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<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Focus Gold Corporation (the "Company") was incorporated
on December 23, 2005 under the laws of the state of Nevada under the name Real Estate Referral Center Inc. On April 21, 2009, the
Company changed its name to Gold Bag, Inc. and effective June 6, 2011 to Focus Gold Corporation. In October 2010 the Company entered
into an option agreement with Victoria Gold Inc. for the right to explore and purchase mineral claims located in Ontario Canada
and since that time the Company’s principal business has been the acquisition and exploration of mineral resources. The Company
is considered an exploration stage company and its financial statements are presented in a manner similar to a development stage
company as defined in FASC 915-10-05, and interpreted by the Securities and Exchange Commission for mining companies in Industry
Guide 7.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On December 31, 2010, the Company acquired 100% ownership
of Fairfields Gold S.A. de CV, a Mexican corporation involved in the exploration and expansion of its mineral properties. On October
25, 2011, through its wholly owned subsidiary Focus Celtic Gold Corporation (“Celtic”) the Company completed on the
acquisition of 98.65% ownership of Metallum Resources Plc. (“Metallum”), an England &Wales corporation which is
involved in the exploration and expansion of its mineral properties. Subsequent to the acquisition, the Company exchanged shares
of Celtic for settlement of accounts payable reducing the Company’s equity stake in Celtic to 92.16%. On October 5, 2012,
the Company disposed its 92.16% interest in Celtic. The associated assets and liabilities of Celtic and Metallum have been classified
as discontinued operations at February 29, 2012. The associated assets and liabilities of Celtic and Metallum Resources Plc. thereafter
have been reflected in discontinued operations.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The prior period results of continuing operations of Celtic
have been reclassified to profit (loss) from discontinued operations and the prior year amounts have been reclassified to
present the Company's operations as discontinued operations in the condensed consolidated statements of operations for all
periods presented herein.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company has not presently determined whether its properties
in Mexico contain mineral reserves that are economically recoverable.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">All significant intercompany accounts and transactions are
eliminated in consolidation.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">This summary of significant accounting
policies of the Company is presented to assist in understanding the Company’s financial statements. </font>This condensed
summary should be read in conjunction with the disclosure of accounting policies in the Company’s audited financial statements
for the year ended February 29, 2012.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(a)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Mineral Properties, Leases and Exploration and Development Costs</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">The Company accounts for mineral
properties in accordance with ASC 930: <i>Extractive Activities-Mining</i>. Costs of acquiring mineral properties and
leases are capitalized by project area upon purchase of the associated claims </font>(see Note 5)<font style="color: black">.Mineral
properties are periodically assessed for impairment of value and any diminution in value.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company accounts for mineral exploration and development
costs in accordance with ASC 932: <i>Extractive Activities</i>.  All exploration expenditures are expensed as incurred,
previously capitalized costs are expensed in the</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">period the property is abandoned.  Expenditures to develop
new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized
and amortized on units of production basis over proven and probable reserves.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><br />
Any option payments received by the Company from third parties or tax credits refunded to the Company are credited to the capitalized
cost of the mineral property or to exploration costs as applicable. If payments received exceed the capitalized cost of the mineral
property or the exploration costs incurred, the excess is recognized as income in the year received.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The amounts shown for mineral properties do not necessarily
represent present or future values. Their recoverability is dependent upon the discovery of economically recoverable reserves,
the ability of the Company to obtain the necessary financing to complete the development, and future profitable production or proceeds
from the disposition thereof.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(b)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Derivative instruments</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Derivative instruments consist of common stock warrants and
certain instruments embedded in certain notes payable and related agreements. These financial instruments are recorded in the balance
sheets at fair value as liabilities. Changes in fair value are recognized in earnings in the period of change.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(c)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Impairment of long-lived assets</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company reviews and evaluates its long-lived assets for
impairment at each balance sheet date and documents such impairment testing. The tests include an evaluation of the assets and
events or changes in circumstances that would indicate that the related carrying amounts may not be recoverable. Mineral properties
in the exploration stage are monitored for impairment based on factors such as the Company's continued right to explore the area,
exploration reports, assays, technical reports, drill results and the Company's continued plans to fund exploration programs on
the property, whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried
forward as an asset will not be fully recovered, even though a viable mine has been discovered.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The tests for long-lived assets in the exploration, development
or producing stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors
such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral
prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be
held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows
expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company's policy is to record an impairment loss in the
period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment
of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value.
While the Company incurred losses from operations, these losses have not been in excess of planned expenditures on the specific
mineral properties in order to ultimately realize their value.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">During the nine months ended November 30, 2012, the Company
recorded an impairment charge on its Metallum properties and Watabeag & Russell claims (Notes 3 and 5(b)).</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(d)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Stock-based compensation</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company accounts for stock based compensation to employees
as required by ASC718: <i>Compensation-Stock Compensation </i>and stock based compensation to nonemployees as required by
ASC505-50: <i>Equity-Based Payments to Non-Employees</i>.  Options and warrants are valued using the Black-Scholes pricing
model (See Note 7). The offset to the recorded stock based compensation cost is to additional paid-in capital. Consideration received
on the exercise of stock options is recorded as share capital and additional paid-in capital and the related additional paid-in
capital is transferred to share capital.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-align: center"></p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(e)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Warrants</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company accounts for warrants issued in conjunction with
stock issuances under private placement using the fair value method. Under this method, the value of warrants issued is measured
at fair value at the grant date using the Black-Scholes valuation model and recorded as share capital and additional paid-in capital.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: #252525">The Company recognized the value
of detachable warrants issued in conjunction with issuance of the convertible debenture using the Black-Scholes pricing model.
The Company recorded the relative fair value of the warrant as an increase to additional paid-in capital and discount against the
related debt. The discount attributed to the value of the warrants is being amortized over the term of the underlying debt instrument</font>.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(f)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Recent accounting pronouncements</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In May 2011, the FASB issued Accounting Standards Update No.
2011-04 (ASU No. 2011-04) “Fair Value Measurement” (Topic 820): Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs. As a result of the new guidance, U.S. GAAP and the IFRSs have the same definition
and meaning of fair value and the same substantive disclosure requirements about fair value measurements (with minor differences
in wording and style). ASU No. 2011-04 amends Topic 820 in two ways. Specifically, some of the amendments clarify how to apply
the existing fair value measurement and disclosure requirements, while some of the amendments change a particular principle or
requirement for measuring fair value or disclosing information about fair value measurements. ASU No. 2011-04 and IFRS 13 do not
extend the use of fair value accounting, but rather provide guidance on how it should be applied where its use is already required
or permitted by other standards within U.S. GAAP or the IFRS. ASU No. 2011-04 supersedes much of the guidance in ASC Topic 820,
but also clarifies existing guidance and changes certain wording in order to align ASC Topic 820 with IFRS 13. IFRS 13 provides,
for the first time, a precise definition of fair value and a single source of fair value measurement requirements, disclosure requirements,
and related guidance for use across the IFRSs. The Company’s adoption of this policy did not have a material effect on the
Company’s consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In June 2011, the FASB issued Accounting Standards Update
No 2011-05 (ASU No 2011-05), <font style="color: black">“</font>Comprehensive Income (Topic 220): Presentation of Comprehensive
Income”. ASU 2011-05 eliminates the option that permits the presentation of other comprehensive income in the statement of
changes in equity and requires presenting components of net income and comprehensive income in either a one-statement approach
with totals for both net income and comprehensive income, or a two-statement approach where a statement presenting the components
of net income and total net income must be immediately followed by a financial statement that presents the components of other
comprehensive income, a total for other comprehensive income, and a total for comprehensive income. The guidance provided in ASU
No. 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and should
be applied retrospectively. The adoption of this ASU did not have a material impact on our consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In September 2011, the FASB issued ASU No. 2011-08, which
updates the guidance in ASC Topic 350,<font style="color: black"> “</font>Intangibles – Goodwill& Other”
(ASU-2011-08). The amendments in ASU 2011-08 permit an entity to first assess qualitative factors to determine whether it is more
likely than not that the fair value of a reporting unit is less than the carrying amount as a basis for determining whether it
is necessary to perform the two-step goodwill impairment test described in ASC Topic 350. The more-likely-than-not threshold is
defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, an entity
determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing
the two-step impairment test is unnecessary. The amendments in ASU 2011-08 include examples of events and circumstances that an
entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its
carrying amount, however the examples are not intended to be all-inclusive and an entity my identify other relevant events and
circumstances to consider in making the determination. The examples in this ASU 2011-08 supersede the previous examples under ASC
Topic 350 of events and circumstances an entity should consider in determining whether it should test for impairment between annual
tests, and also supersede the examples of events and circumstances that an entity having a reporting unit with a zero or negative
should consider in determining whether to perform the second step of the impairment test. Under the amendments in ASU 2011-08,
an entity is no longer permitted to carry forward its detailed calculation of a reporting unit's fair value from a prior year as
previously permitted under ASC Topic 350. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for
fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 did not expected to have a material impact on the Company's
financial position or results of operations.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In December 2011, the FASB issued ASU No. 2011- 12, “Comprehensive
Income – Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated
Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”). ASU 2011-12 defers changes
in Update 2011-05 that relate to the presentation of reclassification adjustments. ASU 2011-12 is effective for fiscal years, and
interim periods within those years, beginning after December 15, 2011 (November 30, 2012 for the Company). The adoption of ASU
2011-12 did not have a material impact on our results of operations, financial condition, or cash flows.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company has implemented all new accounting pronouncements
that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed,
and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(g)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Going concern</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">The Company's financial statements
are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States
of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of
liabilities in the normal course of business. The Company incurred a net </font>loss of $5,393,656 during<font style="color: black">
the nine month period ended November 30, 2012, and has an accumulated deficit </font>of $11,947,800<font style="color: black">
since entry into the exploration stage.</font> Additionally, the Company is in default of various notes with principal amounts
aggregating $765,556.<font style="color: black"> The Company changed its principal business to the development and exploitation
of mineral properties in October 2010, but has not yet established an ongoing source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on
the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain
adequate capital, it could be forced to cease development of operations.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In order to continue as a going concern, develop a reliable
source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital
resources. Management’s plans to continue as a going concern include raising additional capital through sales of common stock
and or a debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing
any of its plans.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The ability of the Company to continue as a going concern
is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other
sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(h)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Fair value measurements.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The FASB’s Accounting Standards Codification defines
fair value as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction
between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the
following three categories:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 92.15pt; text-indent: -35.4pt">Level 1 – Quoted prices
for identical instruments in active markets.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt">Level 2 – Quoted
prices for similar instruments in active or inactive markets and valuations derived from models where all significant inputs are
observable in active markets.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt">Level 3 – Valuations
derived from valuation techniques in which one or more significant inputs are unobservable in any market.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">Given the conditions surrounding
the trading of the Company’s equity securities, the Company values its derivative instruments related to embedded conversion
features and warrants from the issuance of convertible debentures in accordance with the Level 3 guidelines. For the nine months
period ended November 30, 2012, the following table reconciles the beginning and ending balances for financial instruments that
are recognized at fair value in these condensed consolidated financial statements. </font>The fair value of warrants and embedded
conversion features that have exercise reset features are estimated using an adjusted Black-Scholes model based on the Company’s
