 	February	 	 	1.54	 	 	 	0.98	 	 	 	29,216,042	 
	 	 	January	 	 	1.14	 	 	 	0.85	 	 	 	6,510,021	 
	2011	 	December	 	 	0.97	 	 	 	0.77	 	 	 	3,423,659	 
	 	 	November	 	 	1.02	 	 	 	0.76	 	 	 	5,363,958	 
	 	 	October	 	 	0.84	 	 	 	0.66	 	 	 	4,067,027	 
	 	 	September	 	 	0.96	 	 	 	0.70	 	 	 	15,755,909	 
	 	 	August	 	 	0.77	 	 	 	0.72	 	 	 	4,077,682	 



 


On August 31, 2012, the closing price of the Common Shares on
the TSX was C$1.05 per share.


 


risk factors


 


An investment in the securities offered under this Prospectus
is highly speculative and subject to a number of risks. Prospective investors should carefully consider the information
included or incorporated herein by reference in this Prospectus and the Company’s historical consolidated financial statements
and related notes thereto before making an investment decision concerning the Company’s securities. There are various risks,
including those discussed in pages 8 to 13 of the Company’s Annual Information Form, which is incorporated herein by reference,
that could have a material adverse effect on, among other things, the operating results, earnings, properties, business and condition
(financial or otherwise) of the Company. These risk factors, together with all of the other information included or incorporated
by reference in this prospectus, including information contained in the section entitled “Forward-Looking Statements”,
should be carefully reviewed and considered before a decision to invest in such securities is made.


 


Risks Associated with the Offering


 


Common Share Price Volatility and Litigation


 


There can be no assurance that an active market for the Common
Shares will be sustained after the Offering. Securities of mining companies have experienced substantial volatility in the past,
and especially during the last year, often based on factors unrelated to the financial performance or prospects of the companies
involved. These factors include macroeconomic developments in North America and globally, and market perceptions of the attractiveness
of particular industries. The price of the securities of the Company is also likely to be significantly affected by short-term
changes in commodity prices, including precious metal prices or other mineral prices, currency exchange fluctuation, financial
condition or results of operations as reflected in its quarterly earnings reports. Other factors unrelated to the performance of
the Company that may have an effect on the price of the securities of the Company include the following: the extent of analytical
coverage available to investors concerning the business of the Company may be limited if investment banks with research capabilities
do not follow the Company’s securities; lessening in trading volume and general market interest in the Company’s securities
may affect an investor’s ability to trade significant numbers of securities of the Company; the size of the Company’s
public float may limit the ability of some institutions to invest in the Company’s securities; and a substantial decline
in the price of the securities of the Company that persists for a significant period of time could cause the Company’s securities
to be delisted from an exchange, further reducing market liquidity. If an active market for the securities of the Company does
not continue, the liquidity of an investor’s investment may be limited and the price of the securities of the Company may
decline below the Offering Price.


 




    	45



    	 



    

 


As a result of any of these factors, the market price of the
securities of the Company at any given point in time may not accurately reflect the long-term value of the Company. Securities
class-action litigation often has been brought against companies following periods of volatility in the market price of their securities.
The Company may in the future be the target of similar litigation. Securities litigation could result in substantial costs and
damages and divert management’s attention and resources.


 


Dilution from Further Equity Financings


 


In order to finance future operations, the Company may raise
funds through the issuance of Common Shares or the issuance of debt instruments or other securities convertible into Common Shares.
The Company cannot predict the size of future issuances of Common Shares or the size and terms of future issuances of debt instruments
or other securities convertible into Common Shares or the effect, if any, that future issuances and sales of the Company’s
securities will have on the market price of the Common Shares. Any transaction involving the issuance of previously authorized
but unissued shares, or securities convertible into Common Shares, would result in dilution, possibly substantial, to present and
prospective security holders.


 


Discretion in the Use of Proceeds


 


Management of the Company will have discretion concerning the
use of the proceeds of the Offering as well as the timing of their expenditures. As a result, an investor will be relying on the
judgment of management for the application of the proceeds of the Offering. Management of the Company may use the net proceeds
of the Offering in ways that an investor may not consider desirable. The results and the effectiveness of the application of the
proceeds are uncertain. If the proceeds are not applied effectively, the Company’s results of operations may suffer.


