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| CORPORATE STRUCTURE                                                               | 4      |
|-----------------------------------------------------------------------------------|--------|
|                                                                              |   |
| GENERAL DEVELOPMENT OF THE BUSINESS                                               | 5      |
|                                                                              |   |
|     Developments - Projects and Mines                         | 5      |
|                                                                              |   |
|     Developments - Financial                                  | 6      |
|                                                                              |   |
|     Developments - Acquisitions and Dispositions              | 6      |
|                                                                              |   |
|     Developments - Corporate Governance                       | 7      |
|                                                                              |   |
| DESCRIPTION OF THE BUSINESS                                                       | 8      |
|                                                                              |   |
|     Specialized Skills and Knowledge                          | 8      |
|                                                                              |   |
|     Principal Products                                        | 8      |
|                                                                              |   |
|     Competitive Conditions                                    | 8      |
|                                                                              |   |
|     Operations                                                | 8      |
|                                                                              |   |
|     Technical Information                                     | 10     |
|                                                                              |   |
|     Summary of Mineral Reserve and Mineral Resource Estimates | 10     |
|                                                                              |   |
| MINERAL PROPERTIES                                                                | 15     |
|                                                                              |   |
|     NEW AFTON MINE, CANADA                                    | 15     |
|                                                                              |   |
|     CERRO SAN PEDRO MINE, MEXICO                              | 19     |
|                                                                              |   |
|     MESQUITE MINE, UNITED STATES                              | 23     |
|                                                                              |   |
|     PEAK GOLD MINES, AUSTRALIA                                | 27     |
|                                                                              |   |
|     BLACKWATER PROJECT, CANADA                                | 31     |
|                                                                              |   |
|     EL MORRO PROJECT, CHILE                                   | 36     |
|                                                                              |   |
| RISK FACTORS                                                                      | 42     |
|                                                                              |   |
| NOTES                                                                             | 52     |
|                                                                              |   |
| DIVIDENDS                                                                         | 53     |
|                                                                              |   |
| DESCRIPTION OF CAPITAL STRUCTURE                                                  | 53     |
|                                                                              |   |
| MARKET FOR SECURITIES                                                             | 55     |
|                                                                              |   |
| DIRECTORS AND OFFICERS                                                            | 57     |
|                                                                              |   |
| LEGAL PROCEEDINGS AND REGULATORY ACTIONS                                          | 63     |
|                                                                              |   |
| INTEREST OF MANAGEMENT & OTHERS IN MATERIAL TRANSACTIONS                      | 63     |
|                                                                              |   |
| TRANSFER AGENT AND REGISTRAR                                                      | 64     |
|                                                                              |   |
| MATERIAL CONTRACTS                                                                | 64     |
|                                                                              |   |
| INTERESTS OF EXPERTS                                                              | 65     |
|                                                                              |   |
| SCHEDULE “A” AUDIT COMMITTEE CHARTER                                  | A-1    |

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| SCHEDULE “B” DEFINITIONS                                         | B-1    |
|------------------------------------------------------------------------------|--------|
|                                                                         |   |
| SCHEDULE “C” ABBREVIATIONS AND MEASUREMENT CONVERSION            | C-1    |
|                                                                         |   |
| SCHEDULE “D” CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION | D-1    |

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| ·     | 100% interest in the New Afton copper-gold mine British Columbia, Canada (“New Afton Mine”) |
|---------------------------|---------------------------------------------------------------------------------------------------------|

| ·     | 100% interest in the Mesquite gold mine in California, United States (“Mesquite Mine”) |
|---------------------------|----------------------------------------------------------------------------------------------------|

| ·     | 100% interest in the Cerro San Pedro gold-silver mine in San Luis Potosi, Mexico (“Cerro San Pedro Mine”) |
|---------------------------|-----------------------------------------------------------------------------------------------------------------------|

| ·     | 100% interest in the Peak gold-copper mines in New South Wales, Australia (“Peak Gold Mines”) |
|---------------------------|-----------------------------------------------------------------------------------------------------------|

| ·     | 100% interest in the Blackwater gold project in British Columbia, Canada (“Blackwater Project”) |
|---------------------------|-------------------------------------------------------------------------------------------------------------|

| ·     | 30% interest in the El Morro copper-gold project in the Atacama Region, Chile ( “El Morro Project”) |
|---------------------------|-----------------------------------------------------------------------------------------------------------------|

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|  Location             | Full-Time | Contractors |
|----------------------------|-----------|-------------|
| Vancouver Office           | 22        | 2           |
| Toronto Office             | 22        | 4           |
| Corporate Exploration Team | 11        | -           |
| Mesquite Mine              | 274       | 5           |
| Cerro San Pedro Mine*      | 489       | 39          |
| Peak Gold Mines            | 320       | 19          |
| New Afton Mine             | 469       | 29          |
| Blackwater Project         | 114       | 30          |
| El Morro Project           | -         | -           |
|                       | 1,721     | 128         |

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|                           | Contained Metals |
|--------------------------------|------------------|
|                           | GoldKoz          | SilverKoz | CopperMlbs |
| Mineral Reserves               |             |   |   |
| Proven                         | 2,744            | 12,110 | 1,185 |
| Probable                       | 5,008            | 19,146 | 2,097 |
| Total Proven & Probable    | 7,752            | 31,256 | 3,282 |
|                           |             |   |   |
| Mineral Resources              |             |   |   |
| Measured                       | 6,789            | 37,470 | 2,076 |
| Indicated                      | 14,613           |   94,377 | 1,986 |
| Total Measured & Indicated | 21,403           | 131,847 | 4,061 |
| Inferred                       | 4,383            | 84,620 | 1,114 |

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|                            | Metal Grade       | Contained Metal |
|---------------------------------|-------------------|-----------------|
|                            | Tonnes000’s | Goldg/t         | Silverg/t | Copper% | GoldKoz | SilverKoz | CopperMlbs |
| Mesquite Mine                   |              |            |   |   |   |   |   |
| Proven                          | 13,14 0           | 0.68            | - | - | 287 | - | - |
| Probable                        | 114,40 9          |  0.56      | - | - | 2,055 | - | - |
| Mesquite Proven & Probable  | 127,54 9          | 0.57            | - | - | 2,342 | - | - |
| Cerro San Pedro Mine            |              |            |   |   |   |   |   |
| Proven                          | 21,10 0           | 0.52            | 17.1 | - | 353 | 11,600 | - |
| Probable                        | 26,40 0           | 0.48            | 17.4 | - | 407 | 14,800 | - |
| CSP Proven & Probable       | 47,50 0           | 0.50            | 17.3 | - | 760 | 26,400 | - |
| Peak Gold Mines                 |              |            |   |   |   |   |   |
| Proven                          | 2,10 9            | 5.89            | 7.5 | 1.08 | 399 | 510 | 50 |
| Probable                        | 2,11 8            | 3.82            | 6.8 | 1.18 | 260 | 466 |  55 |
| Peak Proven & Probable      | 4,22 7            | 3.82            | 6.84 | 1.13 | 659 | 976 | 105 |
| New Afton Mine                  |              |            |   |   |   |   |   |
| Proven                          | -                 | -               | - | - | - | - | - |
| Probable                        | 52,50 0           | 0.65            | 2.3 | 0.93 | 1,100 | 3,880 | 1,080 |
| New Afton Proven & Probable | 52,50 0           | 0.65            | 2.3 | 0.93 | 1,100 | 3,880 | 1,080 |
| El Morro Project                | 100% Basis        | 30% Basis       |
| Proven                          | 307,94  9    | 0.57            | - | 0.56 | 1,705 | - | 1,135 |
| Probable                        | 335,15  2    | 0.37            | - | 0.44 | 1,186 | - |     962 |
| El Morro Proven & Probable  | 643,10  1    | 0.47            | - | 0.49 | 2,891 | - | 2,097 |