estimation of the likelihood of the occurrence of a reset.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance at February 29, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">New Issuances</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Changes in Fair Values</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance at November 30, 2012</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5.4pt; line-height: 115%">Level 3 –</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 5.4pt; line-height: 115%">Derivative liabilities from:</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 32%; padding-left: 5.4pt; line-height: 115%">Conversion features</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">1,613,847</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">(1,112,041</td>
<td style="width: 1%; line-height: 115%">)</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">501,806</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 5.4pt; line-height: 115%">Warrants</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">418,531</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(182,070</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">236,461</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5.4pt; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">2,032,378</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(1,294,111</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">738,267</td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Changes in the unobservable input values would likely cause
material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable input used
in the fair value measurement is the estimation of the likelihood of the occurrence of a change to the contractual terms of the
financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">(a)</td>
<td style="line-height: 115%">Reclassification.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Certain amounts in the balance sheet of February 29, 2012
and statement of operations for the three and nine months ended November 30, 2011 have been reclassified to conform with the current
year’s presentation.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">All references to common shares of the Company have been adjusted
to give effect to the implementation of a 20:1 reverse split of the Company’s authorized and issued common stock which was
effected in the subsequent events period on January 14, 2013.</p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">On October 5, 2012 the Company
entered an agreement with European Resource Capital Inc. for the sale of the Company’s 24,420,000 shares of common stock
of Celtic (92.16% interest), 64,987,982 Metallum options providing the acquirer with the option to acquire an additional 64,987,982
common shares of Metallum for </font>£0.10 per share through December 31, 2012 <font style="color: black">and amounts receivable
from Celtic of approximately $217,031 in exchange for $2,500,000 (Canadian) (approximately $2,553,778 at exchange rates at the
date of this transaction). European Resource Capital Inc. issued the Company an eight percent (8%) 5 year $2,500,000 (Canadian)
promissory note payable that is secured by the 24,420,000 shares of Celtic common stock. </font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">A summarized statement of operations for the discontinued
operations for the comparable nine month periods ended November 30, 2012 and 2011 is as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">Nine months ended</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">November 30,</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">November 30,</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2011</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Revenues</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 66%; line-height: 115%">Exploration expense</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">82,615</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Mineral property impairment</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">2,756,456</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">General and administrative</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">269,223</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">29,433</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Total operating expenses</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">3,108,294</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(29,433</td>
<td style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Net gain on assets and liabilities written off</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(295,898</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Amortization of debt discount</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">303,183</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Interest and finance cost</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">19,389</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Non-controlling interest in operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(125,448</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(392</td>
<td style="line-height: 115%">)-</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Loss from discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(3,009,520</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(29,041</td>
<td style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b>Assets classified as Assets from Discontinued Operations:</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">November 30,</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">February 29,</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; font-weight: bold">Assets</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 66%; line-height: 115%">Cash and cash equivalents</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">82,537</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Prepaid expenses</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">52,562</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Taxes receivable</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">275</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; font-weight: bold">Total current assets classified as discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">135,374</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Equipment</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">9,486</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Mineral property expenses</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">6,142,039</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; font-weight: bold">Total long term assets classified as discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">6,151,525</td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b>Liability classified as Liabilities from Discontinued Operations:</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">November 30,</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">February 29,</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%; font-weight: bold">Liabilities</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 66%; line-height: 115%">Accounts payable and accrued expenses</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">219,735</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Accounts payable and accrued expenses - related</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">156,414</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Notes payable, net of discounts</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">21,656</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%; font-weight: bold">Total current liabilities classified as from discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">397,805</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Comprehensive income (loss)</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(3,879</td>
<td style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; font-weight: bold">Non-controlling interest</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">69,044</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%; font-weight: bold">Total long term liabilities classified as discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">65,165</td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On August 24, 2012, the Company settled the amount of $70,629
of amounts payable to a former director of the Company in exchange for 280,000 common shares of the Company subsidiary Celtic.
The Company recognized a gain of $44,041 on this transaction and a mineral property impairment of $33,220. The 280,000 shares of
common stock transferred in this settlement represent 1.06% of the issued and outstanding shares of common stock of Celtic.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Effective July 1, 2012, the Company settled the amount of
$47,303 of amounts payable to the former CEO of the Company in exchange for 440,000 common shares of the Company’s subsidiary
Celtic. Additionally the former CEO surrendered 170,000 shares of the Company’s common stock with a fair value of $129,200
in exchange for 1,360,000 shares of Celtic common stock. The Company recognized a loss of $155,776 on the disposition of the 1,800,000
common shares of Celtic’s common stock transferred by the Company in this transaction and a mineral property impairment of
$52,203. The 1,800,000 shares of common stock transferred in this settlement represent 6.79% of the issued and outstanding shares
of common stock of Celtic.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">As at October 5, 2012, the Company owned a 92.16% interest
in Celtic before the sale described in Note 3- discontinued operations.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The continuity of expenditures on mineral property acquisitions
is as follows:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%">Mineral property</td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">February 29, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Additions</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Disposals and Impairments</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">November 30, 2012</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 32%; line-height: 115%">Canada <br /> Watabeag, Russell Creek,</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">50,000</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">(50,000</td>
<td style="width: 1%; line-height: 115%">)</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Mexico</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Huicicila</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">6,086,002</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">6,086,002</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">United Kingdom & Ireland</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Metallum Claims</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">6,142,038</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(6,142,038</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">12,278,040</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(6,192,038</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">6,086,002</td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">There are no proven reserves on any of the claims or leases
which the Company has under option or has an ownership interest in. The Company has interests in the following properties:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">(a)</td>
<td style="line-height: 115%">Huicicila Claims - Mexico</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On November 10, 2010, the Company signed a definitive agreement
to acquire Fairfields Gold S.A. de CV. Fairfields owns an option to acquire 100% of the Huicicila gold claims in Nayarit Mexico
(see Note 9(b)). The Huicicila claims contain a high grade gold-silver mesothermal vein. The property is located 25 kilometers
southeast of Tepic and 10 kilometers northwest of Compostela in the State of Nayarit. The Project is covered by five mining
claims with a surface of 1012 hectares.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Since the acquisition at December 31, 2010, the Company through
its subsidiary Fairfields has conducted an exploration program to determine the extent of prior workings and mineralization on
the property.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">  </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">(b)</td>
<td style="line-height: 115%">Watabeag & Russell Creek Claims – Ontario, Canada (terminated November 27, 2012)</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On October 1, 2010 the Company and Victoria Gold Corp. entered
into an option agreement covering 16 gold mining claims in the Province of Ontario.  Under the option agreement, the Company
has the right to acquire Victoria Gold Corp.’s ownership interest in eight (8) mining claims located in Currie Township,
Timmins Mining District, Ontario known as the Watabeag property and eight (8) mining claims located in Bowman Township, Timmins
Mining District, Ontario known as the Russell Creek property.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Watabeag property comprises a total of 131 hectares and
is located approximately 60km east of Timmins, Ontario. Exploration on the property began in 1973 with additional drilling in the
80’s. Four overburden holes were drilled in 1980 to follow up anomalous gold values. An additional 11 overburden holes were
completed in 1981 to define two anomalies with well-defined head and tail features. The initial drill hole intersected mixed dacite
and feldspar with a brecciated and altered zone assaying 8.9g/t Au across a 0.9m interval.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Russell Creek property is a total of 128 hectares and
is located approximately 70 kilometers east of Timmins. Minor exploration for gold commenced in 1980 when Asarco (Cook Joint Venture)
completed ground magnetic and EM surveys in the area of two weak airborne EM conductors. The surveys defined a north west trending
fault structure along Russell Creek.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On November 27, 2012, the Company reached agreement with Victoria
Gold Corp. to terminate the option agreement without liability or obligation by the Company. The Company has accordingly expensed
the $50,000 carrying value of the Watabeag & Russell to impairment of mineral properties in the condensed consolidated statement
of operations for the three and nine month periods ended November 30, 2012.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">As at November 27, 2012, the Company had not commenced exploration
activities on these properties.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">(c)</td>
<td style="line-height: 115%">San Nicholas & Santa Fe - Mexico</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">On February 11, 2011, the Company,
through its wholly-owned subsidiary Fairfields entered into an agreement, with the owner of the Santa Fe and San Nicholas mineral
claims to acquire an 80% interest in such claims for no cost. The Santa Fe property strategically extends the Company's historic
Miravalles Vein. The San Nicolas property includes the caldera border that lies adjacent to the Huicicila property. The properties
have a collective surface area of 220 hectares and are being evaluated with the work programs undertaken for the </font>Huicicila
Claims<font style="color: black">.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; background-color: white"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">(d)</td>
<td style="line-height: 115%">Focus 1 to 3 - Mexico</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">During the year ended February
28, 2011, the Company, through its wholly-owned subsidiary Fairfields, staked and applied for additional mineral claims for property
contiguous with its </font>Huicicila and San Nicholas and Santa Fe Claims The properties have a surface area of 18,289.05 hectares
for the Focus 1 claims, 10,850 hectares for the Focus 2 claims and 2,367.78 hectares for the Focus 3 claims. The Company has conducted
limited geological work on these claims.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">(e)</td>
<td style="line-height: 115%">Metallum properties - United Kingdom and Ireland (disposed of October 5, 2012)</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company has disposed of the Metallum properties as at
October 5, 2012 with its sale of its 92.16% interest in Celtic (see note 3, “Discontinued Operations”). Includes thirty
one exploration licenses in Northern Ireland, Scotland and Ireland covering in excess of 388,000 hectares owned by Metallum, Celtic’s
98.65% owned subsidiary. The licenses cover areas of known mineral occurrences and geochemical anomalies in terrain that is geologically
prospective for a number of deposit types for a variety of metals.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">During the quarter ended August 31, 2012, certain of the licenses
held by Metallum had expired and management has determined that there is a material doubt about the renewal or re-acquisition of
such licenses and were written down to their fair value of $3,300,159, resulting in an impairment charge of $2,841,879 which was
included in the loss from operations of the discontinued entity for the period. As at February 29, 2012 the carrying value of the
Metallum properties of $6,142,038 was included in assets in discontinued operations on the balance sheet. In the quarter ended
November 30, 2012 the Metallum properties have been removed from the Company’s mineral property rights on the balance sheet
with the sale of Celtic.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">In July 2011, the Company entered
into a Demand Promissory Note (the “Note”) with a private investor as the lender with the principal amount of $200,000.