 


Risks Relating to the Company


 


Precious and Base Metal Price Fluctuations


 


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


 


Production Costs and Risk Factors at the Briggs Operating
Mines 


 


The cost of gold produced may be impacted by numerous variables
including ore grade and gold recovery, stripping ratio, fuel and consumable costs, labour and benefit cost, equipment operating
and maintenance costs, and numerous other factors. Production risk factors may include labour strife, slope failure, poor gold
recovery, unavailability of skilled labour and management, availability of mining equipment, availability of consumables used in
mining, mine plan implementation, weather, governmental regulations and other operating factors.


 




    	46



    	 



    

 


Negative Operating Cash Flow


 


The Company last incurred negative cash flows from operating
activities in 2010. The Briggs Mine is presently the Company’s sole operating unit which began gold production during the
second quarter of 2009. As a result of unforeseen operating issues, production cost increases already noted, or other causes; negative
operating cash flows could again be incurred.


 


Gold Recovery at the Briggs Mine


 


CR Briggs Corporation, a wholly-owned subsidiary of the Company,
operates the Briggs Mine. Mining operations at the Briggs Mine commenced during 2009 and the project has been producing gold since
the second quarter of 2009. Production of gold doré during 2011 was approximately 32,000 ounces. The Briggs Mine has historically
produced gold using the heap leaching recovery process. This process involves the application of cyanide solutions by drip irrigation
to ore stacked on an impervious pad. As the solution percolates through the heap, gold is dissolved from the ore into solution.
This solution is collected and processed with activated carbon that collects the gold from the solution onto the carbon. The gold
laden carbon is further processed through pressure stripping the carbon into a more highly concentrated gold bearing solution.
The gold bearing solution is further concentrated by an electrowinning circuit, which collects the gold onto electric cathodes
which are then melted into gold doré bars. Factors impacting gold recovery include variation in crushed ore size, ore grade,
rock type, solution concentration, lime addition, temperature, rainfall, irrigation time, pressure stripping, refining efficiencies,
leach pad dynamics and other associated factors.


 


Environmental Factors


 


All phases of the Company’s operations are subject to
environmental regulation and permitting in the various jurisdictions in which the Company operates. Environmental legislation is
evolving in a manner which will require stricter standards and enforcement, increased fines and penalties for non-compliance, more
stringent environmental assessments of proposed projects and a heightened degree of responsibility for companies and their officers,
directors and employees. There is no assurance that future changes in environmental regulation, if any, will not adversely affect
the Company’s operations. Environmental hazards may exist on the Company’s properties unknown to the Company at present,
which have been caused by previous or existing owners or operators of the properties.


 


Government Regulation


 


Operations, development and exploration on the Company’s
properties are affected to varying degrees by government regulations relating to matters such as, but not limited to, environmental
protection, health, safety and labour, mining law reform, restrictions on production, price controls, tax increases, maintenance
of claims, tenure, and expropriation of property. There is no assurance that future changes in such regulation, if any, will not
adversely affect the Company’s operations.


 


Operating Hazards and Risks


 


Mining operations generally involve a high degree of risk, which
even a combination of experience, knowledge and careful evaluation may not be able to overcome. Hazards such as unusual or unexpected
formations and other conditions are involved. Operations in which the Company has a direct or indirect interest will be subject
to all the hazards and risks normally incidental to exploration, development and production of precious and base metals, any of
which could result in work stoppages, damage to or destruction of mines and other producing facilities, damage to life and property,
environmental damage and possible legal liability for any or all damage. The Company maintains liability insurance in an amount
that it considers adequate for its operations; however, the Company may become subject to liability for pollution, cave-ins or
hazards against which it cannot insure or against which it may elect not to insure. The payment of such liabilities may have a
material adverse effect on the Company’s financial position.


