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| TABLE OF CONTENTS                                 |                                            |                              |   |
|---------------------------------------------------|-------------------------------------------------|-----------------------------------|--------|
|                                              |                                            |                              |   |   |
| FINANCIAL STATEMENTS                              |                                            | NOTES TO THE FINANCIAL STATEMENTS |
| 1         | CONSOLIDATED INCOME STATEMENTS                  |                              | 6      | 1. DESCRIPTION OF BUSINESS AND NATURE OF OPERATIONS |
| 2                                                 | CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME |                              | 6      | 2. SIGNIFICANT ACCOUNTING POLICIES |
| 3                                                 | CONSOLIDATED STATEMENTS OF FINANCIAL POSITION   |                              | 13     | 3. CRITICAL JUDGEMENTS AND ESTIMATION UNCERTAINTIES |
| 4                                                 | CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY    |                              | 16     | 4. FUTURE CHANGES IN ACCOUNTING POLICIES |
| 5                                                 | CONSOLIDATED STATEMENTS OF CASH FLOWS           |                              | 17     | 5. ASSET ACQUISITIONS |
|                                              |                                            |                              | 18     | 6. EXPENSES |
|                                              |                                            |                              | 20     | 7. TRADE AND OTHER RECEIVABLES |
|                                              |                                            |                              | 21     | 8. TRADE AND OTHER PAYABLES |
|                                              |                                            |                              | 21     | 9. INVENTORIES |
|                                              |                                            |                              | 22     | 10. MINING INTERESTS |
|                                              |                                            |                              | 23     | 11. LONG-TERM DEBT |
|                                              |                                            |                              | 25     | 12. DERIVATIVE INSTRUMENTS |
|                                              |                                            |                              | 27     | 13. SHARE CAPITAL |
|                                              |                                            |                              | 31     | 14. INCOME AND MINING TAXES |
|                                              |                                            |                              | 33     | 15. RECLAMATION AND CLOSURE COST OBLIGATIONS |
|                                              |                                            |                              | 34     | 16. SUPPLEMENTAL CASH FLOW INFORMATION |
|                                              |                                            |                              | 34     | 17. SEGMENTED INFORMATION |
|                                              |                                            |                              | 36     | 18. CAPITAL RISK MANAGEMENT |
|                                              |                                            |                              | 37     | 19. FINANCIAL RISK MANAGEMENT |
|                                              |                                            |                              | 40     | 20. FAIR VALUE MEASUREMENT |
|                                              |                                            |                              | 43     | 21. PROVISIONS |
|                                              |                                            |                              | 43     | 22. OPERATING LEASES |
|                                              |                                            |                              | 44     | 23. COMPENSATION OF DIRECTORS AND KEY MANAGEMENT PERSONNEL |
|                                              |                                            |                              | 44     | 24. COMMITMENTS AND CONTINGENCIES |
|                                              |                                            |                              | 45     | 25. SUBSEQUENT EVENT |
|                                              |                                            |                              | 45     | 26. COMPARATIVE FIGURES |