The Note is payable on demand by the lender after August 30, 2011 and accrues interest at the rate of 2% per month calculated
and compounded monthly until maturity. A commitment, arrangement and placement fee of $59,000 is payable at maturity. The commitment,
arrangement and placement fee of $59,000 was initially recorded as a discount to the Note. The Note has a provision that if not
repaid upon demand within 3 days, the lender may elect to receive as full repayment for the loan in restricted common stock of
the Company at the rate of five times the principal divided by the 10 day average closing price of the Company’s common stock
prior to the date of demand</font>. On March 1, 2012, the Company finalized a settlement agreement with the lender for an amount
of $400,000 as full and complete satisfaction of principal, interest, commitment arrangement, placement fees and any other right
of the lender under the Note. On March 29, 2012, the Company reached a settlement agreement on its Note, to settle the amount
owing at $400,000. The Note was further amended to remove any provisions that allowed for payment of the loan through penalty
shares which was replaced with a convertible feature. Under the amendments the Note now bears interest, at the election of the
holder at 1%, per month compounded monthly, matures October 1, 2012, and is convertible at any time into shares of the Company’s
common stock, at the holder’s option, at a conversion price, equal to 80% of the average of the three lowest trade prices
for the Company’s common stock during the 20 trading days prior to the conversion. The holder has agreed to restrict their
ability to convert the Note and receive shares of common stock such that the number of shares of common stock held by them in
the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding
shares of the Company’s common stock. No interest or principal payments are required until the maturity date. Principal and
interest may be prepaid prior to maturity. The number of shares reserved for issue under the Note is 300,000 shares of the Company’s
common stock. The Company determined that the resulting modifications of the Note was not substantial in accordance with ASC 470-50,
“Modifications and Extinguishments”, thus modification accounting was applied. The Note has been determined to have
a derivative liability related to its conversion feature with a fair value of $457,552 at March 29, 2012. The fair value of the
derivative liability was determined using the Black-Scholes option pricing model with the following assumptions: expected life
of 0.51 years; volatility of 91.7%; no dividend yield; and a risk free interest rate of 0.14%. The fair value of the derivative
liability was recorded as a discount to the debt of $400,000 and $57,552 of interest and financing fees. The discount has been
fully amortized to amortization of debt discount over the term of the Note and its conversion to shares of common stock. The unamortized
discount and the fair value of the derivative liability at November 30, 2012 was $nil. On November 14, 2012 the Company completed
payment of the principal amount of the Note through the conversion of the Note to an aggregate of 1,381,426 shares of the Company’s
common stock.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black; background-color: white">In September
2011, the Company entered into two Demand Promissory Notes (the “Notes”) in the aggregate amount of $270,000. The Notes
are due upon demand after November 14, 2011 ($200,000, the “September 14, 2011 Note”) and November 19, 2011 ($70,000,
the “September 19, 2011 Note”) and immediately, upon demand, where the Company is in default or non-compliance under
the respective note or default or non-compliance with other parties customarily including but not limited to, insolvency, bankruptcy
or judgements against the Company. The Notes bear interest at the rate of 2% per month calculated and compounded monthly and a
commitment arrangement and placement fee of $67,500 per month (less interest). The Notes requires that the first use of any financing
provided to the Company of greater than $200,000 be first used to retire the September 19 Note in whole or in part and greater
than $305,000 in the case of the September 14 Note. </font>On June 14 and 19, 2012 the Company entered into a Promissory Note Amending
Agreement with the holders of the Notes where by the note holders have agreed to extend the maturity of the September 14, 2011
Note to September 14, 2012 and the September 19, 2011 Note to September 19, 2012 and to settle outstanding commitment, arrangement
and placement fees of $554,825 in exchange for 200,000 shares of the Company’s common stock, and eliminate any future commitment,
arrangement and placement fees under these promissory notes. On September 14, 2012 and September 19, 2012 the Notes with a principal
amount of $270,000 matured without payment and are in default. Under the terms of the Notes as modified, in the event of non-payment
by the Company at maturity, the interest rate on the Notes increases to 5% per month and the Company is required to issue 57,500
and 20,000 shares of the Company’s common stock respectively in advance for each month of non-payment of the Notes. The fair
value of these penalty shares is included in the note principal at November 30, 2012.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On October 25, 2011, the Company issued a 6% convertible redeemable
secured note (the “6% Note”) for a principal amount of $100,000. The 6% Note is due and payable October 25, 2012 and
accrues interest on the outstanding principal balance at the rate of 6% per annum. The 6% Note is convertible at any time after
April 25, 2012, into shares of the Company's common stock at a conversion price that is equal to 70% of the lowest closing bid
price of the Company’s common stock as reported on the National Quotations Bureau Pink Sheets on which the Company’s
shares are traded, for any of the five trading days including the day upon which a Notice of Conversion is received by the Company.
The exercise price may be adjusted to a lower amount where within the three business days after the exercise the closing bid for
the Company’s common stock is 5% lower than the price set out in the notice. At any time, the Company has the option to redeem
the 6% Note and pay to the note holder 150% of the unpaid principal amount of the 6% Note, in full. As part of the loan, the Company
issued to the note holder 333,333 transferable warrants to purchase one common share per warrant at $0.15 per share for a period
of three years. The fair value of the 333,333 warrants was $96,372. The fair value of the warrants was calculated using the Black-Scholes
option pricing model with the following assumptions: expected life of 3.0 years; volatility of 126.9%; no dividend yield; and a
risk free interest rate of 0.43%. The relative fair value of the warrants was $49,076 and was recorded as a discount to the debt.
The unamortized discount at November 30, 2012 was $nil. The 6% Note and accrued interest of $3,914 were fully paid by August 15,
2012 through the conversion of the 6% Note to an aggregate of 268,763 shares of the Company’s common stock.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On February 17, 2012, Celtic entered into a convertible debenture
agreement (“Convertible Debenture”) for an amount of $300,000 (Canadian, US$303,183). The Convertible Debenture has
a term of 6 months or the earlier of Celtic’s RTO on the Toronto Stock Exchange. The Convertible Debenture is secured against
the accounts of Celtic, including its accounts, chattel paper, books and records, equipment, instruments, intangibles, inventory,
money, proceeds, securities and undertakings and is guaranteed by Celtic and its subsidiaries. The interest rate is 10% accrued
daily, compound annually and paid at maturity date. The holder has the right to convert the principal amount outstanding into the
common shares of Celtic at the conversion price which is the lower of $0.20 per common share or 25% below the RTO price. As part
of the loan, the Company issued to the lender 1,000,000 common share purchase warrants with an exercise price per share equal to
the lower of $0.30 (Canadian) and the RTO price for a period of two years and 333,333 common share purchase warrants with an exercise
price per common share equal to $0.45 (Canadian) for a period of two years. The relative fair value of the 1,333,333 warrants and
the debt at February 17, 2012 was determined to be $120,246 and $182,937 respectively. The fair value of each warrant issued was
calculated using the Black-Scholes option pricing model with the following assumptions: expected life of 2.33 years; volatility
of 90.7%; no dividend yield; and a risk free interest rate of 1.12%. The aggregate relative fair value of the debt and warrant
of $303,183 has been amortized to amortization of debt discount over the life of the Convertible Debenture. The Convertible Debenture
matured August 17, 2012 without payment to the note holder. The Convertible Debenture is reflected in Liabilities from Discontinued
Operations on the balance sheet at February 29, 2012. As at November 30, 2012 the Convertible Debenture has been removed as a liability
with the disposition of the Company’s interest in Celtic (see Note 3, Discontinued Operations).</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On March 22, 2012 the Company issued a Convertible Promissory
Note to JMJ Financial (“JMJ”) in aggregate principal amount of $2,110,000 (the “JMJ Note”) advanced over
time. In consideration for issuing of the JMJ Note and the 2,500,000 warrants, JMJ provided the initial funding of $275,000 (total
of $356,000 through November 30, 2012). The JMJ Note bears interest at 10%, matures three years from the date of issuance, is secured
by 25% of the company’s investment property and ownership or other equity interests the Company holds in Focus Celtic Gold
Corporation, its wholly owned subsidiary, and is convertible into shares of the Company’s common stock, at JMJ’s option,
at a conversion price, equal to 80% of the average of the three lowest trade prices for the Company’s common stock during
the 20 trading days prior to the conversion. The Note was issued with a 10% original issue discount. The original issue discount
of $39,556 is being accreted to amortization of debt discount over the remaining term of the note. JMJ has agreed to restrict their
ability to convert the JMJ Note and receive shares of common stock such that the number of shares of common stock held by them
in the aggregate and their affiliates after such conversion or exercise does not exceed 4.99% of the then issued and outstanding
shares of the Company’s common stock. No interest or principal payments are required until the maturity date. The Note may
be prepaid at any time prior to Maturity Date at 150%. The 125,000 warrants issued to JMJ entitle JMJ to purchase up to 125,000
shares of the Company’s common stock at $4.00 per share, subject to adjustment maintain an aggregate exercise price of $500,000.
The 125,000 common share purchase warrants may in certain circumstances be exercised in whole or part in a cashless exercise equal
to the difference between the VWAP on the trading day immediately preceding the date on which the holder elects to exercise the
warrant and the exercise price of the warrant times the number of warrants so being exercised. The warrant exercise price may be
adjusted to a lesser amount than $4.00 where at any time while the warrant is outstanding and the Company sells or grants an option
to purchase or sell or grant any right to re-price, or issue and share of common stock or security convertible into the Company’s
common stock at an effective price less than the $4.00 exercise price, the exercise price shall be reduced to that lesser amount.