 




    	47



    	 



    

 


Estimation of Reserves and Resources and Precious and
Base Metal Recovery


 


There is a degree of uncertainty attributable to the estimation
of reserves and resources and corresponding grades being mined or dedicated to future production. Until reserves or resources are
actually mined and processed, quantity of mineralization and grades must be considered as estimates only. In addition, the quantity
of reserves and resources may vary depending on metal prices, operating costs, and design parameters. Any material change in quantity
of reserves, resources, grade or stripping ratio may affect the economic viability of the Company’s properties. In addition,
there can be no assurance that precious or other metal recoveries in small-scale laboratory tests will be duplicated in larger
scale tests under on-site conditions or during production.


 


Development of Reward Project


 


In January 2011, the Company commenced Phase 1 infrastructure
development work on the Reward Project. The majority of this construction, which included construction of wildlife exclusion fencing,
drilling and completing the production water well, and extending power lines from local grid power sources to the mine site, has
been completed. Final development of the Reward Project including the construction of leach pad facilities, purchase or lease of
a semi-portable crushing plant, the installation of offices, lab and shop facilities and pre-stripping of mine waste will commence
once development of Pinson has been completed or when adequate financing becomes available. Some of the proceeds of this offering
will be used to fund development of the Reward Project, however additional financing will be required, inclusive of the use of
cash generated by the Briggs Mine and the Pinson-underground Project.


 


Development of Pinson Project


 


In December 2011, the Company entered into an agreement with
a contract miner to initiate development of the Pinson underground mine commencing in January 2012. The Company intends to initiate
gold production in 2012 and to complete the initial development of the Pinson-underground Project, achieving commercial production,
in the first half of 2013. It is anticipated this development will be funded from proceeds of this Offering, cash and Briggs’
cash flow.


 


Credit Risks Associated with Sales of Pinson Ores


 


Pinson plans to sell oxide ore to a third-party-processor. Presently
Pinson is dependent on one customer to buy its oxide ore. Pinson’s first, oxide-ore sale occurred in second quarter 2012
when a bulk sample was processed by and sold to a third party. The receivable of $0.6 million was relatively immaterial in financial
terms. Pinson’s sulfide ore will be processed separately, and the Company expects to sell the resultant gold product to a
processor under agreed upon contractual terms.


 


To the extent Pinson sells ore and generates a trade receivable,
a credit risk will arise. If a receivable is considered to be uncollectible, an allowance will be recognized.


 


Competition and Agreements with Other Parties


 


The mining industry is intensely competitive at all phases,
and the Company competes with many companies possessing greater financial and technical resources than those of the Company. Competition
in the mining business could adversely affect the Company’s ability to acquire suitable producing properties or prospects
for mineral exploration in the future.


 


The Company may, in the future, be unable to meet its share
of costs incurred under agreements to which it is a party and the Company may have its interest in the properties subject to such
agreements reduced as a result. Furthermore, if other parties to such agreements do not meet their share of such costs, the Company
may be unable to finance the cost required to complete recommended programs.


 




    	48



    	 



    

 


Conflict of Interest


 


Certain directors and officers of the Company are officers and/or
directors of, or are associated with, other natural resource companies that acquire interests in mineral properties. Such associations
may give rise to conflicts of interest from time to time. The directors are required by law, however, to act honestly and in good
faith with a view to the best interests of the Company and its shareholders and to disclose any personal interest which they may
have in any material transactions which are proposed to be entered into with the Company and to abstain from voting as a director
for the approval of any such transaction.


 


Title to Assets


 


Although the Company has or will receive title opinions for
any properties in which it has a material interest in Canada and the U.S., there is no guarantee that title to such properties
will not be challenged or impugned. The Company has not conducted surveys of all of the claims in which its holds direct or indirect
interests and therefore, the precise area and location of such claims may be in doubt. The majority of the Company’s properties
are located in the U.S. where mineral title is held through either patented or unpatented mining claims, fee mineral rights, and
as leased mineral interests. Members of the U.S. Congress have repeatedly introduced bills which would supplant or alter the provisions
of the Mining Law of 1872. If enacted, such legislation could change the cost of holding unpatented mining claims and could impact
our ability to develop mineral resources on unpatented mining claims. Such bills have proposed, among other things, to either eliminate
or greatly limit the right to a mineral patent and to


impose a federal royalty on production from unpatented mining
claims. Although it is impossible to predict at this point what any legislated royalties might be, enactment could adversely affect
the potential for development of such mining claims and the economics of existing operating mines on federal unpatented mining
claims. Passage of such legislation could adversely affect the Company’s financial performance.