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|                                                   |               | Metal Grade | Contained Metal |
|--------------------------------------------------------|--------------------|-------------|-----------------|
|                                                   | Tonnes             | Gold        | Silver          | Copper | Gold | Silver | Copper |
|                                                   | 000’s        | g/t         | g/t             | % | Koz | Koz | Mlbs |
| Mesquite Mine                                          |               |        |            |   |   |   |   |
| Measured - oxide                                       | 19,100             | 0.51        | -               | - | 313 | - | - |
| Indicated - oxide                                      | 274,100            | 0.38        | -               | - | 3,349 | - | - |
| Mesquite Measured & Indicated - oxide              | 293,200            | 0.39        | -               | - | 3,662 | - | - |
|                                                   |               |        |            |   |   |   |   |
| Measured – non-oxide                             | 4,900              | 0.88        | -               | - | 139 | - | - |
| Indicated – non-oxide                            |   96,000 | 0.61        | -               | - | 1,883 | - | - |
| Mesquite Measured & Indicated – non-oxide    | 100,900            | 0.62        | -               | - | 2,022 | - | - |
| Mesquite Measured & Indicated                      | 394,100            | 0.45        | -               | - | 5,684 | - | - |
| Cerro San Pedro Mine                                   |               |        |            |   |   |   |   |
| Measured – open pit oxide                        | 27,100             | 0.34        | 15              | - | 303 | 13,100 | - |
| Indicated – open pit oxide                       | 49,000             | 0.24        | 13              | - | 380 | 20,480 | - |
| CSP Measured & Indicated – open pit oxide    | 76,100             | 0.28        | 13.7            | - | 683 | 33,580 | - |
|                                                   |               |        |            |   |   |   |   |
| Measured – open pit sulphide                     | 15,200             | 0.47        | 11.9            | - | 229 | 5,800 | - |
| Indicated – open pit sulphide                    | 60,400             | 0.41        | 9.6             | - |     791 | 18,600 | - |
| CSP Measured & Indicated – open pit sulphide | 75,600             | 0.42        | 10.1            | - | 1,020 | 24,400 | - |
| CSP Measured & Indicated                           | 151,700            | 0.35        | 11.9            |   | 1,703 | 57,980 |   |
| Peak Gold Mines                                        |               |        |            |   |   |   |   |
| Measured                                               | 2,700              | 5.74        | 7.5             | 1.05 | 494 | 650 | 62 |
| Indicated                                              | 3,200              | 3.75        | 6.8             | 1.19 | 386 |    700 |    84 |
| Peak Measured & Indicated                          | 5,900              | 4.66        | 7.1             | 1.13 | 880 | 1,350 | 146 |
| New Afton Mine                                         |               |        |            |   |   |   |   |
| A&B Zones                                          |               |        |            |   |   |   |   |
| Measured                                               | 33,500             | 0.86        | 2.9             | 1.18 | 929 | 3,160 | 873 |
| Indicated                                              | 45,900             | 0.67        | 2.4             | 0.89 |    984 | 3,530 |    896 |
| A&B Zone Measured & Indicated                  | 79,400             | 0.75        | 2.6             | 1.01 | 1,913 | 6,690 | 1,769 |
| C-Zone                                                 |               |        |            |   |   |   |   |
| Measured                                               | 400                | 0.6         | 1.3             | 0.73 | 8 | 20 | 6 |
| Indicated                                              | 2,900              | 0.63        | 1.3             | 0.68 | 58 | 120 | 43 |
| C-Zone M&I                                         | 3,300              | 0.62        | 1.3             | 0.68 | 66 | 140 | 49 |
| New Afton Measured & Indicated                     | 82,700             | 0.74        | 2.6             | 1 | 1,979 | 6,830 | 1,818 |
| Blackwater Project                                     |               |        |            |   |   |   |   |
| Measured                                               | 88,188             | 0.94        | 5.2             | - | 2,670 | 14,740 | - |
| Indicated                                              | 207,958            | 0.81        | 6.2             | - | 5,400 | 41,450 | - |
| Blackwater Measured & Indicated                    | 296,146            | 0.85        | 5.9             | - | 8,070 | 56,190 | - |
| Capoose Property                                       |               |        |            |   |   |   |   |
| Indicated                                              | 14,200             | 0.43        | 20.8            | - | 196 | 9,497 | - |
| El Morro Project                                       |               | 100% basis  | 30% basis       |
| Measured  - open pit                         | 307,949            | 0.57        | -               | 0.56 | 1,705 | - | 1,135 |
| Indicated – open pit                             | 335,152            | 0.37        | -               | 0.44 | 1,186 | - |     962 |
| El Morro Measured & Indicated – open pit     | 643,101            | 0.47        | -               | 0.49 | 2,891 | - | 2,097 |

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|                                                                                                              | Metal grade              | Contained metal |
|-------------------------------------------------------------------------------------------------------------------|--------------------------|-----------------|
|                                                                                                              | Tonnes000’s        | Goldg/t         | Silverg/t | Copper% | GoldKoz | SilverKoz | CopperMlbs |
| Mesquite Mine                                                                                                     |                     |            |   |   |   |   |   |
| Oxides                                                                                                            | 35,200                   | 0.33            | - | - | 373 | - | - |
| Non oxide                                                                                                         | 15,700                   | 0.55            | - | - | 278 | - | - |
| Mesquite Inferred                                                                                                 | 50,900                   | 0.40            | - | - | 651 | - | - |
| Cerro San Pedro Mine                                                                                              |                     |            |   |   |   |   |   |
| Oxides                                                                                                            | 53,400                   | 0.17            | 9.0 | - | 300 | 15,400 | - |
| Sulphides                                                                                                         |    50,500 | 0.34            | 8.5 | - | 550 | 13,800 | - |
| CSP Inferred                                                                                                      | 103,900                  | 0.25            | 8.8 | - | 850 | 29,200 | - |
| Peak Gold Mines                                                                                                   | 1,700                    | 2.64            | 4.8 | 1.13 | 144 | 261 | 42 |
| New Afton Mine                                                                                                    |                     |            |   |   |   |   |   |
| A&B - Zone                                                                                                    | 14,900                   | 0.45            | 2.0 | 0.65 | 216 | 940 | 212 |
| C-Zone                                                                                                            | 13,600                   | 0.70            | 1.5 | 0.76 | 307 |    670 | 228 |
| New Afton Inferred                                                                                                | 28,400                   | 0.57            | 1.8 | 0.70 | 523 | 1,610 | 440 |
| Blackwater Project                                                                                                | 16,585                   | 0.58            | 10.8 | - | 310 | 5,760 | - |
| Capoose  Property                                                                                       | 64,070                   | 0.29            | 23.2 | - | 595 | 47,789 | - |
|                                                                                                              | 100% Basis               | 30% Basis       |
| El Morro Project                                                                                                  | 137,555                  | 0.99            | - | 0.70 | 1,310 | - | 632 |
| Notes to the Inferred Mineral Resource estimates are provided on pages 13 and 14 of this Annual Information Form. |

| 1.   | Mineral Reserves for the Company’s mineral properties have been calculated based on the following metal prices and lower cut-off criteria: |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

|                 | GoldUS$/oz | SilverUS$/oz | CopperUS$/lb | Lower cutoff                                                                        |
|----------------------|------------|--------------|--------------|-------------------------------------------------------------------------------------|
| Mesquite Mine        | $1,300     | -            | -            | 0.21 g/t  Au – Oxide Reserves0.41 g/t Au – Non-oxide Reserves |
| Cerro San Pedro Mine | $1,300     | $24.00       | -            | US$4.33/t NSR                                                                       |
| Peak Gold Mines      | $1,300     | $24.00       | $3.00        | A$120 - 253/t NSR                                                                   |
| New Afton Mine       | $1,300     | $24.00       | $3.00        | US$24/t NSR                                                                         |
| El Morro Project     | $1,350     | -            | $3.00        | 0.20% CuEq                                                                          |

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| 2.   | Mineral Resources for the Company’s mineral properties have been calculated based on the following metal prices and lower cut-off criteria: |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|                 | GoldUS$/oz | SilverUS$/oz | CopperUS$/lb | Lower cut-off                                                                                             |
|----------------------|------------|--------------|--------------|-----------------------------------------------------------------------------------------------------------|
| Mesquite Mine        | $1,400     | -            | -            | 0.12 g/t Au – Oxide Resources0.24 g/t Au – Non-oxide Resources                                |
| Cerro San Pedro Mine | $1,400     | $28.00       | -            | 0.10 g/t AuEq – Open pit oxide Resources0.40 g/t AuEq – Open pit sulphide Resources           |
| Peak Gold Mines      | $1,400     | $28.00       | $3.25        | A$97 - 137/t marginal NSR                                                                                 |
| New Afton Mine       | $1,400     | $28.00       | $3.25        | 0.40% CuEq                                                                                                |
| El Morro Project     | $1,500     | -            | $3.50        | 0.15% CuEq – Meas’d & Ind’cd o/p Resources0.20% CuEq – Inferred u/g Resources |
| Blackwater Project   | $1,400     | -            | -            | 0.40 g/t AuEq                                                                                             |
| Capoose Property     | $1,400     | -            | -            | 0.40 g/t AuEq                                                                                             |

| 3.   | Mineral Resources are classified as Measured, Indicated and Inferred Resources and are reported based on technical and economic parameters consistent with the methods most suitable for their potential commercial exploitation. Where different mining and/or processing methods might be applied to different portions of a Mineral Resource, the designators ‘open pit’ and ‘underground’ have been applied to indicate envisioned mining method. Likewise the designators ‘oxide’, ‘non-oxide’ and ‘sulphide’ have been applied to indicate the type of  mineralization as it relates to appropriate mineral processing method and expected payable metal recoveries. The estimates of Mineral Reserves and Mineral Resources may be mutually affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing and other relevant issues. Additional details regarding Mineral Reserve and Resource estimates, classification and reporting parameters for each of New Gold’s mineral properties are provided in the respective NI 43-101 Technical Reports which are available on SEDAR. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.   | Qualified Person: New Gold’s Mineral Reserve and Resource statements have been reviewed and approved by Mark Petersen, a Qualified Person under NI 43-101 and employee of New Gold. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·     | Mineral Resources and Reserves in the Cholla Big Chief, Rainbow, Vista and North Big Chief deposits; |
|---------------------------|------------------------------------------------------------------------------------------------------|

| ·     | the physical plant site including heap leach pads, process plant, workshops, warehouses, administration buildings, and dry facilities; |
|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------|

| ·     | facilities providing basic infrastructure to the mine, including electric power, heat, water treatment and supply, and sewage treatment; |
|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | mine infrastructure including open pits, ramps, maintenance shops, and mobile equipment fleet. |
|---------------------------|------------------------------------------------------------------------------------------------|

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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 large holders, including speculators; |
|---------------------------|----------------------------------------------------------------------------------------------|

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

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

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| ·     | government regulations including, but not limited to, restrictions on production, price controls, export controls, currency remittance, income taxes, expropriation of property, foreign investment, maintenance of claims, environmental legislation, land use, land claims of local people, water use and mine safety; and |
|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | the lack of certainty with respect to foreign legal systems, which may not be immune from the influence of political pressure, corruption or other factors that are inconsistent with the rule of law. |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·     | the particular attributes of the deposit (including its size, grade, geological formation and proximity to infrastructure); |
|---------------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·     | metal prices, which are highly cyclical; |
|---------------------------|------------------------------------------|

| ·     | government regulations (including regulations relating to taxes, royalties, land tenure, land use and permitting); and |
|---------------------------|------------------------------------------------------------------------------------------------------------------------|

| ·     | environmental protection considerations. |
|---------------------------|------------------------------------------|