The warrant is non-transferrable. The Company has determined that the warrants and the convertible feature of the JMJ Note are
derivative liabilities with fair values of $418,531 and $804,777 respectively at March 22, 2012. The fair value of the derivative
liability was calculated using the Black-Scholes option pricing model with the following assumptions: expected life of 3.0 years;
volatility of 102.6%; no dividend yield; and a risk free interest rate of 0.56%. The fair value of the derivative liability was
recorded as a discount to the debt of $337,692 and $948,308 of interest and financing fees. The discount is being amortized to
amortization of debt discount over the term of the JMJ Note. The unamortized discount at November 30, 2012 was $260,502. At November
30, the fair value of the derivative liability on the warrants and conversion feature was determined to be $236,461 and $292,205
respectively. The fair value of the derivative liability at November 30, 2012 was determined using the Black-Scholes option pricing
model with the following assumptions: expected life of 2.3 years; volatility of 91.27%; no dividend yield; and a risk free interest
rate of 0.25%. The Company tests the fair value of this derivative liability at each reporting period and records any change in
the fair value of the derivative liability to the statement of operations. On June 13, 2012 with the Company’s failure to
file its Form 10-K for the year ended February 29, 2012, the Company entered into technical default on the JMJ Note.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On July 23, 2012 the Company issued a 6% Redeemable Convertible
Note (the “GEL Note”) to GEL Properties LLC. (“GEL”) in the amount of $100,000. The Company received net
proceeds of $ 94,485. The GEL Note is due and payable July 23, 2013 and accrues interest on the outstanding principal balance at
the rate of 6% per annum. The GEL Note is convertible at any time after January 23, 2013, into shares of the Company's common stock
at a conversion price that is equal to 70% of the lowest closing bid price of the Company’s common stock as reported on the
National Quotations Bureau Pink Sheets on which the Company’s shares are traded, for any of the five trading days including
the day upon which a notice of conversion is received by the Company. At any time, the Company has the option to redeem the GEL
Note and pay to the holder, 150% of the unpaid principal amount of the GEL Note, in full. As part of the loan, the Company issued
to the note holder 71,429 transferable warrants to purchase one common share per warrant at $1.40 per share for a period of three
years.<font style="color: black; background-color: white"> The fair value of the 71,429 warrants was $25,738. The fair value of
the warrants was calculated using the Black-Scholes option pricing model with the following assumptions: expected life of 3.0 years;
volatility of 91.32%; no dividend yield; and a risk free interest rate of 0.34%. The relative fair value of the warrants was $20,470
and was recorded as a discount to the debt. The unamortized discount at November 30, 2012 was $13,179. </font>The GEL Note has
been determined to have a derivative liability related to its conversion feature with a fair value of $104,954 at July 23, 2012.
The fair value of the derivative liability was determined using the Black-Scholes option pricing model with the following assumptions:
expected life of 1 year; volatility of 84.96%; no dividend yield; and a risk free interest rate of 0.14%. The fair value of the
derivative liability was recorded as a discount to the debt of $77,530 and $25,424 of interest and financing fees. The discount
is being amortized to amortization of debt discount over the term of the note. The unamortized discount and the fair value of the
derivative liability at November 30, 2012 was $51,695 and $77,968 respectively.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On July 19, 2012 the Company’s subsidiary Celtic, issued
a convertible debenture (the “Debenture”) to RYM Capital Corp (“RYM”) in the amount of $50,000 Canadian
dollars. The Debenture earns compound interest accruing annually at 10% per annum and is due the earlier of (i) 6 months from the
date of the Debenture; or (ii) the business day immediately preceding the closing of the reverse take-over between the Company’s
subsidiary Celtic, and Pacific Orient Capital, Inc. The Debenture is secured against the accounts of Celtic, including its accounts,
chattel paper, books and records, equipment, instruments, intangibles, inventory, money, proceeds, securities and undertakings
and is guaranteed by Celtic and its subsidiaries. RYM has the right to convert the principal amount outstanding into the common
shares of Celtic at the conversion price which is the lower of $0.20 (Canadian) per common share or 25% below the RTO price. As
part of the loan, the Company issued to the lender 222,222 common share purchase warrants with an exercise price per share equal
to the lower of $0.30 (Canadian) and the RTO price for a period of two years. The fair value of the 222,222 warrants and the debt
at July 19, 2012 was determined to be $40,809 and $30,050 respectively. The fair value of each warrant issued was calculated using
the Black-Scholes option pricing model with the following assumptions: expected life of 2.45 years; volatility of 89.11%; no dividend
yield; and a risk free interest rate of 0.31%. The relative fair value of the debt and warrants at July 19, 2012 of $50,531 was
recorded as a discount to the debt. The unamortized discount at October 5, 2012 was $28,875. The Debenture is reflected in liabilities
from discontinued operations on the balance sheet at February 29, 2012. As at November 30, 2012 the Debenture has been removed
as a liability with the disposition of the Company’s interest in Celtic (see Note 3, Discontinued Operations).</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On September 5, 2012, the Company issued an 8% convertible
promissory note (the “8% Note”) to Asher Enterprises, Inc. for a principal amount of $68,000. The Company received
net proceeds of $61,600. The 8% Note is due and payable June 7, 2013 and accrues interest on the outstanding principal balance
at the rate of 8% per annum. Any time after 180 days following the date of this note, the 8% Note is convertible into shares of
the Company's common stock at a conversion price that is equal to 58% of the average of the lowest three trading prices during
the ten trading days preceding the date of conversion. The exercise price may be adjusted to a lower amount where the Company grants
or sells shares or options or other convertible securities at a price that is lower than the then in effect conversion price. At
any time up and until 180 days from the date of the 8% Note, the Company has the option to redeem the 8% Note for payment to the
note holder of ranging from 115% to 140% of the unpaid principal amount of the 8% Note, in full. In event of default, the Company
is required to pay the note holder the greater of (i) 150% of the principal as well as interest and other amounts payable to the
note holder or (ii) parity value of the common shares that would be issuable upon conversion multiplied by the highest closing
price for the common stock during the period beginning on the date of the first occurrence of the default and ending one day prior
to the mandatory payment date. In the event of default interest on the 8% Note accrues at 22% per annum. The 8% Note is secured
with 170,000 of the Company’s common shares held in treasury. The 8% Note has been determined to have a derivative liability
related to its conversion feature with a fair value of $119,619 at September 5, 2012. The fair value of the derivative liability
was determined using the Black-Scholes option pricing model with the following assumptions: expected life of 0.75 years; volatility
of 82.48%; no dividend yield; and a risk free interest rate of 0.18%. The fair value of the derivative liability was recorded as
a discount to the debt of $68,000 and $51,619 of interest and financing fees. The discount is being amortized to amortization of
debt discount over the term of the note. The unamortized discount and the fair value of the derivative liability at November 30,
2012 was $49,435 and $64,383 respectively.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">On October 5, 2012, the <font style="background-color: white">Company
issued an 8% convertible promissory note (the “October 5 Note”) to Asher Enterprises, Inc. for a principal amount of
$37,500.</font></font>The Company received net proceeds of $33,125. <font style="color: black; background-color: white">The October
5 Note is due and payable July 17, 2013 and accrues interest on the outstanding principal balance at the rate of 8% per annum.
Any time after 180 days following the date of this note, the 8% Note is convertible into shares of the Company's common stock at
a conversion price that is equal to 58% of the average of the lowest three trading prices during the ten trading days preceding
the date of conversion. The exercise price may be adjusted to a lower amount where the Company grants or sells shares or options
or other convertible securities at a price that is lower than the then in effect conversion price. At any time up and until 180
days from the date of the October 5 Note, the Company has the option to redeem the October 5 Note for payment to the note holder
of ranging from 115% to 140% of the unpaid principal amount of the October 5 Note, in full. In event of default, the Company is
required to pay the note holder the greater of (i) 150% of the principal as well as interest and other amounts payable to the note
holder or</font> (ii) parity value of the common shares that would be issuable upon conversion multiplied by the highest closing
price for the common stock during the period beginning on the date of the first occurrence of the default and ending one day prior
to the mandatory payment date. In the event of default interest on the <font style="color: black; background-color: white">October
5</font> Note accrues at 22% per annum. The October 5 Note has been determined to have a derivative liability related to its conversion
feature with a fair value of $34,105 at October 5, 2012. The fair value of the derivative liability was determined using the Black-Scholes
option pricing model with the following assumptions: expected life of 0.75 years; volatility of 82.54%; no dividend yield; and
a risk free interest rate of 0.13%. The fair value of the derivative liability was recorded as a discount to the debt of $34,105
and no interest and financing fees. The discount has been fully amortized to amortization of debt discount over the term of the.