 


Dividends


 


The Company has not, since the date of its incorporation, declared
or paid any dividends on its Common Shares and does not currently intend to pay dividends. For the foreseeable future, earnings,
if any, are expected to be retained to finance further growth and development of the business of the Company.


 


Resale of Shares


 


The continued operation of the Company will be dependent upon
its ability to generate operating revenues and to procure additional financing. There can be no assurance that any such revenues
can be generated or that other financing can be obtained. If the Company is unable to generate such revenues or obtain such additional
financing, any investment in the Company may be lost. In such event, the probability of resale of the shares purchased would be
diminished.


 


Potential Litigation


 


From time to time, during the ordinary course of business, the
Company and its subsidiaries and affiliates may be threatened with, or may be named as a defendant in various actions, disputes,
and legal proceedings, including claims of breach of contract, lost profits or other consequential damage claims. A significant
judgment against the Company or any of its subsidiaries or affiliates or a failure to settle any dispute on terms satisfactory
to the Company could have a material adverse effect on the Company’s ability to continue operations.


 




    	49



    	 



    

 


Joint Ventures


 


Certain of the properties in which the Company has an interest
are operated through joint ventures with other mining companies. The existence or occurrence of one or more of the following circumstances
and events could have a material adverse impact on the viability of the Company’s interests held through joint ventures and
on the Company’s future cash flows, earnings, results of operations and financial condition: (i) disagreements with joint
venture partners on how to develop and operate mines efficiently; (ii) inability of joint venture partners to meet their obligations
to the joint venture or third parties; (iii) litigation between joint venture partners regarding joint venture matters; (iv) the
sale of a joint venture partner’s interest to a third party; and (v) limited legal rights to influence the direction of project
development where the Company is not the operator of the project.


 


Ongoing Financing and the Development of the Reward Project


 


The business of mineral exploration and extraction involves
a high degree of risk with very few properties that are explored ultimately achieving commercial production. As a mining company
in the exploration, development and mining stage, the future ability of the Company to conduct exploration, development and mining
operations will be affected principally by its ability to raise adequate amounts of capital through equity financings, debt financings,
joint venturing of projects and other means. In turn, the Company’s ability to obtain funding depends in part upon the market’s
perception of its management and properties, but to a great degree upon the price of gold and marketability of securities of speculative
exploration, development, and mining companies. The development of any ore deposits found on the Company’s exploration properties
depends upon the Company’s ability to obtain financing through any or all of equity financing, debt financing, the joint
venturing of projects, or other means. There is no assurance that the Company will be successful in obtaining the required financing.


 


In its quarterly report dated June 30, 2012, the Company announced
that it was deferring development of the Reward Project in favor of funding the Pinson Project, and the Company expects to recommence
development as funding permits. Proceeds from the Offering will be utilized to complete a final construction engineering design
at the Reward Project and to complete various drilling requirements on the property prior to final construction. The Company plans
to utilise cash flow from both the Briggs Mine, and the Pinson Project, once positive cash flow is developed, as well as other
financing, to construct the Reward Project.


 


Hedging Risks related to Precious Metal Production and
Key Operating Inputs


 