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| ·     | transaction exposure: our operations sell commodities and incur costs in different currencies. This creates exposure at the operational level, which may affect its profitability as exchange rates fluctuate; |
|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | exposure to currency risk: we are exposed to currency risk through a portion of the following assets and liabilities denominated in currencies other than the U.S. dollar: cash and cash equivalents, investments, trade and other receivables, reclamation deposits, trade and other payables, reclamation and closure cost obligations and long-term debt; and |
|---------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | translation exposure: our functional and reporting currency is U.S. dollars. On July 31, 2012, following the declaration of commercial production at the New Afton Mine, we changed the functional currency of the New Afton Mine and Blackwater Project from Canadian dollars to U.S. dollars (although many of our operating expenses at the New Afton Mine and Blackwater Project continue to be incurred in Canadian dollars).  Certain of our operations have assets and liabilities denominated in currencies other than the U.S. dollar, with translation foreign exchange gains and losses included from these balances in the determination of profit or loss.  Therefore, exchange rate movements in the Mexican peso, Australian dollar, Canadian dollar and Chilean peso can have a significant impact on the Company’s consolidated operating results. |
|---------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| ·     | disagreement with a counterparty about how to develop, operate or finance a project; |
|---------------------------|--------------------------------------------------------------------------------------|

| ·     | that a counterparty may at any time have economic or business interests or goals that are, or become, inconsistent with the Company’s business interests or goals; |
|---------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | that a counterparty may not comply with the agreement; |
|---------------------------|--------------------------------------------------------|

| ·     | the possibility that a counterparty might become bankrupt; |
|---------------------------|------------------------------------------------------------|

| ·     | that a counterparty may be in a position to take action contrary to the Company’s instructions, requests, policies, objectives or interests; |
|---------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | possible litigation with a counterparty about joint venture matters; |
|---------------------------|----------------------------------------------------------------------|

| ·     | the Company’s inability to exert control over decisions relating to a joint venture in which it does not hold a controlling interest, such as the El Morro Project; and |
|---------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·     | the possibility that the Company may not be able to sell its interest in a joint venture if it wants to exit the joint venture. |
|---------------------------|---------------------------------------------------------------------------------------------------------------------------------|

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| ·     | Standard & Poor’s Ratings Services:  BB- (Recovery Rating: 3) |
|---------------------------|-----------------------------------------------------------------------------------|

| ·     | Moody’s Investors Service:  B2 (LGD4) |
|---------------------------|-------------------------------------------------------|

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| 2012      | High (C$)                                                        | Low (C$)                                                         | Volume                                   |
|-----------|------------------------------------------------------------------|------------------------------------------------------------------|------------------------------------------|
| January   |         12.12            |           9.95 |      28,863,016 |
| February  |         12.41            |         10.99            |      27,767,494 |
| March     |         11.78            |           9.01 |      62,152,540 |
| April     |         10.22            |           8.82 |      24,648,277 |
| May       |           9.48 |           7.20 |      31,427,806 |
| June      |         10.70            |           9.29 |      34,268,658 |
| July      |         10.58            |           9.19 |      19,267,429 |
| August    |         11.26            |           9.63 |      27,824,582 |
| September |         12.50            |         10.63            |      42,209,412 |
| October   |         12.38            |         11.13            |      24,783,162 |
| November  |         11.85            |           9.51 |      35,430,777 |
| December  |         11.16            |         10.10            |      20,029,284 |

| 2012     | High (C$)                                                        | Low (C$)                                                         | Volume                                                                                |
|----------|------------------------------------------------------------------|------------------------------------------------------------------|---------------------------------------------------------------------------------------|
| January  |           4.29 |           3.30 |              876,032 |
| February |           4.23 |           3.72 |              714,501 |
| March    |           3.94 |           3.10 |              535,090 |
| April    |           3.54 |           2.97 |              384,586 |
| May      |           3.20 |           2.22 |              999,321 |
| June     |           3.39 |           2.92 |              392,509 |
| July     |           3.34 |           2.75 |              459,107 |
| August   |           3.30 |           2.90 |          1,127,276                       |

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| 2012 | High (C$) | Low (C$) | Volume |
|------|-----------|----------|--------|

| September |           3.85 |           3.02 |          1,170,085                       |
|-----------|------------------------------------------------------------------|------------------------------------------------------------------|---------------------------------------------------------------------------------------|
| October   |           3.70 |           3.14 |              683,306 |
| November  |           3.37 |           2.53 |              967,328 |
| December  |           2.93 |           2.52 |              943,642 |

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| DAVID EMERSONBritish Columbia, CanadaDirector since:July 1, 2012Independent          | David Emerson P.C., OBC is a Corporate Director, Public Policy Advisor and serves as a senior advisor to CAI Managers, a private equity fund. He has served as a minister in the Government of Canada including Minister of Foreign Affairs, Minister of International Trade and Minister of Industry. He has also held a number of senior positions in the public service in British Columbia. In the private sector, he was President and CEO of Canfor Corporation, President and CEO of the Vancouver International Airport Authority and Chairman and CEO of Canadian Western Bank. Mr. Emerson serves on the boards of directors of Finning International Inc., Stantec Inc. and is Chair of Maple Leaf Foods Inc.  In addition, Mr. Emerson is Co-chair, Prime Minister’s Advisory Committee on the Public Service. Mr. Emerson is a recipient of the Order of British Columbia and the Peter Lougheed Award of Excellence in Public Policy.  Mr. Emerson holds bachelors and masters degrees in economics from the University of Alberta and a doctorate in Economics from Queen’s University. Mr. Emerson’s principal occupation is as a corporate director and public policy advisor. |
|-------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| JAMES ESTEYOntario, CanadaDirector since:July 8, 2008Independent                     | James Estey is the retired Chairman of UBS Securities Canada Inc. and has over 30 years of experience in the financial markets. Mr. Estey joined Alfred Bunting and Company as an institutional equity salesperson in 1980 after working at A.E. Ames & Co. for seven years. In 1994, Mr. Estey became the head of the Canadian Equities business, and in 2002 he was appointed President and Chief Executive Officer of UBS Securities Canada. In January 2008, Mr. Estey assumed the role of Chairman.  He serves on the boards of Range Royalty Management Ltd. and Gibson Energy Inc.  He also serves on the boards of The Estey Centre for Law and Economics in International Trade and St. Clements School and is on the Advisory Board of the Edwards School of Business.  Mr. Estey’s principal occupation is as a Corporate Director.                                                                                                                                                                                                                                                                                                                                                     |
|                                                                                      |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| ROBERT GALLAGHERBritish Columbia, CanadaDirector since:June 30, 2008Non-Independent  | Robert Gallagher’s principal occupation is President and Chief Executive Officer of New Gold.  Mr. Gallagher has worked in the mining industry for over 35 years and spent 15 years with Placer Dome Inc. and from August 2000 to December 2007 with Newmont Mining Corporation, most recently as Vice President, Operations, Asia Pacific.  Before the June 2008 business combination of Peak Gold, Metallica and New Gold, Mr. Gallagher was the President and Chief Executive Officer of Peak Gold from February 2008.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |

----

| VAHAN KOLOLIANOntario, CanadaDirector since:June 1, 2009Independent                   | Vahan Kololian is the founder and Managing Partner of TerraNova Partners LP, which invests in the industrial, services and resource sectors. Mr. Kololian started his career in investment banking in 1980 with Burns Fry Limited (now BMO Nesbitt Burns). From 1990 to 2000, he was co-founder and President of Polar Capital Corporation and from 2002 to 2011, he was Chairman of KK Precision Inc., a private engineering and manufacturing company.  Mr. Kololian also serves on the board of Manicouagan Minerals Inc., a public mineral exploration company.  Mr. Kololian holds BA and LL.B. degrees.  Mr. Kololian is also co-founder and Chairman of the Mosaic Institute, whose purpose is to bring together and promote dialogue among Canadians of differing ethnicities whose homelands are in conflict with one another. Mr. Kololian’s principal occupation is Managing Partner of TerraNova Partners LP. |
|--------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| MARTYN KONIGJersey, British IslesDirector since:June 1, 2009Independent               | Martyn Konig has over 30 years of experience in investment banking and the commodity markets as well as extensive experience in the natural resource sector. Mr. Konig’s principal occupation is Chief Investment Officer for T Wealth Management SA, the private family office for partners and senior management of the Trafigura Group.  Mr. Konig was Executive Chairman and President of European Goldfields Limited until its acquisition by Eldorado Gold Corp. in February 2012 and was Chief Executive Officer of the Blackfish Capital Group from 2005 until August 2009. Mr. Konig was a main Board Director of NM Rothschild and Sons Ltd. for 15 years and held senior positions at Goldman Sachs and UBS. Mr. Konig is a Barrister and Fellow of the Chartered Institute of Bankers.                                                                                                                                            |
|                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| PIERRE LASSONDEOntario, CanadaDirector since:June 30, 2008Independent                 | Pierre Lassonde is the Chairman of Franco-Nevada Corporation. He formerly served as President of Newmont Mining Corporation from 2002 to 2006 and resigned as a director and Vice Chairman of Newmont effective as at November 30, 2007. Previously Mr. Lassonde served as a director and President (1982 to 2002) and Co-Chief Executive Officer (1999 to 2002) of Franco-Nevada Corporation.  Mr. Lassonde’s principal occupation is Chairman of Franco-Nevada Corporation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |
|                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| RANDALL OLIPHANTOntario, CanadaDirector since:June 1, 2009Non-Independent             | Randall Oliphant’s principal occupation is Executive Chairman of New Gold.  Mr. Oliphant is on the Advisory Board of Metalmark Capital LLC (formerly Morgan Stanley Capital Partners), and serves on the boards of WesternZagros Resources Ltd. and Franco-Nevada Corporation. Since 2003, Mr. Oliphant has served on the boards of a number of public and private companies and not-for-profit organizations. From 1999 to 2003, he was the President and Chief Executive Officer of Barrick Gold Corporation.  From 2006 to 2009, he was Chairman of Western Goldfields Inc.  Until the spring of 2011 he was also President and Chief Executive Officer of Silver Bear Resources Inc. of which he remains a director. Mr. Oliphant is a Chartered Accountant.                                                                                                                                                |
|                                                                                       |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| RAYMOND THRELKELDNorth Carolina, United StatesDirector since:June 1, 2009Independent  | Raymond Threlkeld has over 32 years of mineral industry experience.  Mr. Threlkeld’s principal occupation is President and Chief Executive Officer of Rainy River Resources Ltd. From 2005 to 2009, Mr. Threlkeld was the Chief Operating Officer of Silver Bear Resources Inc.  From 2006 to 2009, he was the President and Chief Executive Officer of Western Goldfields Inc. From 1996 to 2005 Mr. Threlkeld held various senior management positions in precious metal mine development with Barrick Gold Corporation and Coeur d’Alene Mines Corporation including the development of the Pierina Mine in Peru, the Bulyanhulu Mine in Tanzania and the Veladero Mine in Argentina. Mr. Threlkeld has had exploration acquisition success in the Western United States in addition to his management and project development experience.                                                                                 |