The unamortized discount and the fair value of the derivative liability at November 30, 2012 was $27,429 and $37,102 respectively.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">On November 30, 2012, the Company entered into a 6% convertible
promissory note with Circadian Group in the amount of $54,325 (Canadian) in settlement of amounts payable due Circadian Group (the
“Circadian Note”). The Circadian Note matures on May 31, 2013 and has a redemption premium of 110% of the principal
amount including 6% interest payable on the principal amount. The holder of the Circadian Note may convert the principal amount
and interest to shares of the Company’s common stock at any time at a conversion price equal to a 20% discount to the lowest
closing price during the five trading days immediately prior to conversion notice, as reported by nasdaq.com. The Company has determined
that the convertible feature of the Circadian Note is a derivative liability with fair value of $30,148 at November 30, 2012. The
fair value of the derivative liability was calculated using the Black-Scholes option pricing model with the following assumptions:
expected life of 0.5 years; volatility of 79.84%; no dividend yield; and a risk free interest rate of 0.13%. The fair value of
the derivative liability was recorded as a discount to the debt of $30,148 and will be amortized to amortization of debt discount
over the term of the Circadian Note. The redemption premium of $5,435 (Canadian) will be being amortized to amortization of debt
discount over the life of the Circadian Note.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 21.3pt"></td><td style="width: 7.05pt"><font style="font-size: 8pt">(a)</font></td><td><font style="font-size: 8pt">     Authorized
capital</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><font style="font-size: 8pt">The Company is authorized
to issue:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><font style="font-size: 8pt">100,000,000 shares
of Preferred stock, $0.00001 par value</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><font style="font-size: 8pt">50,000,000 shares
of Common stock, $0.00001 par value</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt">On November 29, 2012
a vote by stockholders holding shares of the Company’s voting stock approved the amendment of the Company’s articles
of incorporation to increase the authorized number of shares of stock from 350,000,000 to 1,100,000,000. Effective the January
14, 2013, the Company reduced its authorized common stock and its issued and outstanding common stock on a 20:1 reverse split,
reducing the authorized number of shares of common stock from 1,000,000,000 to 50,000,000. All per share amounts in these condensed
consolidated financial statements and Notes thereto have been adjusted to reflect the 20:1 reverse split to the Company’s
common stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt">On October 19, 2012,
the board of directors approved the designation of the Company’s Series A Preferred Stock consisting of 3,000,000 shares
and Series B Non-Voting 6% Convertible Preferred Stock consisting of 7,000,000 shares.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt">Series A Preferred
Stock:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt">Consists of Three
Million (3,000,000) shares of $.00001 par value. The Series A Preferred rank senior to the common stock and all other shares of
preferred stock that may be later authorized. Each outstanding share of Series A Preferred Stock shall have two hundred fifty
(250) votes on all matters submitted to the stockholders of the Company and shall vote with the common stock on all matters. The
shares of Series A Preferred shall (i) not have any liquidation preference; (ii) not accrue, earn, or participate in any dividends;
and (iii) shall be subject to redemption by the Corporation at a price of two cents ($.02) per share.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt">In addition to any
other rights provided by law, the Company shall not, without first obtaining the affirmative vote or written consent of the holders
of sixty percent (60%) of the outstanding shares of Series A Preferred, do any of the following:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 66pt"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font: 8pt Times New Roman, Times, Serif">take
any action which
would either alter,
change or affect
the rights, preferences,
privileges or restrictions
of the Series A Preferred
or increase the number
of shares of such
series authorized
hereby or designate
any other series
of Preferred Stock;</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 66pt"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font: 8pt Times New Roman, Times, Serif">increase
the size of any equity
incentive plan(s)
or arrangements;</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 66pt"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font: 8pt Times New Roman, Times, Serif">make
fundamental changes
to the business of
the Company;</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 66pt"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font: 8pt Times New Roman, Times, Serif">make
any changes to the
terms of the Series
A Preferred or to
the Company’s
Articles of Incorporation
or Bylaws, including
by designation of
any stock;</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 66pt"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font: 8pt Times New Roman, Times, Serif">create
any new class of
shares having preferences
over or being on
a parity with the
Series A Preferred
as to dividends or
assets, unless the
purpose of creation
of such class is,
and the proceeds
to be derived from
the sale and issuance
thereof are to be
used for, the retirement
of all Series A Preferred
then outstanding;</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 66pt"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font: 8pt Times New Roman, Times, Serif">make
any change in the
number of authorized
directors, currently
five (5); or</font></td></tr></table>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 66pt"></td><td style="width: 0.25in"><font style="font: 8pt Symbol">·</font></td><td><font style="font: 8pt Times New Roman, Times, Serif">repurchase
any of the Company's
common stock;</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt">Any shares of Series
A Preferred acquired by the Company by reason of redemption shall be returned to the status of undesignated and unissued shares
of preferred stock of the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt">Series B Non-Voting
6% Convertible Preferred Stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt">Consists of Seven Million
(7,000,000) shares of $0.00001 par value and a stated value of $100 per share. The Series B Non-Voting 6% Convertible Preferred
Stock is non-voting.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt">Conversion rights: Each
share of Series B Non-Voting 6% Convertible Preferred Stock is convertible at any time at the election of the holder into that
number of shares of the Company's common stock determined by dividing the stated value of such shares of preferred stock into
the conversion price. The conversion price is defined as twenty percent (20%) of the lowest closing bid price of the Company's
common stock during five (5) trading days immediately preceding a conversion date.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt">Dividend rights: Holders
share be entitled to receive cumulative dividends at a rate per share of 6% per annum, payable in arrears on June 30 and December
31 and on each conversion date in cash or at the Company's irrevocable option, shares of the Company's common stock. The number
of shares issuable is defined as 50% of the previous ten (10) day variable weighted average price of the Company's common stock,
with certain limitations. Dividends on the Series B Non-Voting 6% Convertible Preferred Stock shall accrue daily commencing on
the original issuance date and shall be deemed to accrue from such date whether or not earned or declared and whether or not there
are profits, surplus or other funds of the Company legally available for the payment of dividends.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt">Liquidation rights:
Upon any liquidation, dissolution or winding up of the Company, the holders shall be entitled to receive out of the assets an
amount equal to the stated value, plus any accrued and unpaid dividends before payment is made to the holders of junior securities
such as common stock or all other common stock equivalents of the Company other than those securities which are explicitly senior
or pari passu to Series B Non-Voting 6% Convertible Preferred Stock.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 20.15pt"><font style="font-size: 8pt">(b)   Share
issuances, returns and cancellations during the nine month periods ended November 30, 2012 and 2011:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt">During the nine month
period ended November 30, 2012, the Company issued 1,822,689 shares of its common stock for the exercise of conversions under
the Company’s convertible securities in the amount of $522,469, 250,000 shares of common stock for settlement of $40,000
of fees, 5,000 shares of common stock in settlement of a loan facility and 2,000 of its common stock as settlement for $554,826
of accrued fees on the Company’s September 14 and 19, 2012 promissory notes.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><font style="font-size: 8pt">The Company issued
1,000,000 shares of Series A Preferred Stock to each of the Company’s three directors (total 3,000,000 shares) at fair value
of $0.02 per share. Each share of Series A Preferred Stock has two hundred fifty (250) votes on all matters submitted to the stockholders
of the Company and votes with the Company’s common stock on all matters.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt">During the nine month
period ended November 30, 2011, the Company received and approved subscriptions for 220,538 units at $8.00 per unit for gross
proceeds of $1,764,300 less cash issue costs of $66,580 by way of private placement. Each unit consisted of one common share and
one-half non-transferable share purchase warrant that entitled the holder to purchase one additional common share at $10.00 per
share for a period of one year.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt">The net proceeds of
the financing of $1,679,720 was allocated on a relative fair value basis as $1,444,653 to common shares and $235,067 to warrants.
The fair value of each warrant issued was calculated using the Black-Scholes option pricing model with the following assumptions:
expected life of 1.0 to 1.25 years; volatility of 84 - 88%; no dividend yield; and a risk free interest rate of 0.18 – 0.23%.
In connection with this private placement, the Company's agents received a selling commission of $66,580 of the proceeds of the
units sold and 8,323 warrants to purchase an additional share of the Company’s stock for a period of one to three years
at $8.00 per share. The fair value of the 8,323 warrants was $41,002. The fair value of each warrant issued was calculated using
the Black-Scholes option pricing model with the following assumptions: expected life of 1.0 and 3.25 years; volatility of 84%
and 144% respectively; no dividend yield; and a risk free interest rate of 0.25% and 0.71% respectively.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 21.3pt"></td><td style="width: 7.05pt"><font style="font-size: 8pt">(c)</font></td><td><font style="font-size: 8pt">   Treasury stock</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">Pursuant to an agreement dated
August 24, 2012 with a former director of the Company, the Company acquired 170,000 shares of its common stock at an aggregate
purchase price of $129,200. The acquired 170,000 shares of the Company’s common stock have been recorded as treasury stock
using the cost method.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 8pt">(d)</font></td><td><font style="font-size: 8pt">Stock options</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">The Company has an incentive share
option plan (the "Plan") that it adopted February 7, 2011, that allows it to grant incentive stock options to its officers,
directors, employees and other persons associated with the Company. The Plan is intended to advance the best interests of the
Company by providing those persons who have a substantial responsibility for its management and growth with additional incentive
and by increasing their proprietary interest in the success of the Company, thereby encouraging them to maintain their relationships
with the Company. Further, the availability and offering of stock options and common stock under the Plan supports and increases
the Company's ability to attract and retain individuals of exceptional talent upon whom, in large measure, the sustained progress,
growth and profitability of the Company depends. The board of directors reserved 500,000 shares of common stock for issuance under
the Plan. As of the fiscal year end, February 29, 2011, the board of directors had granted options to purchase 320,000 shares
of common stock at $10 per share to 7 persons. Through the nine month period ended November 30, 2012 and 2011, no further grants
of options have been made under this plan.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font-size: 8pt">Expiry date</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Exercise price per
share</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Balance February 29,
2012</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Granted</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Forfeited</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Expired/<br /> Cancelled</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Balance<br /> November
30,<br /> 2012</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 22%"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt"> </font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt"> </font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt"> </font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt"> </font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt"> </font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt"> </font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt">February 24, 2016</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">10.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">320,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">320,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 2.5pt double; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">320,000</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 2.5pt; text-align: left; border-bottom: Black 2.5pt double"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 2.5pt; text-align: left; border-bottom: Black 2.5pt double"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 2.5pt; text-align: left; border-bottom: Black 2.5pt double"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt; text-align: right; border-bottom: Black 2.5pt double"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 2.5pt"><font style="font-size: 8pt"> </font></td>
<td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 2.5pt double; text-align: right"><font style="font-size: 8pt">320,000</font></td><td style="padding-bottom: 2.5pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">All 320,000 stock options granted
and were exercisable at November 30, 2012.  </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">As the Company does not have historical
experience to estimate the expected life of options, the Company used the project development life of its Huicicila concession
as its estimate. The $5.60 fair value of each stock option grant in the year ended February 28, 2011 was calculated using the
Black-Scholes option pricing model with the following weighted average assumptions: expected life of 2.5 years; volatility of
141%; no dividend yield; and a risk free interest rate of 0.95%.  In the nine month period ended November 30, 2012 the Company
recorded aggregate stock-based compensation expense of $nil (2011 - $1,359,150) for options based on a twelve month service period
from January 1, 2011.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 8pt">(e)</font></td><td><font style="font-size: 8pt">2012 Stock & Stock Option
Compensation Plan</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">On October 15, 2012 the Company
adopted an incentive share option plan referred to as the 2012 Stock & Stock Option Compensation Plan (the "2012 Plan"),
for employees, directors and other persons associated with the Company, and is intended to advance the best interests of the Company
by providing those persons who have a substantial responsibility for its management and growth with additional incentive and by
increasing their proprietary interest in the success of the Company, thereby encouraging them to maintain their relationships
with the Company. The board of directors or a committee of the board of directors are responsible for administration of the 2012
Plan and have full power to grant stock options and common stock, construe and interpret the 2012 Plan, establish rules and regulations
and perform all other acts, including the delegation of administrative responsibilities, it believes reasonable and proper. The
Committee may cancel any stock options awarded under the 2012 Plan if an optionee conducts himself in a manner which the Committee
determines to be inimical to the best interest of the Company.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">The board of directors reserved
2,500,000 shares of common stock for issuance under the 2012 Plan. As of November 30, 2012, the board of directors had granted
250,000 shares of common stock to one consultant under the 2012 Plan.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0.25in"></td><td style="width: 0.25in"><font style="font-size: 8pt">(f)</font></td><td><font style="font-size: 8pt">Share purchase warrants</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">The continuity of share purchase
warrants is as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font-size: 8pt">Expiry date</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Exercise price per
share</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Balance February 29,
2012</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Issued</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Exercised</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Expired</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Balance<br /> November
30,<br /> 2012</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="text-align: left"><font style="font-size: 8pt">Class A</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 22%"><font style="font-size: 8pt">March 1, 2012</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">8.00</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">3,323</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">3,323</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt">December 19, 2012</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">3.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">6,667</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">6,667</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td><font style="font-size: 8pt">June 12, 2014</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">8.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">5,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">5,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt">October 14, 2016</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">10.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">7,500</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">7,500</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td style="text-align: left"><font style="font-size: 8pt">Class B</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt">April 24, 2012</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">10.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">5,921</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">5,921</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt">April 24, 2012</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">10.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">72,331</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">72,331</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt">May 24, 2012</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">10.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3,813</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">3,813</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt">July 20, 2012</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">10.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">34,125</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">34,125</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt">December 15, 2013</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">5.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">33,333</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">33,333</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td style="text-align: left"><font style="font-size: 8pt">Promissory Note Warrants</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt">October 25, 2014</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">3.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">33,333</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">33,333</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td><font style="font-size: 8pt">March 22, 2015</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">4.00</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">125,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">125,000</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
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<td style="padding-bottom: 1pt"><font style="font-size: 8pt">July 23, 2015</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt">$</font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">1.40</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">71,429</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">71,429</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="text-align: left; padding-bottom: 1pt"><font style="font-size: 8pt">Total Warrants Outstanding</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">205,345</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">196,429</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">119,512</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">282,262</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 5pt; text-indent: -5pt"><font style="font-size: 8pt">Weighted average exercise price</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">7.80</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">1.80</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif"> 1.80</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 5pt; text-indent: -5pt"><font style="font-size: 8pt">Average remaining contractual term (years)</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">2.19</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">The Company has issued the following
classes of warrants as set out below:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" border="0" style="width: 100%; margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: top">
<td style="width: 5%"><font style="font-size: 8pt"> </font></td>
<td style="padding-left: 10pt; text-indent: -10pt; width: 15%"><font style="font-size: 8pt">Class A warrant</font></td>
<td style="padding-left: 10pt; text-indent: -10pt; width: 80%"><font style="font-size: 8pt">Are non-transferrable, exercisable
for cash and have no acceleration of the expiry date.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 22pt"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" border="0" style="width: 100%; margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: top">
<td style="width: 5%"><font style="font-size: 8pt"> </font></td>
<td style="padding-left: 10pt; text-indent: -10pt; width: 15%"><font style="font-size: 8pt">Class B warrant</font></td>
<td style="width: 80%"><font style="font-size: 8pt">Are transferrable, each warrant entitles the holder to purchase one additional
common share at the exercise price per share set out in the table above, subject to acceleration provisions and with a cashless
exercise provision based upon the 20 day volume weighted average price per share at closing day (VWAP) the day prior to exercise.