On December 9, 2009, the Company closed a private placement
of $14.5 million of Gold Bonds (the “2009 Gold Bonds”). The 2009 Gold Bonds will mature on December 31, 2013.
The 2009 Gold Bonds are redeemed in quarterly installments each equivalent to the market value of 814 ounces of gold per quarter
based on a closing gold price ten trading days prior to the end of each quarter. The Gold Bonds amortized based on a gold price
of $1,113 per ounce creating an implied hedge where the Company is exposed to a negative financial impact at gold market prices
above this level. This bond commitment is equivalent to the purchase of a flat forward hedge representing approximately 8% of expected
gold production in 2012. The Company may also enter into consumable off-take agreements that may protect against the increasing
cost of consumables like diesel fuel. The Company’s goal is to protect the Company’s cash flows from declining gold
prices or increasing diesel prices. The Company’s primary risk related to gold hedging may result from a shortfall of expected
gold production. If gold production levels fall short of its hedge obligations when the hedge contract has a negative fair value,
it may compound the potential reduction in cash flows. The Company’s primary risk mitigation for hedge transactions is its
policy to limit net hedge levels to 50% of its expected gold production or diesel usage. Although a hedging program is designed
to protect cash flow from a decline in the price of gold or rise in the price of diesel fuel, it could also limit the Company’s
gold realizations during periods of increased gold prices or could increase diesel costs during periods of low diesel prices.


 


Exploration and Development


 


Mineral exploration and development involves a high degree of
risk and few properties explored ultimately are developed into producing mines. There is no assurance that the Company’s
mineral exploration and development activities will result in any discovery or development of bodies of commercial ore. The long-term
profitability of the Company’s operations will be in part directly related to the cost and success of its exploration programs,
which may be affected by a number of factors.


 




    	50



    	 



    

 


Substantial expenditures are required to establish reserves
through drilling, to develop metallurgical processes to extract metal from ore and to develop the mining and processing facilities
and infrastructure at any site chosen for mining. Although substantial benefits may be derived from the discovery of a major mineralized
deposit, no assurance can be given that minerals will be discovered in sufficient quantities to justify commercial operations or
that the funds required for development can be obtained on a timely basis.


 


The marketability of any minerals acquired or discovered may
be affected by numerous factors which are beyond the Company’s control and which cannot be accurately predicted, such as
market fluctuations, the proximity and capacity of milling facilities, mineral markets and processing equipment, and other factors
such as government regulations, including regulations relating to royalties, allowable production, importing and exporting minerals
and environmental protection.


 


California Legislation and Regulations May Cause the Development
of Projects Adjacent To Briggs to Become Uneconomic.


 


On April 10, 2003, the California State Mining and Geology Board
enacted a Backfill Regulation (the “Backfill Regulation”) that requires that all future metal mines, with certain
exceptions, be backfilled to the approximate original contour of the landscape subject to certain limitations. Any new open pit
developments on our properties outside the existing Briggs plan of operations area may be required to comply with the Backfill
Regulation. However, certain California statutes and regulations recognize that under certain circumstances existing permit areas
may be extended to incorporate mining locations necessary for the continued operation or expansion of the existing operation without
the backfilling requirement.


 


The Company Has Significant Obligations At Its Mines,
Which May Adversely Impact Liquidity


 


The Company operates in the US. As such, the Company’s
business is subject to regulation by numerous county, state and federal regulatory agencies that include, but are not limited to,
Mine Safety and Health Administration (“MSHA”), US Department of Occupational Safety and Health (“OSHA”)
Department of the Interior, Bureau of Land Management (“BLM”), US Forest Service (“USFS”)
US Department of Alcohol Tobacco and Firearms (“BATF”), US Department of Homeland Security, US Environmental
Protection Agency (“EPA”), US Corp of Engineers, California Department of Occupational Safety and Health (“CAL-OSHA”),
Great Basin Unified Air Pollution Control District, California Regional Water Quality Control Board, California Department of Fish
and Game, California Environmental Protection Agency (“CEPA”), Nevada Division of Environmental Protection (“NDEP”),
Inyo County California, Nye County Nevada, and Humboldt County Nevada.


 


The Company has posted cash and reclamation bonds with these
agencies as of June 30, 2012 in the amount of $8.6 million of which $6.2 million are reclamation bonds supported by a surety. All
reclamation bonds are subject to annual review and adjustment. During 2010, the Company posted an additional $0.9 million of reclamation
bonds with the State of Nevada for Reward which is supported by a surety; in 2011 posted $0.6 million of reclamation bonds with
the State of Nevada for the Pinson Project; and through June 30, 2012 posted $0.2 million of reclamation bonds with the State of
Montana for the Kendall Mine closure. An additional bond will be required for Pinson as it commences production, and an additional
bond will be required for Reward when final construction commences.