----

| CONSOLIDATED INCOME STATEMENTS                                              |   |                                                                                          |                                                                                          |
|-----------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------|
|                                                                        |   |                                                                                          | Years ended December 31                                                                       |
|                                                                        |   | $                                                                                             | $                                                                                             |
| (In millions of U.S. dollars, except per share amounts)                     | Note   |             2012                  |             2011                  |
|                                                                        |   |                                                                                          |                                                                                          |
|                                                                        |   |                                                                                          |                                                                                          |
| Revenues                                                                    |   |            791.3                       |            695.9                       |
| Operating expenses                                                          | 6      |            344.3                       |            303.8                       |
| Depreciation and depletion                                                  |   |            116.4                       |              76.9            |
| Earnings from mine operations                                               |   |            330.6                       |            315.2                       |
|                                                                        |   |                                                                                          |                                                                                          |
| Corporate administration                                                    |   |              25.2            |              26.1            |
| Share-based payment expenses                                                | 13     |              10.9            |              11.3            |
| Exploration and business development                                        |   |              20.6            |              10.0            |
| Income from operations                                                      |   |            273.9                       |            267.8                       |
|                                                                        |   |                                                                                          |                                                                                          |
|           Finance income       | 6      |                1.4 |                3.6 |
|           Finance costs        | 6      |            (16.4)                      |              (5.1)           |
|           Other gains (losses) | 6      |              19.9            |              (7.9)           |
|                                                                        |   |                                                                                          |                                                                                          |
| Earnings before taxes                                                       |   |            278.8                       |            258.4                       |
| Income tax expense                                                          | 14     |            (79.8)                      |            (79.4)                      |
|                                                                        |   |                                                                                          |                                                                                          |
| Net earnings                                                                |   |            199.0                       |            179.0                       |
|                                                                        |   |                                                                                          |                                                                                          |
| Earnings per share                                                          |   |                                                                                          |                                                                                          |
|            Basic          | 13     |              0.43            |              0.42            |
|            Diluted        | 13     |              0.42            |              0.40            |
|                                                                        |   |                                                                                          |                                                                                          |
| Weighted average number of shares outstanding (in millions)                 |   |                                                                                          |                                                                                          |
|            Basic          | 13     |            463.4                       |            429.6                       |
|            Diluted        | 13     |            468.4                       |            441.0                       |

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| CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME                                          |   |                                                                                |                                                                                |
|------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------|
|                                                                                     |   |                                                                                | Years ended December 31                                                             |
|                                                                                     |   | $                                                                                   | $                                                                                   |
| (In millions of U.S. dollars)                                                            | Note   |             2012        |             2011        |
|                                                                                     |   |                                                                                |                                                                                |
| Net earnings                                                                             |   |            199.0             |            179.0             |
|                                                                                     |   |                                                                                |                                                                                |
| Other comprehensive (loss) income                                                        |   |                                                                                |                                                                                |
|      Unrealized losses on mark-to-market of gold contracts           | 12     |            (23.8)            |            (32.1)            |
|      Realized losses on settlement of gold contracts                 | 12     |              47.9  |              41.7  |
|      Unrealized losses on available-for-sale securities (net of tax) |   |              (0.8) |              (1.9) |
|      Foreign currency translation adjustment                         |   |              22.5  |            (38.4)            |
| Deferred Income tax related to gold contracts                                            | 12     |              (9.9) |              (3.8) |
| Total other comprehensive income (loss)                                                  |   |              35.9  |            (34.5)            |
| Total comprehensive income                                                               |   |            234.9             |            144.5             |