Holders of warrants electing cashless exercise will receive that number of shares equal to the 20 day VWAP minus the exercise
price divided by the 20 day VWAP minus the exercise price divided by the 20 day VWAP multiplied by the number of warrants
exercised.</font></td></tr>
</table>
<p style="margin-top: 0; margin-bottom: 0"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.3pt; text-indent: -85.05pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.3pt; text-indent: -85.05pt"><font style="font-size: 8pt">Promissory
Note</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.3pt; text-indent: -85.05pt"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.3pt; text-indent: -85.05pt"><font style="font-size: 8pt">Warrants</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.3pt; text-indent: -85.05pt"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" border="0" style="width: 100%; margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: top">
<td style="width: 5%"><font style="font-size: 8pt"> </font></td>
<td style="width: 15%"><font style="font-size: 8pt">October 24, 2014 & July 19, 2015</font></td>
<td style="width: 80%"><font style="font-size: 8pt">Are transferrable and entitles the holder to purchase one additional common
share for a period of three years. In lieu of the cash payment the holder has the right to convert this warrant in whole or
in part without payment of any kind into that number of shares of common stock of the Company equal to the quotient obtained
by dividing the aggregate of the closing price of the Company’s common stock on the day immediately preceding the conversion
less the aggregate purchase price of the shares being exercised divided by the closing price of the Company’s common
stock on the day immediately preceding the conversion.</font></td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: top">
<td><font style="font-size: 8pt"> </font></td>
<td><font style="font-size: 8pt">March 22, 2012</font></td>
<td><font style="font-size: 8pt">Transferable with the approval of the Company. At any time after September 22, 2012, in lieu
of the cash payment the holder has the right to convert this warrant in whole or in part without payment of any kind into
that number of shares of common stock of the Company equal to the quotient obtained by dividing the aggregate of the VWAP
price of the Company’s common stock on the day immediately preceding the conversion less the aggregate purchase price
of the shares being exercised divided by the VWAP of the Company’s common stock on the day immediately preceding the
conversion. The March 22, 2015 warrants provide the warrant holder with down round protection where the Company issues any
shares or grants and warrant or convertible security or re-prices a security at less than the effective exercise price of
the March 22, 2015 warrant at that time, then the effective exercise price shall be lowered to such lesser amount. As at November
30, 2012, the Company has estimated the re-priced warrant from 125,000 common shares at $4.00 per share to 4,643,388 common
shares at $0.1076 per share.</font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-indent: -85.05pt"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">During the nine month period ended
November 30, 2012, the Company approved unit subscriptions and warrant commissions for an aggregate of nil (2011- 8,332) Class
A warrants and nil (2011 – 110,269) Class B warrants as part of a private placement of units.  In addition the Company
approved an additional 1964,429 (2011 – 333,333) warrants as part of promissory note financing (see Note 7).</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><font style="font-size: 8pt">(g) Class
A Options</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">The continuity of Class Options
is as follows:</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<tr style="vertical-align: bottom">
<td style="border-bottom: Black 1pt solid"><font style="font-size: 8pt">Expiry date</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Exercise price per
share</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Balance February 29,
2012</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Issued</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Exercised</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Expired</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td colspan="2" style="text-align: center; border-bottom: Black 1pt solid"><font style="font-size: 8pt">Balance<br /> November
30 ,<br /> 2012</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="width: 22%"><font style="font-size: 8pt">December 31, 2012</font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt">$</font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">9.80</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%; color: black"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; color: black; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; color: black; text-align: right"><font style="font-size: 8pt">1,056,055</font></td><td style="width: 1%; color: black; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; text-align: right"><font style="font-size: 8pt">–</font></td><td style="width: 1%; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 2%; color: black"><font style="font-size: 8pt"> </font></td>
<td style="width: 1%; color: black; text-align: left"><font style="font-size: 8pt"> </font></td><td style="width: 9%; color: black; text-align: right"><font style="font-size: 8pt">1,056,055</font></td><td style="width: 1%; color: black; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 5pt; text-indent: -5pt"><font style="font-size: 8pt">Total Class A Options Outstanding</font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="color: black; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; color: black; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; color: black; text-align: right"><font style="font-size: 8pt">1,056,055</font></td><td style="padding-bottom: 1pt; color: black; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; text-align: right"><font style="font-size: 8pt">–</font></td><td style="padding-bottom: 1pt; text-align: left"><font style="font-size: 8pt"> </font></td><td style="color: black; padding-bottom: 1pt"><font style="font-size: 8pt"> </font></td>
<td style="border-bottom: Black 1pt solid; color: black; text-align: left"><font style="font-size: 8pt"> </font></td><td style="border-bottom: Black 1pt solid; color: black; text-align: right"><font style="font-size: 8pt">1,056,055</font></td><td style="padding-bottom: 1pt; color: black; text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: rgb(238,238,238)">
<td style="padding-left: 5pt; text-indent: -5pt"><font style="font-size: 8pt">Weighted average exercise price</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">9.80</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font-size: 8pt">–</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt">$</font></td><td style="text-align: right"><font style="font: 8pt Times New Roman, Times, Serif">  9.80</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
<tr style="vertical-align: bottom; background-color: White">
<td style="padding-left: 5pt; text-indent: -5pt"><font style="font-size: 8pt">Average remaining contractual term (years)</font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt"> </font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td><td><font style="font-size: 8pt"> </font></td>
<td style="text-align: left"><font style="font-size: 8pt"> </font></td><td style="text-align: right"><font style="font-size: 8pt">0.08</font></td><td style="text-align: left"><font style="font-size: 8pt"> </font></td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt">Each Class A Option entitles the
holder to purchase one additional common share at $9.80 per share through December 31, 2012. Holders of Class A Options may elect
to exercise Class A Options by means of common cashless exercise provision based upon the 20 day volume weighted average price
(VWAP) prior to exercise. Holders of Class A Options electing cashless exercise will receive that number of shares equal to (the
20 day VWAP minus $9.80) divided by the 20 day VWAP multiplied by the number of Options held.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><font style="font-size: 8pt; color: black">During the year
ended February 29, 2012, the Company approved the issuance of 1,056,055 Class A Options in exchange for 64,987,982 Metallum options
which provided the Company with the option to acquire an additional 64,987,982 common shares of Metallum for £0.10
per share through December 31, 2012. The Company’s options to acquire Metallum common shares were transferred to the acquirer
of Celtic on October 5, 2012 (see Note 3 – Discontinued Operations).</font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(a)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">On November 10, 2010, the Company signed a definitive agreement to acquire Fairfields Gold S.A. de CV.  Fairfields owns an option to acquire 100% of the Huicicila gold project in Nayarit Mexico.  Under the terms of the definitive agreement, Fairfields selling stockholders have the opportunity to receive additional shares based on performance as per the following schedule:</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 32%; line-height: 115%; font-weight: bold; text-decoration: underline">Resource Estimate Date</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 35%; line-height: 115%; font-weight: bold; text-decoration: underline">Indicated Reserves</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 30%; line-height: 115%; font-weight: bold; text-decoration: underline">Payment Obligation</td></tr>
<tr style="background-color: #EEEEEE">
<td style="vertical-align: top; line-height: 115%">18 months after Closing Date</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%">475,000 oz Au (equivalent)</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="line-height: 115%">$1,250,000</td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; line-height: 115%">24 months after Closing Date</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%">750,000 oz Au (equivalent)</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="line-height: 115%">$1,250,000</td></tr>
<tr style="background-color: #EEEEEE">
<td style="vertical-align: top; line-height: 115%">36 months after Closing Date</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%">1,025,000 oz Au (equivalent)</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="line-height: 115%">$1,250,000</td></tr>
<tr style="background-color: white">
<td style="vertical-align: top; line-height: 115%">48 months after Closing Date</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="vertical-align: top; line-height: 115%">1,300,000 oz Au (equivalent)</td>
<td style="vertical-align: top; line-height: 115%"> </td>
<td style="line-height: 115%">$1,250,000</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt">Any future payments would be made in shares based
on the 20 day average price of the Company’s common stock prior to the required payment date.  </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt">In addition, Fairfields shareholders received
an option to acquire up to 25% of Focus Gold Mexico Corporation, a wholly owned subsidiary of the Company, created to acquire Fairfields.  The
option price payable upon the exercise of the option shall be 25% of the sum of (i) $5,000,000, (ii) the dollar value of all payments
made in respect of the deferred payments outlined above as at the date of exercise of the option, and (iii) the dollar value of
any shareholders’ equity contributed into Fairfields after December 31, 2010 until the date of exercise of the option. The
option may only be exercised for cash.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; line-height: 115%">(b)</td>
<td style="line-height: 115%">Option on Huicicila mining concession - Mexico</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt">On May 19, 2010, prior to its acquisition by the
Company, Fairfields, entered into an exploration, exploitation and purchase option agreement with Ramón Farías García,
a Mexico City geologist for the mining lots denominated “CILA”, “CILA 1”, “CILA 2”, “CILA
3” “and CILA 5”, located in Compostela, Nayarit Mexico under the following terms:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">·</td>
<td style="line-height: 115%">US$ 100,000 plus applicable VAT, paid on May 24, 2010 (paid).</td></tr>
</table>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">·</td>
<td style="line-height: 115%">US$ 1,200,000 plus applicable VAT, on six semester payment of US$ 200,000 each one, payable on every August and February month from August 17, 2011 (paid) to February 17, 2114.</td></tr>
</table>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">·</td>
<td style="line-height: 115%">The issue to the optionee that number of shares of common stock of Fairfields at the end of the option agreement that is 3% of its issued and outstanding capital at that time.</td></tr>
</table>
<p style="font: 11pt/normal Calibri, Helvetica, Sans-Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; line-height: 115%">·</td>
<td style="line-height: 115%">A Net Smelter Return Royalty (“NSR”) calculated at a rate of the 2.5% above the concentrate sales, payable every quarter over the life of the mines.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt">This option agreement has an initial maturity
of 3 years and 6 months from May 19, 2010. The Company has recorded the fair value of the $1,200,000 of payments under this option
in these condensed consolidated financial statements as the discounted value of the cash payments using a rate based on the prevailing
market rates of interest available to the Company (the average of interest rates used was estimated to be 11.0%) and $757,361 at
November 30, 2012 (after payment of $200,000 in each of August 2011 and February 2012) and $883,135 at November 30, 2011. The carrying