 


Montana Regulatory Authorities May Impose Additional Reclamation
Requirements On Our Closure Of The Kendall Mining Property


 


The Company’s wholly-owned subsidiary, CR Kendall Corporation
(“CRK”), is reclaiming and closing the Kendall mining property (“Kendall”) located near Lewistown,
Montana. Since mine closure in 1996, approximately $14.0 million has been expended on closure and reclamation activities at Kendall.


 




    	51



    	 



    

 


In April 2012, CRK entered into an agreement with the Montana
Department of Environmental Quality (“MDEQ”), whereby the Company will provide financial support to complete
the final environmental impact closure study (“EIS”). As part of this agreement, CRK submitted on July 25, 2012
an application to the MDEQ providing a final closure and reclamation plan for the Kendall mine site. MDEQ shall perform a completeness
review of this plan supported by an EIS. A third party contractor will be retained to conduct the EIS and the project will be managed
by the MDEQ in consultation with CRK. Any costs in excess of the EIS project budget will be shared equally between CRK and the
MDEQ.


 


In 2001, CRK deposited with the MDEQ approximately $1.9 million
in a fund to accomplish required reclamation work. This fund was never utilized and with accumulated interest now totals approximately
$2.3 million. Once a final Record of Decision on the final closure plan has been issued by the MDEQ, as part of the agreement with
CRK, CRK will create a trust fund to provide for any future operation, maintenance and replacement of water treatment and closure
facilities. Funds remaining in the current funds on deposit with the MDEQ will be utilized in funding this trust.


 


Foreign Exchange Risk


 


A credit facility of C$20 million is presently denominated in
Canadian dollars. Changes in the CAD/USD exchange rate will proportionately affect the reported value of this liability. Otherwise,
the Company’s assets, liabilities, revenues and costs are primarily denominated in USD, and not significantly impacted by
foreign exchange risks. If the CAD to USD exchange rate increases or decreases by ten percent, the reported value of the C$20 million
credit facility would increase or decrease by approximately $2.0 million, respectively.


 


One of the market conditions that may affect the price of gold
is the extent to which gold is viewed as a safe-haven or hedge against fluctuations in major currencies such as the US dollar and
Euro. Foreign exchange may therefore have a significant indirect impact upon the Company.


 


The Company was not a Passive Foreign Investment Company,
or PFIC, for the year ending December 31, 2011, although we may have been in prior years which could result in adverse U.S. Tax
Consequences to U.S. Investors.


 


Shareholders who are U.S. taxpayers should be aware that the
Company is not a passive foreign investment company (“PFIC”) for the current fiscal year, although it may have
been a PFIC in prior years and could also be a PFIC in subsequent years. If the Company is a PFIC for any year during a U.S. taxpayer’s
holding period, then such U.S. taxpayer generally will be required to treat any so-called “excess distribution” received
on its Common Shares, or any gain realized upon a disposition of Common Shares, as ordinary income and to pay an interest charge
on a portion of such distribution or gain, unless the taxpayer makes a timely and effective qualified electing fund (“QEF”)
election or a mark-to-market election with respect to the shares of the Company. In certain circumstances, the sum of the tax and
the interest charge may exceed the amount of the excess distribution received, or the amount of proceeds of disposition realized,
by the taxpayer. A U.S. taxpayer who makes a QEF election generally must report on a current basis its share of the Company’s
net capital gain and ordinary earnings for any year in which we are a PFIC, whether or not we distribute any amounts to our shareholders.
A U.S. taxpayer who makes the mark-to-market election, generally, must include as ordinary income in each year, the excess of the
fair market value of the common shares over the taxpayer’s tax basis therein. Refer to additional details under “E.
Taxation – U.S. Federal Income Tax Consequences” for more information.


 


OTHER MATERIAL
FACTS


 


There are no other material facts relating to the securities
being qualified for distribution hereunder which have not been disclosed elsewhere in this Prospectus.