----

| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION                      |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |
|--------------------------------------------------------------------|--------|-----------------------|--------|------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------|
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   | As at December 31 |
|                                                               |   |                  |   |                                                                                           |                                                                                                                | $                                                                                                                   |   | $ |
| (In millions of U.S. dollars)                                      |   |                  |   | Note                                                                                           |                                                                                                                |               2012                            |   |             2011 |
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Assets                                                             |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Current assets                                                     |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
|      Cash and cash equivalents                 |   |                  |   |                                                                                           |                                                                                                                |              687.8                                 |   |            309.4 |
|      Trade and other receivables               |   |                  |   | 7                                                                                              |                                                                                                                |                46.9                      |   |              37.6 |
|      Inventories                          |   |                  |   | 9                                                                                              |                                                                                                                |              163.3                                 |   |            106.5 |
|      Current income tax receivable             |   |                  |   |                                                                                           |                                                                                                                |                  6.6           |   |                 - |
|      Prepaid expenses and other                |   |                  |   |                                                                                           |                                                                                                                |                12.9                      |   |                7.9 |
| Total current assets                                               |   |                  |   |                                                                                           |                                                                                                                |              917.5                                 |   |            461.4 |
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Investments                                                        |   |                  |   |                                                                                           |                                                                                                                |                  1.0           |   |                1.8 |
| Non-current inventories                                            |   |                  |   | 9                                                                                              |                                                                                                                |                32.4                      |   |              20.3 |
| Mining interests                                                   |   |                  |   | 10                                                                                             |                                                                                                                |           3,134.9                                                 |   |         2,695.3 |
| Deferred tax assets                                                |   |                  |   | 14                                                                                             |                                                                                                                |              194.1                                 |   |            156.2 |
| Non-current non-hedged derivative asset                            |   |                  | 12     |                                                                                           |                    - |                                                                                                                |              18.8 |
| Reclamation deposits and other                                     |   |                  |   |                                                                                           |                  3.8           |                                                                                                                |              14.9 |
| Total assets                                                       |   |                  |   |                                                                                           |                                                                                                                |           4,283.7                                                 |   |         3,368.7 |
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Liabilities and equity                                             |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Current liabilities                                                |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
|      Trade and other payables                  |   |                  |   | 8                                                                                              |                                                                                                                |              120.7                                 |   |            100.3 |
|      Current tax liabilities                   |   |                  |   |                                                                                           |                                                                                                                |                    - |   |              20.5 |
|      Current derivative liabilities            |   |                  |   | 12                                                                                             |                                                                                                                |                56.4                      |   |              49.2 |
|      Current non-hedged derivative liabilities |   |                  | 12     |                                                                                           |                    - |                                                                                                                |              53.3 |
| Total current liabilities                                          |   |                  |   |                                                                                           |                                                                                                                |              177.1                                 |   |            223.3 |
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Reclamation and closure cost obligations                           |   |                  | 15     |                                                                                           |                68.5                      |                                                                                                                |              50.7 |
| Provisions                                                         |   |                  |   | 21                                                                                             |                                                                                                                |                  9.5           |   |              12.6 |
| Non-current derivative liabilities                                 |   |                  | 12     |                                                                                           |                54.1                      |                                                                                                                |              92.4 |
| Non-current non-hedged derivative liabilities                      |   | 12                    |   |                80.3 |                                                                                                                |            114.3                                             |
| Long-term debt                                                     |   |                  |   | 11                                                                                             |                                                                                                                |              847.8                                 |   |            251.7 |
| Deferred tax liabilities                                           |   |                  |   | 14                                                                                             |                                                                                                                |              322.9                                 |   |            294.3 |
| Deferred benefit                                                   |   |                  |   | 11                                                                                             |                                                                                                                |                46.3                      |   |              46.3 |
| Other                                                              |   |                  |   |                                                                                           |                                                                                                                |                  0.7           |   |                0.7 |
| Total liabilities                                                  |   |                  |   |                                                                                           |                                                                                                                |           1,607.2                                                 |   |         1,086.3 |
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Equity                                                             |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Common shares                                                      |   |                  |   | 13                                                                                             |                                                                                                                |           2,618.4                                                 |   |         2,464.0 |
| Contributed surplus                                                |   |                  |   |                                                                                           |                                                                                                                |                85.2                      |   |              80.4 |
| Other reserves                                                     |   |                  |   |                                                                                           |                                                                                                                |               (50.5)                          |   |            (86.4) |
| Retained earnings (deficit)                                        |   |                  |   |                                                                                           |                                                                                                                |                23.4                      |   |          (175.6) |
| Total equity                                                       |   |                  |   |                                                                                           |                                                                                                                |           2,676.5                                                 |   |         2,282.4 |
| Total liabilities and equity                                       |   |                  |   |                                                                                           |                                                                                                                |           4,283.7                                                 |   |         3,368.7 |
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Approved and authorized by the Board on February 28, 2013          |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
|                                                               |   |                  |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| "Robert Gallagher"                                                 |   | "James Estey"         |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |
| Robert Gallagher, Director                                         |   | James Estey, Director |   |                                                                                           |                                                                                                                |                                                                                                                |   |   |