amounts of option payment liabilities owing approximates their fair values. The interest is accrued over the estimated payment
period of the option payments. The aggregate amount of interest accrued from acquisition through November 30, 2012 was $150,494
(2011 – $76,268).</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt">On August 17, 2012, the Company failed to make
payment on its <font style="color: black">Option on Huicicila mining concession – Mexico in the amount of $200,000 and is
in breach of its obligations under this Option. </font>The Company has not received<font style="color: black"> notice of default
</font>from the optionor and is working with the optionor to address this outstanding option payment.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; line-height: 115%">(c)</td>
<td style="line-height: 115%">Legal contingency</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt">The Company was named as
a defendant in an action filed on March 12, 2012 in the United States District Court, Southern District of New York. Also named
in this action was the Company’s wholly owned subsidiary Fairfields and certain of its directors and officers. The plaintiff
alleges that the defendants engaged the plaintiff as a finder in connection with financing for or the sale of Fairfields and was
entitled to a finder’s fee of 10% of monies raised or the value of the deal. The plaintiff alleges that he completed his
obligation and has not been paid for his services. Subsequent to November 30, 2012 the Company has settled this action. See note
11(d).</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">a)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Commencing August 27, 2010, the Company entered into agreements with the former president and CEO of the Company to provide services in exchange for $15,000 per month through December 31, 2010 and $21,000 CDN per month during the year ended December 31, 2011 (informally extended month to month in 2012 through June 30, 2012 and thereafter at the rate of $10,000 per month CDN by the Company’s subsidiary until August 28, 2012). During the nine month period ended November 30, 2012, the Company paid $104,063 (2011 - $191,838) as compensation for such management services.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">b)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Effective August 28, 2012 the Company has agreed to pay its current CEO the amount of $10,000 per month. During the nine month period ended November 30, 2012, the Company paid $30,000 (2011 - $nil) as compensation for such management services.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">c)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Effective January 1, 2011, the Company entered into an agreement
with the former director of exploration of the Company to provide services in exchange for $12,000 per month through December
31, 2011(informally extended month to month in 2012 and terminated March, 2012). During the nine month period ended November
30, 2012, the Company recorded $nil (2011 - $108,000) as compensation for such management services.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">d)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Effective January 1, 2011, the Company has paid fees to directors and management of its Mexican subsidiary Fairfields, to provide services related to developing Fairfields mineral properties as well as management services in exchange for a fee of 214,284 pesos each month ($16,532 monthly at the average rates of exchange during the nine month period ended November 30, 2012). During the nine month period ended November 30, 2012, the Company recorded $297,586 (2011 - $312,466) as compensation for such management services.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">e)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">During the nine month period ended November 30, 2012 the Company paid $nil (2011 - $13,500) to a director for compensation for serving as corporate secretary. A law firm of which a director is a partner was payable fees of $52,097 (2011 - $90,000) for the nine month period ended November 30, 2012 during the term he served as a director.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">f)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">During the nine month period ended November 30, 2012, the Company recorded nil (2011 - $5,250 ) as compensation to a company controlled by a former director of the Company for exploration services provided pursuant to a consulting agreement with the Company.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">g)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Effective October 25, 2011 through October 5, 2012 and included in
the loss from discontinued operations for the nine month period ended November 30, 2012, the Company has paid fees to
directors and officers of its UK subsidiary Metallum, to provide services related to developing Metallum's mineral properties
as well as management services in exchange for a fee of £5,000 each month ($7,916 monthly at the average rates of
exchange during the period from March 1, through October 5, 2012. During the nine month period ended November 30, 2012, the
Company recorded $57,520 (2011 - $nil) in discontinued operations as compensation for such management services.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 35.45pt; text-indent: 0.55pt"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 24px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">h)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Included in accounts payable and accrued liabilities – related at November 30, 2012 is $289,363 (2011 - $300,162) payable to the firms and persons referred to in this Note 10 and persons or firms related with these persons and firms.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0.55pt"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 0.25in"><font style="font-size: 8pt">a)</font></td><td><font style="font-size: 8pt">The Company has issued 860,000 shares
of its common stock upon exercise of convertible provisions of notes
payable in settlement of $39,842 of the principal amount of such notes
payable. In addition, the Company has issued an additional 160,000
shares of its common stock for penalties related to non-payment of
notes with a principal amount of $270,000.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0.55pt"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 0.25in"><font style="font-size: 8pt">b)</font></td><td><font style="font-size: 8pt">On September 13, 2012, the Company’s
board of directors approved a plan to implement a 20:1 reverse split
of the Company’s common stock by decreasing the number of authorized
shares of common stock from 1,000,000,000 to 50,000,000 and correspondingly
decreasing the number of issued and outstanding shares of the common
stock held by each stockholder of record at the effective date. The
effective date of the change (20:1 reverse split) was January 14, 2013
and this change has been given effect in these condensed consolidated
financial statements for the nine month period ended November 30, 2012.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0.55pt"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 0.25in"><font style="font-size: 8pt">c)</font></td><td><font style="font-size: 8pt">On December 19, 2012 and December
31, 2012, respectively, warrants to acquire 6,667 common shares of
the Company at $3.00 per share and options to acquire 1,056,055 common
shares of the Company at $9.80 per share expired unexercised.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0.55pt"><font style="font-size: 8pt"> </font></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 0.25in"><font style="font-size: 8pt">d)</font></td><td><font style="font-size: 8pt">On December 20, 2012 the Company entered
into a settlement agreement and convertible promissory note for $50,000
with a redemption premium of 10% due September 30, 2013 in respect
of the settlement of a legal contingency set-out in Note 9(c).</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="font-size: 8pt"> </font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0.55pt"></p>
<table cellpadding="0" cellspacing="0" style="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><tr style="vertical-align: top">
<td style="width: 0"></td><td style="width: 0.25in"><font style="font-size: 8pt">e)</font></td><td><font style="font-size: 8pt">On January 16, 2013, the Company issued
an 8% convertible promissory note (the "January 8% Note") for a principal
amount of $42,500. The Company will receive net proceeds of $38,300.
The January 8% Note is due and payable September 18, 2013 and accrues
interest on the outstanding principal balance at the rate of 8% per
annum. Any time after 180 days following the date of this note, the
January 8% Note is convertible into shares of the Company's common
stock at a conversion price that is equal to 58% of the average of
the lowest three trading prices during the ten trading days preceding
the date of conversion. The exercise price may be adjusted to a lower
amount where the Company grants or sells shares or options or other
convertible securities at a price that is lower than the then in effect
conversion price.</font></td></tr></table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; background-color: white"><font style="font-size: 8pt"> </font></p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(a)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Mineral Properties, Leases and Exploration and Development Costs</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">The Company accounts for mineral
properties in accordance with ASC 930: <i>Extractive Activities-Mining</i>. Costs of acquiring mineral properties and
leases are capitalized by project area upon purchase of the associated claims </font>(see Note 5)<font style="color: black">.Mineral
properties are periodically assessed for impairment of value and any diminution in value.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company accounts for mineral exploration and development
costs in accordance with ASC 932: <i>Extractive Activities</i>.  All exploration expenditures are expensed as incurred,
previously capitalized costs are expensed in the</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">period the property is abandoned.  Expenditures to develop
new mines, to define further mineralization in existing ore bodies, and to expand the capacity of operating mines, are capitalized
and amortized on units of production basis over proven and probable reserves.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><br />
Any option payments received by the Company from third parties or tax credits refunded to the Company are credited to the capitalized
cost of the mineral property or to exploration costs as applicable. If payments received exceed the capitalized cost of the mineral
property or the exploration costs incurred, the excess is recognized as income in the year received.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The amounts shown for mineral properties do not necessarily
represent present or future values. Their recoverability is dependent upon the discovery of economically recoverable reserves,
the ability of the Company to obtain the necessary financing to complete the development, and future profitable production or proceeds
from the disposition thereof.</p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(b)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Derivative instruments</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Derivative instruments consist of common stock warrants and
certain instruments embedded in certain notes payable and related agreements. These financial instruments are recorded in the balance
sheets at fair value as liabilities. Changes in fair value are recognized in earnings in the period of change.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(c)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Impairment of long-lived assets</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company reviews and evaluates its long-lived assets for
impairment at each balance sheet date and documents such impairment testing. The tests include an evaluation of the assets and
events or changes in circumstances that would indicate that the related carrying amounts may not be recoverable. Mineral properties
in the exploration stage are monitored for impairment based on factors such as the Company's continued right to explore the area,
exploration reports, assays, technical reports, drill results and the Company's continued plans to fund exploration programs on
the property, whether sufficient work has been performed to indicate that the carrying amount of the mineral property cost carried
forward as an asset will not be fully recovered, even though a viable mine has been discovered.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The tests for long-lived assets in the exploration, development
or producing stage that would have a value beyond proven and probable reserves would be monitored for impairment based on factors
such as current market value of the mineral property and results of exploration, future asset utilization, business climate, mineral
prices and future undiscounted cash flows expected to result from the use of the related assets. Recoverability of assets to be
held and used is measured by a comparison of the carrying amount of an asset to the estimated future net undiscounted cash flows
expected to be generated by the asset, including evaluating its reserves beyond proven and probable amounts.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company's policy is to record an impairment loss in the
period when it is determined that the carrying amount of the asset may not be recoverable either by impairment or by abandonment
of the property. The impairment loss is calculated as the amount by which the carrying amount of the assets exceeds its fair value.