 




    	52



    	 



    

 


auditor,
transfer AGENT and registrar


 


The auditors of the Company are Ehrhardt Keefe Steiner Hottman
PC, Certified Public Accountants, at their principal office in Denver, Colorado, who advise that they are independent within the
Rules of Professional Conduct of the Institute of Chartered Accountants of British Columbia and within the meaning of applicable
securities laws of Canada.


 


The registrar and transfer agent for the Common Shares is Computershare
Investor Services Inc. at its principal office in Vancouver, British Columbia.


 


experts


 


Opinions


 


The matters referred to under “Eligibility For Investment”
and certain other matters relating to the Shares offered under this Prospectus will be passed upon at the Closing Date by Bull,
Housser & Tupper LLP, on behalf of the Company, and Borden Ladner Gervais LLP, on behalf
of the Underwriters. As at the date hereof, the partners and associates of Bull, Housser & Tupper LLP,
as a group, and the partners and associates of Borden Ladner Gervais LLP, as a group, beneficially owned, directly or indirectly,
less than 1% of the outstanding Common Shares.


 


Interest of Experts


 


Certain disclosure with respect to the Reward Project, contained
in this Prospectus or in documents incorporated by reference herein is derived from the technical report titled “NI 43-101
Technical Report, Reward Gold Project, Nye County, Nevada” dated June 29, 2012 with an effective date of December 31, 2011
and prepared by Fred Barnard, Ph.D, AIPG-CM, Greg Chlumsky, MMSA, Michael J. Read, SME-RM, Matthew P. Reilly, P.E. and Robert L.
Sandefur, P.E. of Chlumsky, Armbrust & Meyer LLC. Each of the foregoing persons is an independent qualified person in accordance
with NI 43-101. None of Chlumsky, Armbrust & Meyer LLC and its designated professionals, received or will receive any registered
or beneficial interest, directly or indirectly, in any securities or other property of the Company. As at the date hereof, the
aforementioned persons beneficially owned, directly or indirectly, less than 1% of the outstanding Common Shares.


 


Certain disclosure with respect to the Pinson Project, contained
in this Prospectus or in documents incorporated by reference herein is derived from the technical report titled “NI 43-101
Technical Report, Pinson Project, Humboldt County, Nevada” dated May 30, 2012 with an effective date of May 18, 2012 and
prepared by William J. Crowl, R.G., MMSA SME-RM, and Donald E. Hulse, P.E. of Gustavson Associates, LLC. Each of the foregoing
persons is an independent qualified person in accordance with NI 43-101. None of Gustavson Associates, LLC and its designated professionals,
received or will receive any registered or beneficial interest, directly or indirectly, in any securities or other property of
the Company as a result of this report. As at the date hereof, the aforementioned persons beneficially owned, directly or indirectly,
less than 1% of the outstanding Common Shares.


 


Certain disclosure with respect to the Briggs Mine contained
in this Prospectus or in documents incorporated by reference herein is derived from the technical report titled “2012 NI
43-101 Technical Report on the Briggs Mine, Inyo County, California” dated May 29, 2012 with an effective date of March 26,
2012 and prepared by Alan C. Noble, P.E. of Ore Reserves Engineering, Michael J. Read, SME-RM of Chlumsky, Armbrust & Meyer
LLC, William R. Stanley, SME-RM, V.P. Exploration of the Company, and Douglas E. Stewart, P.E., V.P. and COO of the Company. Messrs.
Noble and Read are independent qualified persons in accordance with NI 43-101 and Messrs. Stanley and Stewart are non-independent
qualified persons in accordance with NI 43-101. None of Ore Reserves Engineering and Chlumsky, Armbrust Meyer LLC and its designated
professionals, received or will receive any registered or beneficial interest, directly or indirectly, in any securities or other
property of the Company. As at the date hereof, the aforementioned persons beneficially owned, directly or indirectly, less than
1% of the outstanding Common Shares.