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| CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY                                        |   |   |                                                                                              |                                                                                              |
|-------------------------------------------------------------------------------------|--------|--------|---------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
|                                                                                |   |   |                                                                                              | Years ended December 31                                                                           |
|                                                                                |   |   | $                                                                                                 | $                                                                                                 |
| (In millions of U.S. dollars)                                                       |   | Note   |             2012                      |             2011                      |
|                                                                                |   |   |                                                                                              |                                                                                              |
| Common shares                                                                       |   |   |                                                                                              |                                                                                              |
| Balance, beginning of year                                                          |   |   |         2,464.0                                           |         1,845.9                                           |
|      Shares issued for acquisition of Richfield                 |   | 5, 13  |                 - |            487.9                           |
|      Shares issued for acquisition of Silver Quest              |   | 5, 13  |                 - |            105.8                           |
|      Shares issued for exercise of options                      |   | 13     |              11.6                |              24.3                |
|      Shares issued for exercise of warrants                     |   | 13     |              75.5                |                0.1     |
|      Shares issued for the conversion of convertible debentures |   | 13     |              67.3                |                 - |
| Balance, end of year                                                                |   |   |         2,618.4                                           |         2,464.0                                           |
|                                                                                |   |   |                                                                                              |                                                                                              |
| Contributed surplus                                                                 |   |   |                                                                                              |                                                                                              |
| Balance, beginning of year                                                          |   |   |              80.4                |              81.2                |
|      Exercise of options                                        |   |   |              (3.7)               |              (8.0)               |
|      Equity settled share-based payments                        |   |   |                8.5     |                7.2     |
| Balance, end of year                                                                |   |   |              85.2                |              80.4                |
|                                                                                |   |   |                                                                                              |                                                                                              |
| Other reserves                                                                      |   |   |                                                                                              |                                                                                              |
| Balance, beginning of year                                                          |   |   |            (86.4)                          |            (51.9)                          |
|      Foreign currency translation adjustment                    |   |   |              22.5                |            (38.4)                          |
|      Change in fair value of available-for-sale investments     |   |   |              (0.8)               |              (1.9)               |
|      Change in fair value of hedging instruments (net of tax)   |   |   |              14.2                |                5.8     |
| Balance, end of year                                                                |   |   |            (50.5)                          |            (86.4)                          |
|                                                                                |   |   |                                                                                              |                                                                                              |
| Retained earnings (deficit)                                                         |   |   |                                                                                              |                                                                                              |
| Balance, beginning of year                                                          |   |   |          (175.6)                                     |          (354.6)                                     |
|      Net earnings                                               |   |   |            199.0                           |            179.0                           |
| Balance, end of year                                                                |   |   |              23.4                |          (175.6)                                     |
|                                                                                |   |   |                                                                                              |                                                                                              |
| Total equity                                                                        |   |   |         2,676.5                                           |         2,282.4                                           |