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| BRIAN PENNYOntario, CanadaExecutive Vice President and Chief Financial Officer  | Mr. Penny has over 25 years’ experience in mine finance and accounting. He has been the Executive Vice President and Chief Financial Officer of the Company since June 2009.  He was the Chief Financial Officer of Western Goldfields from 2006 to 2009. From 2005 to spring 2012, Mr. Penny was also the Chief Financial Officer of Silver Bear Resources Inc. From 2004, Mr. Penny was a Director of and chaired the Audit Committee of Equinox Minerals Limited until the acquisition of the company by Barrick in 2012. Mr. Penny was the Chief Financial Officer of Kinross Gold Corporation 1993 – 2004. Mr. Penny is a Certified Management Accountant.  Mr. Penny’s principal occupation is Executive Vice President and Chief Financial Officer of New Gold.                                                                                      |
|--------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| JOHN MARSHALLBritish Columbia, CanadaVice President, Human Resources            | Mr. Marshall has over 23 years’ experience in human resources spanning the energy, semiconductor and banking industries. He was previously the Director of Worldwide Human Resource Operations for PMC-Sierra Inc. where he managed human resources operations for employees in over 10 countries. Prior to PMC-Sierra, Mr. Marshall held various human resources roles at Duke Energy, Westcoast Energy and NatWest Group plc.  Mr. Marshall’s principal occupation is Vice President, Human Resources of New Gold.                                                                                                                                                                                                                                                                                                                                                        |
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| ERNEST MASTBritish Columbia, CanadaVice President Operations                    | Ernie has over 23 years’ experience in mining throughout the Americas. Most recently, Ernie was President and Chief Executive Officer of Minera Panama, a subsidiary of Inmet Mining Corporation, where he headed up Inmet's major development project in Panama. Prior to working with Inmet, Ernie worked with Xstrata and its preceding companies for 20 years in various positions including President and General Manager of the Falcondo operations in the Dominican Republic. Ernie holds Bachelor's and Master's degrees in Metallurgical Engineering and is a registered Professional Engineer.  Mr. Mast’s principle occupation is Vice President, Operations of New Gold.                                                                                                                                                                                        |
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| MARK PETERSENColorado, United StatesVice President, Exploration                 | Mr. Petersen is an economic geologist with over 28 years’ mining industry experience in the Americas. Previously, Mr. Petersen held the position of Vice President of Exploration for Metallica Resources Inc., where he was responsible for leading the exploration and development of the Cerro San Pedro project in Mexico, acting as the company’s technical liaison for the El Morro joint venture project in Chile, developing and managing a portfolio of earlier stage exploration projects in Chile, Brazil, and Alaska, and directing generative exploration work throughout the Americas. Prior to his term with Metallica, Mr. Petersen held positions as an exploration geologist with Lac Minerals Inc. and predecessor companies Bond Gold Inc. and St. Joe Gold Inc.  Mr. Petersen’s principal occupation is Vice President, Exploration of New Gold. |
|                                                                                 |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| HANNES PORTMANNOntario, CanadaVice President, Corporate Development             | Mr. Portmann has been working with mining companies in a financial capacity since his career began. Before joining Western Goldfields in 2008 he was part of the Merrill Lynch Investment Banking Mining Group, where he worked in an advisory role on merger and acquisition mandates as well as equity and debt offerings. Previously, Mr. Portmann held roles in both the assurance and advisory practices of PricewaterhouseCoopers LLP. Mr. Portmann holds a Bachelor of Science in Mining Engineering from Queen’s University, a Masters of Management and Professional Accounting from the Rotman School of Management, University of Toronto and is a Canadian Chartered Accountant.  Mr. Portmann’s principal occupation is Vice President, Corporate Development of New Gold.                                                                                     |

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| SUSAN TOEWSBritish Columbia, CanadaVice President, Legal Affairs and Corporate Secretary | Ms. Toews has over 18 years’ corporate, securities legal experience and was previously Corporate Secretary of Peak Gold Ltd.  She was also previously General Counsel at egX Canada, an emerging marketplace working toward the securitization of real estate assets and Senior Legal Counsel with the British Columbia Securities Commission (BCSC).  She was the BCSC representative on the Canadian Securities Administrators committee that developed the national rule on disclosure of corporate governance, corporate governance guidelines and the national rule on auditor oversight. Ms. Toews holds a Bachelor of Arts (Hons.) from the University of Victoria, and a Bachelor of Laws from the University of Saskatchewan. Ms. Toews principal occupation is Vice President, Legal Affairs and Corporate Secretary of New Gold. |
|------------------------------------------------------------------------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Board Committee                                                           | Committee Members         | Status      |
|---------------------------------------------------------------------------|---------------------------|-------------|
| Audit Committee                                                           | James Estey (Chair)       | Independent |
| David Emerson                                                             | Independent               |
| Martyn Konig                                                              | Independent               |
| Compensation Committee                                                    | Martyn Konig (Chair)      | Independent |
| James Estey                                                               | Independent               |
| Pierre Lassonde                                                           | Independent               |
| Corporate Governance and Nominating Committee                             | David Emerson (Chair)     | Independent |
| Vahan Kololian                                                            | Independent               |
| Pierre Lassonde                                                           | Independent               |
| Health, Safety, Environment and Corporate Social Responsibility Committee | Raymond Threlkeld (Chair) | Independent |
| Vahan Kololian                                                            | Independent               |
| Martyn Konig                                                              | Independent               |

----

|   | James Estey (Chair)                                                 | Independent (1) |  Financially literate (2) |
|--------|--------------------------------------------------------------------------|-----------------|--------------------------------|
|   | David Emerson                    | Independent (1) |  Financially literate (2) |
|   | Martyn Konig           | Independent (1) |  Financially literate (2) |

| (1) | A member of an Audit Committee is independent if the member has no direct or indirect material relationship with the Company which could, in the view of the Board of Directors, reasonably interfere with the exercise of the member’s independent judgment. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | An individual is financially literate if he has the ability to read and understand a set of financial statements that present a breadth of complexity of accounting issues that are generally comparable to the breadth and complexity of the issues that can reasonably be expected to be raised by the Company’s financial statements. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Financial Years Ending December 31 | Audit Fees(1) | Audit Related Fees (2) | Tax Fees (3) | All Other Fees (4) |
|------------------------------------|---------------|------------------------|--------------|--------------------|
| 2012                               | C$1,974,978   | C$210,000              | C$75,456     | nil                |
| 2011                               | C$1,782,600   | C$386,450              | C$118,151    | nil                |

| (1) | The aggregate fees billed for the performance of the audit or review of the Company’s financial statements. |
|-----|-------------------------------------------------------------------------------------------------------------------|

| (2) | The aggregate fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s financial statements which are not included under the heading “Audit Fees”. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | The aggregate fees billed for professional services rendered for tax compliance, tax advice and tax planning. |
|-----|---------------------------------------------------------------------------------------------------------------|

----

| (4) | The aggregate fees billed for services other than as set out under Audit Fees, Audit Related Fees, or Tax Fees. |
|-----|-----------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

| ·   | Acquisition and Funding Agreement dated January 6, 2010 between New Gold Inc., Datawave Sciences Inc., Inversiones El Morro Limitada and Goldcorp Inc. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Credit Agreement dated December 14, 2010, as subsequently amended on March 23, 2012, August 14, 2012, November 8, 2012, February 28, 2013 and March 8, 2013, between Peak Gold Ltd., Metallica Resources Inc. and Western Goldfields Inc. (as Borrowers) and New Gold Inc. (as Guarantor) and Scotia Capital (as Joint Lead Arranger and Joint Book Runner) and The Bank of Nova Scotia (as Administrative Agent) and Commonwealth Bank of Australia (as Joint Lead Arranger, Joint Book Runner and Syndication Agent) and Unicredit Bank AG (as Documentation Agent) and The Bank of Nova Scotia, Commonwealth Bank of Australia, Unicredit Bank AG, Royal Bank of Canada and JPMorgan Chase Bank, N.A. (as Lenders) described under the heading “General Development of the Business - Developments - Financial”. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Purchase Agreement between New Gold Inc. and J.P. Morgan Securities LLC dated April 2, 2012 relating to the 7.00% Senior Notes. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------|

| ·   | Indenture dated as of April 5, 2012 among New Gold Inc., the guarantors named on the signature pages and Computershare Trust Company, N.A., as trustee 7.00% Senior Notes due 2020 |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Purchase Agreement between New Gold Inc. and J.P. Morgan Securities LLC dated November14, 2012 relating to the 6.25% Senior Notes. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Indenture dated as of November 14, 2012 among New Gold Inc., the guarantors named on the signature pages and Computershare Trust Company, N.A., as trustee 6.25% Senior Notes due 2020 |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