 




    	53



    	 



    

 


Certain disclosure with respect to the Cecil R Property, contained
in this Prospectus or in documents incorporated by reference herein is derived from the technical report titled “NI 43-101
Technical Report Mineral Resource Estimate Cecil R Gold Deposit, Inyo County, California USA” dated March 2, 2010 and prepared
by Fred Barnard, Ph.D and Robert L. Sandefur of Chlumsky, Armbrust & Meyer LLC. Each of the foregoing persons is an independent
qualified person in accordance with NI 43-101. None of Chlumsky, Armbrust Meyer LLC and its designated professionals, received
or will receive any registered or beneficial interest, directly or indirectly, in any securities or other property of the Company.
As at the date hereof, the aforementioned persons beneficially owned, directly or indirectly, less than 1% of the outstanding Common
Shares.


 


Certain disclosure with respect to the Columbia Project, contained
in this Prospectus or in documents incorporated by reference herein is derived from the technical report titled “NI 43-101
Technical Report and Preliminary Assessment on the Columbia Project, Lewis and Clark County, Montana” dated June 2, 2010
and prepared by William J. Crowl R.G., MMSA SME-RM, Donald Hulse P.E., and Richard Moritz, MMSA of Gustavson Associates, LLC. Each
of the foregoing persons is an independent qualified person in accordance with NI 43-101. None of Gustavson Associates, LLC and
its designated professionals, received or will receive any registered or beneficial interest, directly or indirectly, in any securities
or other property of the Company. As at the date hereof, the aforementioned persons beneficially owned, directly or indirectly,
less than 1% of the outstanding Common Shares.


 


statutory
rights OF WITHDRAWAL AND RESCISSION


 


Securities legislation in certain of the provinces of Canada
provides purchasers with the right to withdraw from an agreement to purchase securities. This right may be exercised within two
business days after receipt or deemed receipt of a prospectus and any amendment. In several of the provinces, the securities legislation
further provides a purchaser with remedies for rescission or, in some provinces, revisions of the price or damages if the prospectus
and any amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies for rescission,
revision of the price or damages are exercised by the purchaser within the time limit prescribed by the securities legislation
of the purchaser's province. The purchaser should refer to any applicable provisions of the securities legislation of the purchaser’s
province for the particulars of these rights or consult with a legal adviser.


 




    	54



    	 



    

 


CONSENT
OF AUDITORS


 


The Board of Directors of Atna Resources Ltd.


 


 


We have read the short form prospectus (the “Prospectus”)
of Atna Resources Ltd. (“the Company”) dated September 4, 2012 relating to the qualification for distribution
of 15,000,000 Common Shares of the Company. We have complied with Canadian generally accepted standards for an auditor's involvement
with offering documents.


 


We consent to the incorporation by reference in the above-mentioned
Prospectus of our report to the shareholders of the Company on the consolidated balance sheets of the Company as at December 31,
2011 and 2010 and the consolidated statements of operations, comprehensive loss and deficit and cash flows for each of the years
in the two-year period ended December 31, 2011. Our report is dated March 23, 2012.


 


(signed) Ehrhardt Keefe Steiner Hottman PC


Certified Public Accountants


Denver, Colorado, United States of America


September 4, 2012


 




    	A-1



    	 



    

 


CERTIFICATE
OF THE COMPANY


 


 


DATED:September 4, 2012


 


This short form prospectus, together with the documents incorporated
by reference, constitutes full, true and plain disclosure of all material facts relating to the securities offered by this short
form prospectus as required by the securities legislation of British Columbia, Alberta, Ontario and Nova Scotia.


 


	(Signed) James Hesketh	(Signed) Rodney D. Gloss
	Chief Executive Officer	Chief Financial Officer


 


On Behalf of the Board of Directors


 


	(Signed) David Watkins	(Signed) Paul Zink
	Director	Director


 




    	A-2



    	 



    

 


certificate
of the UNDERWRITERS 


 


DATED:          September 4, 2012


 


To the best of our knowledge, information and belief, this short
form prospectus, together with the documents incorporated by reference, constitutes full, true and plain disclosure of all material
facts relating to the securities offered by this short form prospectus as required by the securities legislation of British Columbia,
Alberta, Ontario and Nova Scotia.


 


Canaccord Genuity Corp.


 


By: (Signed) Ali Pejman


 


NCP Northland Capital Partners Inc.


 


By: (Signed) Sam Pigott


 




    	A-3