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| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                                                   |   |                                                                                              |                                                                                              |                                                                                              |
|-------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------|
|                                                                                                                    |   |                                                                                              |                                                                                              | Years ended December 31                                                                           |
|                                                                                                                    |   |                                                                                              | $                                                                                                 | $                                                                                                 |
| (In millions of U.S. dollars)                                                                                           |   | Note                                                                                              |             2012                      |             2011                      |
|                                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
| Operating activities                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
|      Net earnings                                                                                   |   |                                                                                              |            199.0                           |            179.0                           |
|      Adjustments for:                                                                               |   |                                                                                              |                                                                                              |                                                                                              |
|           Realized gains on gold contracts                                 |   |                                                                                              |              (9.9)               |              (8.8)               |
|           Realized and unrealized foreign exchange losses (gains)          |   | 6                                                                                                 |                1.3     |              (7.1)               |
|           Realized and unrealized gains on investments                     |   | 6                                                                                                 |                 - |              (1.3)               |
|           Realized and unrealized (gains) losses on non-hedged derivatives | 6      |            (61.1)                          |                7.2     |
|           Unrealized losses on concentrate contracts                       |   |                                                                                              |                2.4     |                 - |
|           Reclamation and closure costs paid                               |   | 15                                                                                                |              (8.0)               |                 - |
|           Loss on redemption of Senior Secured Notes                       |   | 6                                                                                                 |              31.8                |                 - |
|           Loss on disposal of assets                                       |   | 6                                                                                                 |                3.3     |                0.5     |
|           Depreciation and depletion                                       |   |                                                                                              |            116.2                           |              76.2                |
|           Equity-settled share-based payment expense                       |   | 13                                                                                                |                8.5     |                7.2     |
|           Unrealized losses on cash flow hedging items                     |   | 6                                                                                                 |                2.9     |                6.6     |
|           Income tax expense                                               |   |                                                                                              |              79.8                |              79.4                |
|           Finance income                                                   |   |                                                                                              |              (1.4)               |              (3.6)               |
|           Finance costs                                                    |   |                                                                                              |              16.4                |                5.1     |
|                                                                                                                    |   |                                                                                              |            381.2                           |            340.4                           |
|      Change in non-cash operating working capital                                                   |   | 16                                                                                                |            (44.8)                          |            (12.5)                          |
| Cash generated from operations                                                                                          |   |                                                                                              |            336.4                           |            327.9                           |
|      Income taxes paid                                                                              |   |                                                                                              |          (100.6)                                     |            (98.4)                          |
| Net cash generated from operations                                                                                      |   |                                                                                              |            235.8                           |            229.5                           |
|                                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
| Investing activities                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
|      Mining interests                                                                               |   |                                                                                              |          (516.0)                                     |          (413.6)                                     |
|      Proceeds received from sale of pre-commercial production inventory                             |   |              14.5                |                 - |
|      Purchase of additional Blackwater mining claims                                                |   |                                                                                              |              (6.0)               |                 - |
|      Receipt of reclamation deposits                                                                |   |                                                                                              |                8.9     |                8.4     |
|      Cash acquired in asset acquisition, net transaction costs - Richfield                          |   |                 - |              18.7      |
|      Asset acquisition costs, net of cash received - Silver Quest                                   |   |                                                                                              |                 - |              (8.0)               |
|      Asset acquisition costs, net of cash received - Geo Minerals                                   |   |                 - |            (18.1)                          |
|      Purchase of available-for-sale securities                                                      |   |                                                                                              |                 - |              (3.7)               |
|      Proceeds from sale of investments                                                              |   |                                                                                              |                 - |                8.9     |
|      Interest received                                                                         |   |                                                                                              |                1.1     |                3.2     |
|      Proceeds from disposal of assets                                                          |   |                                                                                              |                 - |                0.8     |
| Cash used in investing activities                                                                                       |   |                                                                                              |          (497.5)                                     |          (403.4)                                     |
|                                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
| Financing activities                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
|      Issuance of common shares on exercise of options and warrants                                  | 13     |              75.4                |              16.5                |
|      Redemption of Senior Secured Notes                                                             |   |                                                                                              |          (197.6)                                     |                 - |
|      Proceeds from issuance of Senior Unsecured Notes                                               |   |                                                                                              |            800.0                           |                 - |
|      Financing initiation costs                                                                     |   |                                                                                              |            (17.9)                          |                 - |
|      Interest paid                                                                                  |   |                                                                                              |            (20.0)                          |            (21.9)                          |
| Cash generated by (used by) financing activities                                                                        |   |                                                                                              |            639.9                           |              (5.4)               |
|                                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
| Effect of exchange rate changes on cash and cash equivalents                                                            |   |                0.2     |              (2.1)               |
|                                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
| Increase (decrease) in cash and cash equivalents                                                                        |   |                                                                                              |            378.4                           |          (181.4)                                     |
| Cash and cash equivalents, beginning of the year                                                                        |   |                                                                                              |            309.4                           |            490.8                           |
| Cash and cash equivalents, end of the year                                                                              |   |                                                                                              |            687.8                           |            309.4                           |
|                                                                                                                    |   |                                                                                              |                                                                                              |                                                                                              |
| Cash and cash equivalents are comprised of:                                                                             |   |                                                                                              |                                                                                              |                                                                                              |
|      Cash                                                                                           |   |                                                                                              |            277.5                           |            179.0                           |
|      Short-term money market instruments                                                            |   |                                                                                              |            410.3                           |            130.4                           |
|                                                                                                                    |   |                                                                                              |            687.8                           |            309.4                           |