| Mineral Property andTitle of Technical Report                                                                                                                         | Qualified Person(s)                                                                                                                                  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------|
| Mesquite MineTechnical Report on the Mesquite Mine, Brawley, California dated February 26, 2010                                                                       | Mr. Wayne W. Valliant, P. Geo., and Principal Geologist for Roscoe Postle Associates, Inc. (formerly Scott Wilson Roscoe Postle Associates, Inc.)    |
| Mr. Holger Krutzelmann, P. Eng. and Principal Metallurgist for Roscoe Postle Associates, Inc. (formerly Scott Wilson Roscoe Postle Associates, Inc.)                  |
| Mr. Richard J. Lambert, P.E., and Principal Mining Engineer of RPA (USA) Ltd (formerly Roscoe Postle Associates, Inc.)                                                |
| Cerro San Pedro MineTechnical Report on the Cerro San Pedro Mine, San Luis Potosí, Mexico dated February 16, 2010 and amended March 22, 2010                     | Mr. Holger Krutzelmann, P. Eng. and Principal Metallurgist for Roscoe Postle Associates, Inc. (formerly Scott Wilson Roscoe Postle Associates, Inc.) |
| Mr. Christopher Moreton, Ph.D. and P. Geo., and Senior Consulting Geologist for Roscoe Postle Associates, Inc. (formerly Scott Wilson Roscoe Postle Associates, Inc.) |
| Mr. Richard J. Lambert, P.E., and Principal Mining Engineer of RPA (USA) Ltd (formerly Roscoe Postle Associates, Inc.)                                                |
| Peak Gold MinesTechnical Report on Peak Gold Mines, New South Wales, Australia, dated March 25, 2013                                                                  | Mr. Richard J. Lambert, P.E., and Principal Mining Engineer of RPA (USA) Ltd                                                                         |
| Mr. Ian T. Blakley, P.Geo. and Principal Geologist and Vice-President and General Manager of RPA UK Ltd                                                               |
| New Afton MineTechnical Report on the New Afton Project, British Columbia, Canada, dated December 31, 2009                                                            | Mr. David Rennie, P. Eng., and Principal Geologist for Roscoe Postle Associates, Inc. (formerly Scott Wilson Roscoe Postle Associates, Inc.)         |
| Mr. R. Dennis Bergen, P. Eng., and Associate Principal Mining Engineer for Roscoe Postle Associates, Inc. (formerly Scott Wilson Roscoe Postle Associates, Inc.)      |
| Mr. Kevin C. Scott, P. Eng, formerly Principal Metallurgist for Roscoe Postle Associates, Inc. (formerly Scott Wilson Roscoe Postle Associates, Inc.)                 |

----

| Mineral Property andTitle of Technical Report                                                                                 | Qualified Person(s)                                                                              |
|-------------------------------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------------|
| Blackwater ProjectTechnical Report on Preliminary Economic Assessment for the Blackwater Project, dated August 28, 2012  | Mr. Ronald G. Simpson, P Geo., and Professional Geoscientist for GeoSim Services Inc.       |
| Mr. Herbert E. Welhener, MMSA – QPM, and Principle Mining Engineer for Independent Mining Consultants Inc.         |
| Mr. Bruno Borntraeger, P. Eng., and Specialist Engineer/Project Manager for Knight Piésold Ltd.                     |
| Mr. Ignacy (Tony) Lipiec, P. Eng, and Professional Manager for AMEC Americas Limited.                                         |
| Mr. Ramon Mendoza Reyes, P Eng., and Principle Mining Engineer for AMEC Americas Limited.                                     |
| El Morro ProjectTechnical Report on the El Morro Project, Region III, Chile, dated March 26, 2012                             | Mr. Richard J. Lambert, P.E., and Principal Mining Consultant for Roscoe Postle Associates, Inc. |
| Mr. Neil N. Gow, P. Geo, and an Associate Consulting Geologist for Roscoe Postle Associates, Inc.                             |
| Mr. A. Paul Hampton, P. Eng. and an Associate Consulting Geologist for Roscoe Postle Associates, Inc.                         |
| Mr. Lee P. Gochnour, MMSA QP, and an Environmental Scientist for Roscoe Postle Associates, Inc.                               |

----

----

| 1. | Purpose and Authority |
|----|-----------------------|

| 2.   | Membership and Composition |
|----------------|----------------------------|

----

| 3.   | Meetings |
|----------------|----------|

| 4.   | Duties and Responsibilities |
|----------------|-----------------------------|

| 4.1 | Financial Reporting and Disclosure |
|-----|------------------------------------|

| a.   | Review and discuss with management and the external auditor at the completion of the annual examination: |
|----------------|----------------------------------------------------------------------------------------------------------|

| i.   | the Company's audited financial statements and related notes; |
|----------------|---------------------------------------------------------------|

| ii.   | the external auditor's audit of the financial statements and their report; |
|-----------------|----------------------------------------------------------------------------|

| iii.   | any significant changes required in the external auditor's audit plan; |
|------------------|------------------------------------------------------------------------|

| iv.   | any serious difficulties or disputes with management encountered during the course of the audit; and |
|-----------------|------------------------------------------------------------------------------------------------------|

| v.   | other matters related to the conduct of the audit, which are to be communicated to the Committee under International Financial Reporting Standards. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Review and discuss with management and the external auditor at the completion of any review engagement or other examination, the Company's quarterly financial statements. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | Review, discuss with management the annual reports, the quarterly reports, the Management Discussion and Analysis ("MD&A"), Annual Information Form, 40-F, prospectus, financial press releases and other disclosures and, if thought advisable, recommend the acceptance of such documents to the Board for approval. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Review and discuss with management any guidance being provided to shareholders on the expected future results and financial performance of the Company and provide their recommendations on such documents to the Board. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| e.   | Inquire of the auditors the quality and acceptability of the Company's accounting principles, including the clarity of financial disclosure and the degree of conservatism or aggressiveness of the accounting policies and estimates. |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   |  Review the Company's compliance with any policies and reports received from regulators. Discuss with management and the independent auditor the effect on the Company's financial statements of significant regulatory initiatives. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| g.   | Meet with the external auditor and management in separate executive sessions, as necessary or appropriate, to discuss any matters that the Committee or any of these groups believe should be discussed privately with the Audit Committee. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| h.   | Ensure that management has the proper and adequate  system and procedures are in place for the review of the Company's financial statements, financial reports and other financial information including all Company disclosure of financial information extracted or derived from the Company’s financial statements, and that they satisfy all legal and regulatory requirements. The Audit Committee shall periodically assess the adequacy of such procedures. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| i.   | Review with the Company's counsel, management and the independent auditors any legal or regulatory matter, including reports or correspondence, which could have a material impact on the Company's financial statements or compliance policies. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| j.   | Based on discussions with the independent auditor concerning the audit, the financial statement review and such other matters as the Committee deems appropriate, recommend to the Board the filing of the audited annual and unaudited quarterly financial statements and MD&A on SEDAR and the inclusion of the audited financial statements in the Annual Report on Form 40-F. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.2 | External Auditor |
|-----|------------------|

| a.   | Be responsible for the recommendation to Board and the shareholders for the appointment of the Company's independent auditor and for the compensation, retention and oversight of the work of the independent auditor employed by the Company. The independent auditor shall report directly to the Committee. The Audit Committee shall be responsible to resolve any disagreements between management and the auditors regarding financial reporting. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Consider, in consultation with the external auditor, the audit scope and plan of the external auditor. |
|----------------|--------------------------------------------------------------------------------------------------------|

| c.   | Approve the external auditor to be nominated, the cost of their services and review the performance of the auditor, including the lead partner of the external auditor. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Confirm with the external auditor and receive written confirmation at least once per year as to the external auditor's internal processes and quality control and disclosure of any investigations or government enquiries, reviews or investigations of the external auditor. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| e.   | Take reasonable steps to confirm at least annually the independence of the external auditor, which shall include: |
|----------------|-------------------------------------------------------------------------------------------------------------------|

| i.   | ensuring receipt from the external auditor of a formal written statement delineating all relationships between the external auditor and the Company, consistent with International Financial Reporting Standards, and determine that they satisfy the requirements of all applicable securities legislation including the U.S. Securities and Exchange Commission Independence Standards Board Standard No. 1, |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ii.   | considering and discussing with the external auditor any disclosed relationships or services, including non-audit services, that may impact the objectivity and independence of the external auditor, and |
|-----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| iii.   | approve in advance any audit or permissible non-audit related services provided by the auditor to the Company with a view to ensuring independence of the auditor, and in accordance with any applicable regulatory requirements, including the requirements of all applicable securities regulations with respect to approval of non-audit related serviced performed by the auditor. |
|------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | Confirm that the lead audit partner for the Company's auditors has not performed audit services for the Company for more than five previous fiscal years, and otherwise ensure the rotation of the lead partner and other partners in accordance with all applicable securities laws. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| g.   | Review and approve the Company's hiring policies regarding partners, employees and former employees of the present and former independent auditors of the Company. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.3 | Internal Controls and Audit |
|-----|-----------------------------|

| a.   | Review and assess the adequacy and effectiveness of the Company's systems of internal and management information systems through discussion with management and the external auditor to ensure that the Company maintains appropriate systems, is able to assess the pertinent risks of the Company and that the risk of a material misstatement in the financial disclosures can be detected. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Assess the requirement for the appointment of an internal auditor for the Company. |
|----------------|------------------------------------------------------------------------------------|

| c.   | Inquire of management and the external auditor about the systems of internal controls that management and the Board of Directors have established and the effectiveness of those systems. In addition, inquire of management and the external auditor about significant financial risks or exposures and the steps management has taken to minimize such risks to the Company. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Review disclosures made to the Committee by the Company's CEO and CFO during their certification process required under applicable Canadian and United States security regulations. Review any significant deficiencies in the design and operation of disclosure controls and procedures and any fraud involving management or other employees who have a significant role in the Company's internal controls. |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 4.4 | General |
|-----|---------|

| a.   | Conduct an ongoing review of any transaction now in effect, and review and approve in advance any proposed transaction, that could be within the scope of "related party transactions" as such term is defined in the applicable securities regulations, and establish appropriate procedures to receive material information about and prior notice of any such transaction. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | Establish procedures for the receipt, retention and treatment of complaints received by the Company regarding accounting, internal accounting controls or auditing matters; and for the confidential, anonymous submission by employees of the Company of concerns regarding questionable accounting or auditing matters. |
|----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | The Committee shall have the power to conduct or authorize investigations into any matter within the scope of this Charter. It may request any officer or employee of the Company, its external legal counsel or external auditor to attend a meeting of the Committee or to meet with any member(s) of the Committee. |
|----------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| d.   | Review the qualifications of the accounting and financial personnel. |
|----------------|----------------------------------------------------------------------|

| e.   | Perform any other activities consistent with this Charter, the Company's Articles and governing law, as the Committee or the Board deems necessary or appropriate. |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| 4.5 | Oversight Function |
|-----|--------------------|

| 5.   | Chair of the Committee |
|----------------|------------------------|

| a.   | provides leadership to the Committee with respect to its functions as described in this Charter and as otherwise may be appropriate, including overseeing the logistics of the operations of the Committee; |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| b.   | chairs meetings of the Committee, unless not present, including in camera sessions, and reports to the Board of Directors following each meeting of the Committee on the findings, activities and any recommendations of the Committee; |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| c.   | ensures that the Committee meets on a regular basis and at least quarterly; |
|----------------|-----------------------------------------------------------------------------|

| d.   | in consultation with the Chair of the Board and the Committee members, establishes a calendar for holding meetings of the Committee; |
|----------------|--------------------------------------------------------------------------------------------------------------------------------------|

| e.   | establishes the agenda for each meeting of the Committee, with input from other Committee members, the Chair of the Board, and any other parties as applicable; |
|----------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

| f.   | acts as liaison and maintains communication with the Chair of the Board and the Board to optimize and co-ordinate input from Board members, and to optimize the effectiveness of the Committee. This includes reporting to the full Board on all proceedings and deliberations of the Committee at the first meeting of the Board after each Committee meeting and at such other times and in such manner as the Committee considers advisable; |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| g.   | reports annually to the Board on the role of the Committee and the effectiveness of the Committee role in contributing to the objectives and responsibilities of the Board as a whole; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| h.   | ensures that the members of the Committee understand and discharge their duties and obligations; |
|----------------|--------------------------------------------------------------------------------------------------|

| i.   | fosters ethical and responsible decision making by the Committee and its individual members; |
|----------------|----------------------------------------------------------------------------------------------|

| j.   | together with the Corporate Governance and Nominating Committee, oversees the structure, composition, membership and activities delegated to the Committee from time to time; |
|----------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| k.   | ensures that resources and expertise are available to the Committee so that it may conduct its work effectively and efficiently and pre-approves work to be done for the Committee by consultants; |
|----------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| l.   | facilitates effective communication between members of the Committee and management; |
|----------------|--------------------------------------------------------------------------------------|

----

| m.   | addresses all concerns communicated to him under the Company’s Whistleblower Policy and Code of Ethics; |
|----------------|---------------------------------------------------------------------------------------------------------------|

| n.   | performs such other duties and responsibilities as may be delegated to the Chair by the Board of Directors from time to time. |
|----------------|-------------------------------------------------------------------------------------------------------------------------------|

----

| Term                   | Definition                                                                                                                                                                                                                                                                                                                                                                                                      |
|------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| atomic absorption (AA) | A spectroanalytical procedure for the quantitative determination of chemical elements employing the absorption of optical radiation (light) by free atoms in the gaseous state.                                                                                                                                                                                                                            |
| alluvial               | Material which has been placed by the action of surface water.                                                                                                                                                                                                                                                                                                                                                  |
| alteration             | Change in the mineralogical composition of a rock, typically brought about by the action of hydrothermal solutions.                                                                                                                                                                                                                                                                                             |
| amphibolite            | A metamorphic rock consisting mainly of a amphibole and some plagioclase.                                                                                                                                                                                                                                                                                                                                       |
| andesite               | An extrusive igneous, volcanic rock of intermediate composition, with aphanitic to porphyritic texture.                                                                                                                                                                                                                                                                                                         |
| arsenopyrite           | The most common arsenic mineral and principal ore of arsenic; occurs in many sulphide ore deposits, particularly those containing lead, silver and gold.                                                                                                                                                                                                                                                        |
| assay                  | Analysis to determine the amount or proportion of the element of interest contained within a sample.                                                                                                                                                                                                                                                                                                            |
| ball mill              | A horizontal rotating steel cylinder which grinds ore to fine particles. The grinding is carried out by the pounding and rolling of a charge of steel balls carried within the cylinder.                                                                                                                                                                                                                   |
| batholith              | A very large igneous intrusion extending deep in the earth's crust.                                                                                                                                                                                                                                                                                                                                             |
| block cave             | Used to mine massive, steeply-dipping ore bodies. An undercut with haulage access is driven under the ore body, with "drawbells" excavated between the top of the haulage level and the bottom of the undercut. The drawbells serve as a place for caving rock to fall into. The ore body is drilled and blasted above the undercut, and the ore is removed via the haulage access.                        |
| block model            | A three-dimensional model that forms the basic framework of a mineral resource estimate.                                                                                                                                                                                                                                                                                                                        |
| bornite                | A brittle reddish-brown crystalline mineral with an iridescent purple tarnish, consisting of a sulphide of copper and iron.                                                                                                                                                                                                                                                                                     |
| breccia                | A coarse-grained clastic rock, composed of angular broken rock fragments held together by a mineral cement or in a fine-grained matrix; it differs from conglomerate in that the fragments have sharp edges and unworn corners.                                                                                                                                                                            |
| bullion                | Gold or silver in bulk before coining, or valued by weight.                                                                                                                                                                                                                                                                                                                                                     |
| by-product             | A secondary metal or mineral product that is recovered along with the primary metal or mineral product during the ore concentration process.                                                                                                                                                                                                                                                               |
| Cache Creek Terrane    | A geologic terrane in British Columbia and southern Yukon, Canada. It consists of volcanics, carbonate rocks, coarse clastic rocks and small amounts of ultramafic rock, chert and argillite.                                                                                                                                                                                                              |
| calc-alkalic           | Rocks are rich in alkaline earths (magnesia and calcium oxide) and alkali metals and make up a major part of the crust of the earth's continents.                                                                                                                                                                                                                                                          |
| carbon-in-leach (CIL)  | A process step wherein granular activated carbon particles much larger than the ground ore particles are introduced into the ore pulp. Cyanide leaching and precious metals adsorption onto the activated carbon occurs simultaneously. The loaded activated carbon is mechanically screened to separate it from the barren pulp, processed to remove the precious metals and finally prepared for reuse.  |
| Cenozoic               | The current and most recent of the three Phanerozoic geological eras, following the Mesozoic Era and covering the period from about 65 million years ago to the present.                                                                                                                                                                                                                                   |

----

| Term | Definition |
|------|------------|

| center-return hammer            | A type of reverse circulation drilling bit and pneumatic hammer system that collects the sampled material at the operating face of the drill bit.                                                                                                                                                        |
|---------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| chalcocite                      | A dark gray mineral that is an important ore of copper.                                                                                                                                                                                                                                                  |
| chalcopyrite                    | A copper mineral composed of copper, iron and sulphur. It tarnishes easily; going from bronze or brassy yellow to yellowish or grayish brown, has a dark streak, and is lighter in weight and harder than gold.                                                                                     |
| colluvium                       | Loose, unconsolidated sediments that have been deposited at the base of hillslopes by either rain-wash, sheet wash, slow continuous downslope creep, or a variable combination of these processes.                                                                                                  |
| comminution                     | The action of reducing an ore by crushing and grinding to minute particles or fragments.                                                                                                                                                                                                                 |
| concentrate                     | A processing product containing the valuable ore mineral from which most of the waste mineral has been eliminated.                                                                                                                                                                                  |
| conventional rotary             | A drilling method that produces rock chips similar to reverse circulation except that the sample is collected using a single-walled drill pipe. Air or water circulates down through the center of the drill pipe and returns chips to the surface around the outside of the pipe.                  |
| core drilling                   | Drilling method that uses a rotating barrel and an annular-shaped, diamond-impregnated rock-cutting bit to produce cylindrical rock cores and lift them to the surface to be examined.                                                                                                              |
| Cretaceous                      | A geologic period and system from circa 145 to 66 million years ago. The Cretaceous follows the Jurassic period and is followed by the Paleogene period of the Cenozoic era. It is the last period of the Mesozoic Era, and, spanning 80 million years, the longest period of the Phanerozoic Eon.  |
| crushing                        | Breaking of ore into smaller and more uniform fragments to be then fed to grinding mills or to a leach pad.                                                                                                                                                                                              |
| crust                           | The outermost solid shell of a rocky planet, which is chemically distinct from the underlying mantle.                                                                                                                                                                                                    |
| cut-off grade                   | The minimum metal grade at which a tonne of rock can be processed on an economic basis.                                                                                                                                                                                                                  |
| cyanidation                     | A method of extracting exposed gold or silver grains from crushed or ground ore by dissolving the contained gold and silver in a weak cyanide solution.                                                                                                                                             |
| direct current (DC) resistivity | Observation of electric fields caused by current introduced into the ground as a means of studying earth resistivity in geophysical exploration. Resistivity is the property of a material that resists the flow of electrical current.                                                             |
| decline                         | A downward inclined underground tunnel.                                                                                                                                                                                                                                                                  |
| deformation                     | Change in the form or in the dimensions of a body produced by stress.                                                                                                                                                                                                                                    |
| Devonian                        | A geologic period and system of the Paleozoic Era spanning from the end of the Silurian Period, about 419 million years ago, to the beginning of the Carboniferous Period, about 359 million years ago                                                                                              |
| differential flotation          | Process of separation of a complex ore into two or more mineral components and gangue by flotation.                                                                                                                                                                                                      |
| dike                            | A discordant tabular body of igneous rock that, when molten, was injected into a fissure that cuts across the structure of the adjacent country rocks and which usually has a high angle of dip.                                                                                                    |
| dilution                        | The effect of waste or low-grade ore being included unavoidably in the mine ore, lowering the recovered grade.                                                                                                                                                                                           |
| diorite                         | A grey to dark grey intermediate intrusive igneous rock composed principally of plagioclase feldspar (typically andesine), biotite, hornblende, and/or pyroxene.                                                                                                                                    |
| doré                       | Unrefined gold and silver bullion bars, which will be further refined to almost pure metal.                                                                                                                                                                                                              |
| drift                           | A horizontal tunnel generally driven within or alongside an ore body and aligned parallel to the long dimension of the ore.                                                                                                                                                                         |