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|   Name of subsidiary/associate |   Principal activity |   Method of accounting | Country of incorporationand operation | InterestDecember 312012 | InterestDecember 312011 |
|------------------------------------------|--------------------------------|----------------------------------|---------------------------------------|-------------------------|-------------------------|
| Metallica Resources Inc.                 | Holding company                | Consolidated                     | Canada                                | 100%                    | 100%                    |
| Minera Metallica Resources Chile Ltd.    | Mining                         | Consolidated                     | Chile                                 | 100%                    | 100%                    |
| Minera San Xavier S.A. de C.V.           | Mining                         | Consolidated                     | Mexico                                | 100%                    | 100%                    |
| Peak Gold Mines Pty Ltd                  | Mining                         | Consolidated                     | Australia                             | 100%                    | 100%                    |
| Inversiones El Morro Limitada            | Holding company                | Consolidated                     | Chile                                 | 100%                    | 100%                    |
| Sociedad Contractual Minera El Morro     | Mining                         | Equity                           | Chile                                 | 30%                     | 30%                     |
| Western Goldfields (USA) Inc.            | Holding company                | Consolidated                     | USA                                   | 100%                    | 100%                    |

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|                | Estimated useful life |
|---------------------|-----------------------|
| Building            | 15 – 50         |
| Plant and machinery | 3 – 20          |
| Office equipment    | 5 – 10          |
| Vehicles            | 5 – 7           |
| Computer equipment  | 3 - 5                 |

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| • | Richfield Ventures Corp.; |
|---------|---------------------------|

| • | Geo Minerals Ltd.; and |
|---------|------------------------|

| • | Silver Quest Resources Ltd. |
|---------|-----------------------------|

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|   Warrant Series |  Number of warrants |  Commonshares issuable |   Exercise price |   Expiry date |
|----------------------------|-------------------------------|-----------------------------|----------------------------|-------------------------|
|                       | (000s)                        | (000s)                      | C$                         |                    |
| New Gold Series A          | 27,850                        | 27,850                      | 15.00                      | June 28, 2017           |
| Silver Quest Warrants - B  | 122                           | 122                         | 10.22                      | January 19, 2013        |
| Silver Quest Warrants - C  | 148                           | 148                         | 11.56                      | January 20, 2013        |
| Silver Quest Warrants - D  | 126                           | 126                         | 11.56                      | January 29, 2013        |
|                       | 28,246                        | 28,246                      |                       |                    |

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| ·   | Canadian income tax losses of $9.0 million expire between 2014 to 2032; |
|--------------------|-------------------------------------------------------------------------|

| ·   | Canadian capital loss carry forwards of $6.6 million with no expiry date; |
|--------------------|---------------------------------------------------------------------------|

| ·   | United States loss carry forwards of $4.9 million expire between 2021 to 2028; and |
|--------------------|------------------------------------------------------------------------------------|

| ·   | Other loss carry forwards of $0.6 million with varying expiry dates. |
|--------------------|----------------------------------------------------------------------|

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| ·   | the strength of the U.S. economy and the economies of other industrialized and developing nations; |
|--------------------|----------------------------------------------------------------------------------------------------|

| ·   | global or regional political or economic crises; |
|--------------------|--------------------------------------------------|

| ·   | the relative strength of the U.S. dollar and other currencies; |
|--------------------|----------------------------------------------------------------|

| ·   | expectations with respect to the rate of inflation; |
|--------------------|-----------------------------------------------------|

| ·   | interest rates; |
|--------------------|-----------------|

| ·   | purchases and sales of gold by central banks and other holders; |
|--------------------|-----------------------------------------------------------------|

| ·   | demand for jewelry containing gold; and |
|--------------------|-----------------------------------------|

| ·   | investment activity, including speculation, in gold as a commodity. |
|--------------------|---------------------------------------------------------------------|

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