----

| Term | Definition |
|------|------------|

| easement                 | An incorporeal right, distinct from the ownership of the soil, consisting of a liberty, privilege, or use of another's land without profit or compensation; a right-of-way.                                                                                                                                                                                                                                                                                                                                                  |
|--------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ejido                    | In Mexico, a piece of land farmed communally under a system supported by the state.                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| electromagnetic survey   | Using a geophysical method of measuring electromagnetic waves in a specific area of the earth's surface.                                                                                                                                                                                                                                                                                                                                                                                                                     |
| electrowinning           | Recovery of a metal from a solution by means of electro-chemical processes.                                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| Eocene                   | A major division of the geologic timescale and the second epoch of the Paleogene Period in the Cenozoic Era. The Eocene spans the time from the end of the Palaeocene Epoch to the beginning of the Oligocene Epoch. The start of the Eocene is marked by the emergence of the first modern mammals.                                                                                                                                                                                                                    |
| epithermal               | A hydrothermal mineral deposit formed within about one kilometre of the Earth’s surface and in the temperature range of 50 to 200 degrees Celsius, occurring mainly as veins.                                                                                                                                                                                                                                                                                                                                     |
| fault                    | A fracture in the earth’s crust accompanied by a displacement of one side of the fracture with respect to the other and in a direction parallel to the fracture.                                                                                                                                                                                                                                                                                                                                                       |
| feasibility study        | A comprehensive technical and economic study of the selected development option for a mineral project that includes appropriately detailed assessments of realistically assumed mining, processing, metallurgical, economic, marketing, legal, environmental, social and governmental considerations together with any other relevant operational factors and detailed financial analysis, that are necessary to demonstrate at the time of reporting that extraction is reasonably justified (economically mineable).  |
| felsic                   | Silicate minerals, magma, and rocks which are enriched in the lighter elements such as silicon, oxygen, aluminium, sodium, and potassium.                                                                                                                                                                                                                                                                                                                                                                               |
| fire assay               | Analysis to determine the amount or proportion of the element of interest contained within a sample alloy by removal of other metals. Also known as gravimetric analysis.                                                                                                                                                                                                                                                                                                                                               |
| flotation                | A separation process in which valuable mineral particles are induced to become attached to bubbles and float, while the non-valuable minerals sink.                                                                                                                                                                                                                                                                                                                                                                     |
| formation                | Unit of sedimentary rock of characteristic composition or genesis.                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| geophysical survey       | Exploration activity mapping an area showing the physics of the earth.                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| grade                    | The amount of metal in each tonne of ore, expressed as grams per tonne for precious metals.                                                                                                                                                                                                                                                                                                                                                                                                                                  |
| granite                  | A very hard, granular, crystalline, igneous rock consisting mainly of quartz, mica, and feldspar and often used as a building stone.                                                                                                                                                                                                                                                                                                                                                                                    |
| granodiorite             | A coarse-grained, plutonic rock containing quartz and plagioclase, between granite and diorite in composition.                                                                                                                                                                                                                                                                                                                                                                                                          |
| gravity recovery circuit | Equipment used within a plant to recover gold from the ore using the difference in specific gravity between the gold and the host rock.                                                                                                                                                                                                                                                                                                                                                                                 |
| grinding (milling)       | Powdering or pulverising of ore, by pressure or abrasion, to liberate valuable minerals for further metallurgical processing.                                                                                                                                                                                                                                                                                                                                                                                           |
| heap leaching            | A process whereby gold is extracted by “heaping” broken ore on sloping impermeable pads and repeatedly spraying the heaps with a weak cyanide solution which dissolves the gold content. The gold-laden solution is collected for gold recovery.                                                                                                                                                                                                                                                            |
| hectares                 | A metric unit of area measuring 100 metres by 100 metres.                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| hedging                  | Taking a buy or sell position in a futures market opposite to a position held in the cash market to minimize the risk of financial loss from an adverse price change.                                                                                                                                                                                                                                                                                                                                                   |

----

| Term | Definition |
|------|------------|

| HQ                                    | A diamond drill core measuring 2.5 inches in diameter (6.35 centimetres).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
|---------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| hypogene                              | Producing or occurring under the surface of the earth.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Indicated Mineral Resource*           | The part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.                         |
| inductively-coupled plasma (ICP)      | Analytical technique whereby a sample is diluted and shaken, then aspirated into a high energy argon plasma where it is vaporized. The amount of light measured by the ICP for the characteristic elemental wavelengths is converted to elemental concentrations parts per million (ppm).                                                                                                                                                                                                                                                                                                                                                                                   |
| induced polarization (IP)             | A surface-based geophysical survey method used in mineral exploration.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Inferred Mineral Resource*            | The part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified, geological and grade continuity.  The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.                                                                                                                                                                                                                                                         |
| infill                                | The collection of additional samples between existing samples, used to provide greater geological detail and to provide more closely-spaced assay data.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| intrusive                             | Igneous rock which, while molten, penetrated into or between other rocks and solidified before reaching the surface.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |
| lode                                  | A mineral deposit, consisting of a zone of veins, veinlets or disseminations, in consolidated rock as opposed to a placer deposit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
| long-hole open stoping                | A method of underground mining involving the drilling of holes up to 30 metres or longer into an ore-bearing zone and then blasting a slice of rock which falls into an open space. The broken rock is extracted and the resulting open chamber may or may not be filled with supporting material.                                                                                                                                                                                                                                                                                                                                                                          |
| low-grade                             | Descriptive of ores relatively poor in the metal they are mined for; lean ore.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| mafic                                 | A group of dark-colored minerals, composed chiefly of magnesium and iron, that occur in igneous rocks.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |
| Measured Mineral Resource*            | The part of a Mineral Resource for which quantity, grade or quality, densities, shape, physical characteristics are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of the economic viability of the deposit.  The estimate is based on detailed and reliable exploration, sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough to confirm both geological and grade continuity.  |
| metamorphism                          | The process by which the form or structure of rocks is changed by heat and pressure.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| mill                                  | A processing facility where ore is finely ground and then undergoes physical or chemical treatment to extract the valuable metals. Also, the device used to perform grinding (milling).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| mineral claim / property / concession | Authorizes the holder to prospect and mine for minerals and to carry out works in connection with prospecting and mining.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| Mineral Reserve*                      | The economically mineable part of a Measured or Indicated Mineral Resource demonstrated by at least a preliminary feasibility study.  This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.  A Mineral Reserve includes diluting materials and allowances for losses that may occur when the material is mined.                                                                                                                                                                                 |

----

| Term | Definition |
|------|------------|

| Mineral Resource*                     | A concentration or occurrence of diamonds, natural, solid, inorganic or natural fossilized organic material including base and precious metals, coal, and industrial minerals in or on the Earth’s crust in such form and quantity and of such a grade or quality that it has reasonable prospects for economic extraction.  The location, quantity, grade, geological characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific geological evidence and knowledge.  Mineral Resources are subdivided, in order of increasing geological confidence, into Inferred, Indicated and Measured categories.  |
|---------------------------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| muscovite                             | A phyllosilicate mineral of aluminium and potassium. It has a highly-perfect basal cleavage yielding very thin sheets, which are often highly elastic.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| net cash costs                        | A non-GAAP financial measure calculating the costs of production, at site level, per unit of output. Includes operational costs, such as transport, refining, administration, and royalties.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
| net smelter return (NSR)              | A type of royalty payment where the royalty owner receives a fixed percentage of the revenues of a property or operation.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| NI 43-101                             | Canadian National Instrument NI 43-101 - A strict guideline for how public companies in Canada can disclose scientific and technical information about mineral projects.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| offtake agreement                     | A contractual agreement for one party to supply another with a product within certain conditions such as purity, timing, and volume. It obligates the off-taker to accept the product regardless of market conditions.                                                                                                                                                                                                                                                                                                                                                                                                                                                         |
| open-pit mine                         | A mine where materials are removed entirely from a working that is open to the surface.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |
| ore                                   | Rock, generally containing metallic or non-metallic minerals, which can be mined and processed at a profit.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| outcrop                               | A rock formation that is visible on the surface.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |
| oxidation                             | Reaction of a material with an oxidizer such as pure oxygen or air in order to alter the state of the material.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| oxide ore                             | Mineralized rock in which some of the original minerals have been oxidized. Oxidation tends to make the ore more amenable to cyanide solutions so that minute particles of gold will be readily dissolved.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |
| Paleozoic                             | An era of geologic time that includes the Cambrian, Ordovician, Silurian, Devonian, Mississippian, Pennsylvanian and Permian periods and is characterized by the appearance of marine invertebrates, primitive fishes, land plants and primitive reptiles.                                                                                                                                                                                                                                                                                                                                                                                                                     |
| preliminary economic assessment (PEA) | A study, other than a pre-feasibility study or feasibility study, which includes an economic analysis of the potential viability of mineral resources.  The PEA is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves and there is no certainty that the PEA based on these Mineral Resources will be realized.  Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.                                                                 |
| porphyry                              | A variety of igneous rock consisting of large-grained crystals, such as feldspar or quartz, dispersed in a fine-grained feldspathic matrix or groundmass.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |
| pre-feasibility study                 | Preliminary assessment of project viability that usually takes place in the identification stage of the project cycle. Pre-feasibility studies generally cover the same subjects as feasibility studies, but in much less detail.                                                                                                                                                                                                                                                                                                                                                                                                                                              |
| Probable Mineral Reserve*             | The economically mineable part of an Indicated Mineral Resource and, in some circumstances, a Measured Mineral Resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction can be justified.                                                                                                                                                                                                                                                                                |
| Proven Mineral Reserve*               | The economically mineable part of a Measured Mineral Resource demonstrated by at least a preliminary feasibility study.  This study must include adequate information on mining, processing, metallurgical, economic and other relevant factors that demonstrate, at the time of reporting, that economic extraction is justified.                                                                                                                                                                                                                                                                                                                                   |

----

| Term | Definition |
|------|------------|

| pyrite                                        | A yellow iron sulphide mineral, normally of little value. It is sometimes referred to as “fool’s gold.”                                                                                                                                                                                                                                                                      |
|-----------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| pyroclastic                                   | Rocks produced by explosive or aerial ejection of ash, fragments, and glassy material from a volcanic vent.                                                                                                                                                                                                                                                                                    |
| pyrrhotite                                    | A brownish yellow iron sulphide mineral.                                                                                                                                                                                                                                                                                                                                                       |
| Qualified Person*                             | an individual who is an engineer or geoscientist with at least five years’ experience in mineral exploration, mine development or operation or mineral project assessment, or any combination of these; has experience relevant to the subject matter of the mineral project and the technical report; and is a member or licensee in good standing of a professional association.  |
| quality assurance and quality control (QA/QC) | The process of measuring and assuring product quality to meet consumer expectations.                                                                                                                                                                                                                                                                                                           |
| reclamation                                   | The restoration of a site after mining or exploration activity is completed.                                                                                                                                                                                                                                                                                                                   |
| reclamation and closure costs                 | The cost of reclamation plus other costs, including without limitation certain personnel costs, insurance, property holding costs such as taxes, rental and claim fees, and community programs associated with closing an operating mine.                                                                                                                                                 |
| recovered grade                               | Actual metal grade realized by the metallurgical process and treatment or ore, based on actual experience or laboratory testing.                                                                                                                                                                                                                                                          |
| recovery                                      | A term used in process metallurgy to indicate the proportion of valuable material obtained in the processing of an ore. It is generally stated as a percentage of valuable metal in the ore that is recovered compared to the total valuable metal present in the ore.                                                                                                                    |
| refining                                      | The final stage of metal production in which impurities are removed from the molten metal.                                                                                                                                                                                                                                                                                                     |
| refractory material                           | Mineralized material in which the metal is not amenable to recovery by conventional cyanide methods without any pre-treatment.                                                                                                                                                                                                                                                            |
| reverse circulation                           | A drilling method that uses a rotating cutting bit within a double-walled drill pipe and produces rock chips rather than core. Air or water is circulated down to the bit between the inner and outer wall of the drill pipe. The chips are forced to the surface through the centre of the drill pipe and are collected, examined and assayed.                                           |
| run-of-mine                                   | Ore in its natural, unprocessed state; pertaining to ore just as it is mined.                                                                                                                                                                                                                                                                                                                  |
| sample                                        | A small portion of rock, or a mineral deposit, taken so that the metal content can be determined by assaying.                                                                                                                                                                                                                                                                             |
| scoping study                                 | A technical and economic study conducted to investigate the approximate economics and viability of various development options for the mining and treatment of a mineral deposit.                                                                                                                                                                                                         |
| sedimentary rocks                             | Secondary rocks formed from material derived from other rocks and laid down under water. Examples are limestone, shale and sandstone.                                                                                                                                                                                                                                                     |
| semi-autogenous (SAG) mill                    | A steel cylinder with steel balls into which run-of-mine material is fed. The ore is ground with the action of large lumps of rock and steel balls.                                                                                                                                                                                                                                       |
| shaft                                         | A vertical passageway to an underground mine for ventilation, moving personnel, equipment, supplies and material including ore and waste rock.                                                                                                                                                                                                                                            |
| shear zone                                    | A geological term used to describe a geological area in which shearing has occurred on a large scale.                                                                                                                                                                                                                                                                                          |
| silica                                        | The dioxide of silicon occurring in crystalline, amorphous, and impure forms (as in quartz, opal, and sand respectively). Used to manufacture a wide variety of materials, especially glass and concrete.                                                                                                                                                                                 |
| sphalerite                                    | A zinc mineral which is composed of zinc and sulphur.                                                                                                                                                                                                                                                                                                                                          |

----

| Term | Definition |
|------|------------|

| stock                     | A magma that has intruded into pre-existing rock in a columnar shape, typically a kilometre or more in diameter.                                          |
|---------------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|
| stockpile                 | Broken ore heaped on the surface, pending treatment or shipment.                                                                                          |
| stockwork                 | A mineral deposit consisting of a three-dimensional network of planar to irregular veinlets closely enough spaced that the whole mass can be mined.  |
| tailings                  | The material that remains after all metals considered economic have been removed from ore during milling.                                            |
| tailings storage facility | A natural or man-made confined area suitable for depositing the material that remains after the treatment of ore.                                    |
| terrane                   | Area of land of a particular character, e.g., mountainous, swampy.                                                                                        |
| tonne                     | Metric unit of mass equaling 1,000 kilograms or 2,240 pounds. Called a "long ton."                                                                        |
| ton                       | Unit of weight equaling 2,000 pounds. Called a "short ton."                                                                                               |
| total cash costs          | A non-GAAP financial measure calculated by dividing all of the costs absorbed into inventory by applicable ounces sold.                              |
| tuff                      | Rock composed of fine volcanic ash.                                                                                                                       |
| vein                      | A fissure, fault or crack in a rock filled by minerals that have traveled upwards from some deep source.                                                  |
| volcanics                 | A general collective term for extrusive igneous and pyroclastic material and rocks.                                                                       |

----

| m          | micron                                                                                                                                           |
|------------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| AA         | Atomic Absorption                                                                                                                                |
| Ag         | Silver                                                                                                                                           |
| Au         | Gold                                                                                                                                             |
| °C    | degree Celsius                                                                                                                                   |
| °F    | degree Fahrenheit                                                                                                                                |
| Doré  | Semi-pure alloy of gold and silver, usually created at a mine site, which is transported to a precious metals refinery for further purification. |
| mg         | microgram                                                                                                                                        |
| cm         | centimetre                                                                                                                                       |
| cm2        | square centimetre                                                                                                                                |
| Cu         | Copper                                                                                                                                           |
| ft         | foot                                                                                                                                             |
| g          | gram                                                                                                                                             |
| G          | giga (billion)                                                                                                                                   |
| Gwh        | gigawatt-hour                                                                                                                                    |
| HQ         | diamond drill core measuring 6.35 cm in diameter                                                                                                 |
| hr or h    | hour                                                                                                                                             |
| ha         | hectare                                                                                                                                          |
| ICP        | Induction Coupled Plasmaspectrometry                                                                                                             |
| in         | inch                                                                                                                                             |
| J          | joule                                                                                                                                            |
| K          | kilo (thousand)                                                                                                                                  |
| kg         | kilogram                                                                                                                                         |
| km         | kilometre                                                                                                                                        |
| km2        | kilometres squared                                                                                                                               |
| L          | litre                                                                                                                                            |
| lb         | pound                                                                                                                                            |
| m          | metre                                                                                                                                            |
| m2         | metres squared                                                                                                                                   |
| M          | mega (million)                                                                                                                                   |
| mm         | millimetre                                                                                                                                       |
| MW         | megawatt                                                                                                                                         |
| MWh        | megawatt-hour                                                                                                                                    |
| NQ         | diamond drill core measuring 4.76 cm in diameter                                                                                                 |
| opt, oz/st | ounce per short ton                                                                                                                              |
| oz         | Troy ounce/ounce (31.1035g)                                                                                                                      |
| Pb         | Lead                                                                                                                                             |
| PQ         | diamond drill core measuring 8.5 cm in diameter                                                                                                  |
| RC         | reverse circulation                                                                                                                              |
| RL         | relative elevation                                                                                                                               |
| s          | second                                                                                                                                           |
| st         | short ton (one short ton equals 0.907 metric tonnes)                                                                                             |
| stpa       | short ton per year                                                                                                                               |
| stpd       | short ton per day                                                                                                                                |
| t          | metric tonne (one metric tonne equals 1.102 short tons)                                                                                          |
| tpa/tpy    | metric tonne per year                                                                                                                            |
| tpd        | metric tonne per day                                                                                                                             |
| V          | volt                                                                                                                                             |
| W          | watt                                                                                                                                             |
| yd         | yard                                                                                                                                             |
| Zn         | Zinc                                                                                                                                             |

----

| Imperial                  | Converts to | Metric              |
|---------------------------|-------------|---------------------|
| 1 in                      | =           | 2.54 cm             |
| 1 ft (12 in)              | =           | 0.3048 m            |
| 1 yd (3ft)                | =           | 0.9144 m            |
| 1 mile (1760 yd)          | =           | 1.6093 km           |
| 1 square in (in2)         | =           | 6.4516 cm2          |
| 1 square ft (ft2)         | =           | 0.0929 m2           |
| 1 square yd (yd2)         | =           | 0.8361 m2           |
| 1 acre (4840 yd2)         | =           | 4046.9 m2           |
| 1 square mile (640 acres) | =           | 2.59 km2            |
| short ton                 | =           | 0.907 metric tonnes |

----

|        | 2012   | 2011   | 2010   |
|-------------|--------|--------|--------|
| High        | 1.0418 | 1.0604 | 1.0778 |
| Low         | 0.9710 | 0.9449 | 0.9946 |
| Average (1) | 0.9996 | 0.9891 | 1.0299 |
| Closing     | 0.9949 | 1.0170 | 0.9946 |

|   |  (1) Calculated as an average of the daily noon rates for each period. |
|--------|-----------------------------------------------------------------------------|

|    | 2012($) | 2011($) | 2010($) |
|---------|---------|---------|---------|
| High    | 1,792   | 1,895   | 1,421   |
| Low     | 1,540   | 1,319   | 1,058   |
| Average | 1,669   | 1,572   | 1,225   |
| Closing | 1,658   | 1,531   | 1,406   |

|   | 2012($) | 2011($) | 2010($) |
|--------|---------|---------|---------|

| High    | 37.23 | 48.70 | 30.70 |
|---------|-------|-------|-------|
| Low     | 26.67 | 26.16 | 15.14 |
| Average | 31.15 | 35.12 | 20.16 |
| Closing | 29.95 | 28.18 | 30.63 |

----

|   | 2012($) | 2011($) | 2010($) |
|--------|---------|---------|---------|

| High    | 3.96 | 4.62 | 4.42 |
|---------|------|------|------|
| Low     | 3.30 | 3.05 | 2.76 |
| Average | 3.61 | 4.00 | 3.42 |
| Closing | 3.59 | 3.44 | 4.42 |

----

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