While the Company incurred losses from operations, these losses have not been in excess of planned expenditures on the specific
mineral properties in order to ultimately realize their value.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">During the nine months ended November 30, 2012, the Company
recorded an impairment charge on its Metallum properties and Watabeag & Russell claims (Notes 3 and 5(b)).</p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(d)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Stock-based compensation</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company accounts for stock based compensation to employees
as required by ASC718: <i>Compensation-Stock Compensation </i>and stock based compensation to nonemployees as required by
ASC505-50: <i>Equity-Based Payments to Non-Employees</i>.  Options and warrants are valued using the Black-Scholes pricing
model (See Note 7). The offset to the recorded stock based compensation cost is to additional paid-in capital. Consideration received
on the exercise of stock options is recorded as share capital and additional paid-in capital and the related additional paid-in
capital is transferred to share capital.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(f)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Recent accounting pronouncements</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In May 2011, the FASB issued Accounting Standards Update No.
2011-04 (ASU No. 2011-04) “Fair Value Measurement” (Topic 820): Amendments to Achieve Common Fair Value Measurement
and Disclosure Requirements in U.S. GAAP and IFRSs. As a result of the new guidance, U.S. GAAP and the IFRSs have the same definition
and meaning of fair value and the same substantive disclosure requirements about fair value measurements (with minor differences
in wording and style). ASU No. 2011-04 amends Topic 820 in two ways. Specifically, some of the amendments clarify how to apply
the existing fair value measurement and disclosure requirements, while some of the amendments change a particular principle or
requirement for measuring fair value or disclosing information about fair value measurements. ASU No. 2011-04 and IFRS 13 do not
extend the use of fair value accounting, but rather provide guidance on how it should be applied where its use is already required
or permitted by other standards within U.S. GAAP or the IFRS. ASU No. 2011-04 supersedes much of the guidance in ASC Topic 820,
but also clarifies existing guidance and changes certain wording in order to align ASC Topic 820 with IFRS 13. IFRS 13 provides,
for the first time, a precise definition of fair value and a single source of fair value measurement requirements, disclosure requirements,
and related guidance for use across the IFRSs. The Company’s adoption of this policy did not have a material effect on the
Company’s consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In June 2011, the FASB issued Accounting Standards Update
No 2011-05 (ASU No 2011-05), <font style="color: black">“</font>Comprehensive Income (Topic 220): Presentation of Comprehensive
Income”. ASU 2011-05 eliminates the option that permits the presentation of other comprehensive income in the statement of
changes in equity and requires presenting components of net income and comprehensive income in either a one-statement approach
with totals for both net income and comprehensive income, or a two-statement approach where a statement presenting the components
of net income and total net income must be immediately followed by a financial statement that presents the components of other
comprehensive income, a total for other comprehensive income, and a total for comprehensive income. The guidance provided in ASU
No. 2011-05 is effective for fiscal years, and interim periods within those years, beginning after December 15, 2011 and should
be applied retrospectively. The adoption of this ASU did not have a material impact on our consolidated financial statements.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In September 2011, the FASB issued ASU No. 2011-08, which
updates the guidance in ASC Topic 350,<font style="color: black"> “</font>Intangibles – Goodwill& Other”
(ASU-2011-08). The amendments in ASU 2011-08 permit an entity to first assess qualitative factors to determine whether it is more
likely than not that the fair value of a reporting unit is less than the carrying amount as a basis for determining whether it
is necessary to perform the two-step goodwill impairment test described in ASC Topic 350. The more-likely-than-not threshold is
defined as having a likelihood of more than 50 percent. If, after assessing the totality of events or circumstances, an entity
determines that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing
the two-step impairment test is unnecessary. The amendments in ASU 2011-08 include examples of events and circumstances that an
entity should consider in evaluating whether it is more likely than not that the fair value of a reporting unit is less than its
carrying amount, however the examples are not intended to be all-inclusive and an entity my identify other relevant events and
circumstances to consider in making the determination. The examples in this ASU 2011-08 supersede the previous examples under ASC
Topic 350 of events and circumstances an entity should consider in determining whether it should test for impairment between annual
tests, and also supersede the examples of events and circumstances that an entity having a reporting unit with a zero or negative
should consider in determining whether to perform the second step of the impairment test. Under the amendments in ASU 2011-08,
an entity is no longer permitted to carry forward its detailed calculation of a reporting unit's fair value from a prior year as
previously permitted under ASC Topic 350. ASU 2011-08 is effective for annual and interim goodwill impairment tests performed for
fiscal years beginning after December 15, 2011. The adoption of ASU 2011-08 did not expected to have a material impact on the Company's
financial position or results of operations.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In December 2011, the FASB issued ASU No. 2011- 12, “Comprehensive
Income – Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items Out of Accumulated
Other Comprehensive Income in Accounting Standards Update No. 2011-05” (“ASU 2011-12”). ASU 2011-12 defers changes
in Update 2011-05 that relate to the presentation of reclassification adjustments. ASU 2011-12 is effective for fiscal years, and
interim periods within those years, beginning after December 15, 2011 (November 30, 2012 for the Company). The adoption of ASU
2011-12 did not have a material impact on our results of operations, financial condition, or cash flows.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company has implemented all new accounting pronouncements
that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed,
and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a
material impact on its financial position or results of operations.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(g)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Going concern</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">The Company's financial statements
are prepared using the accrual method of accounting in accordance with accounting principles generally accepted in the United States
of America, and have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of
liabilities in the normal course of business. The Company incurred a net </font>loss of $5,393,656 during<font style="color: black">
the nine month period ended November 30, 2012, and has an accumulated deficit </font>of $11,947,800<font style="color: black">
since entry into the exploration stage.</font> Additionally, the Company is in default of various notes with principal amounts
aggregating $765,556.<font style="color: black"> The Company changed its principal business to the development and exploitation
of mineral properties in October 2010, but has not yet established an ongoing source of revenues sufficient to cover its operating
costs and to allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on
the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain
adequate capital, it could be forced to cease development of operations.</font></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">In order to continue as a going concern, develop a reliable
source of revenues, and achieve a profitable level of operations the Company will need, among other things, additional capital
resources. Management’s plans to continue as a going concern include raising additional capital through sales of common stock
and or a debt financing. However, management cannot provide any assurances that the Company will be successful in accomplishing
any of its plans.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The ability of the Company to continue as a going concern
is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other
sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that
might be necessary if the Company is unable to continue as a going concern. </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(h)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Fair value measurements.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The FASB’s Accounting Standards Codification defines
fair value as the amount that would be received for selling an asset or paid to transfer a liability in an orderly transaction
between market participants and requires that assets and liabilities carried at fair value are classified and disclosed in the
following three categories:</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 92.15pt; text-indent: -35.4pt">Level 1 – Quoted prices
for identical instruments in active markets.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt">Level 2 – Quoted
prices for similar instruments in active or inactive markets and valuations derived from models where all significant inputs are
observable in active markets.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt">Level 3 – Valuations
derived from valuation techniques in which one or more significant inputs are unobservable in any market.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0 0 0 99.25pt; text-indent: -42.55pt"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">Given the conditions surrounding
the trading of the Company’s equity securities, the Company values its derivative instruments related to embedded conversion
features and warrants from the issuance of convertible debentures in accordance with the Level 3 guidelines. For the nine months
period ended November 30, 2012, the following table reconciles the beginning and ending balances for financial instruments that
are recognized at fair value in these condensed consolidated financial statements. </font>The fair value of warrants and embedded
conversion features that have exercise reset features are estimated using an adjusted Black-Scholes model based on the Company’s
estimation of the likelihood of the occurrence of a reset.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance at February 29, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">New Issuances</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Changes in Fair Values</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance at November 30, 2012</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5.4pt; line-height: 115%">Level 3 –</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 5.4pt; line-height: 115%">Derivative liabilities from:</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 32%; padding-left: 5.4pt; line-height: 115%">Conversion features</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">1,613,847</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">(1,112,041</td>
<td style="width: 1%; line-height: 115%">)</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">501,806</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 5.4pt; line-height: 115%">Warrants</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">418,531</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(182,070</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">236,461</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5.4pt; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">2,032,378</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(1,294,111</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">738,267</td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Changes in the unobservable input values would likely cause
material changes in the fair value of the Company’s Level 3 financial instruments. The significant unobservable input used
in the fair value measurement is the estimation of the likelihood of the occurrence of a change to the contractual terms of the
financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(i)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Reclassification.</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">Certain amounts in the balance sheet of February 29, 2012
and statement of operations for the three and nine months ended November 30, 2011 have been reclassified to conform with the current
year’s presentation.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">All references to common shares of the Company have been adjusted
to give effect to the implementation of a 20:1 reverse split of the Company’s authorized and issued common stock which was
effected in the subsequent events period on January 14, 2013.</p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%; text-align: center"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance at February 29, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">New Issuances</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Changes in Fair Values</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance at November 30, 2012</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5.4pt; line-height: 115%">Level 3 –</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 5.4pt; line-height: 115%">Derivative liabilities from:</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 32%; padding-left: 5.4pt; line-height: 115%">Conversion features</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">1,613,847</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">(1,112,041</td>
<td style="width: 1%; line-height: 115%">)</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">501,806</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 5.4pt; line-height: 115%">Warrants</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">418,531</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(182,070</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">236,461</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5.4pt; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">2,032,378</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(1,294,111</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">738,267</td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="6" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">Nine months ended</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">November 30,</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">November 30,</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2011</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Revenues</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 66%; line-height: 115%">Exploration expense</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">82,615</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Mineral property impairment</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">2,756,456</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">General and administrative</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">269,223</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">29,433</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Total operating expenses</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">3,108,294</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(29,433</td>
<td style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Net gain on assets and liabilities written off</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(295,898</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Amortization of debt discount</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">303,183</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Interest and finance cost</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">19,389</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Non-controlling interest in operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(125,448</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(392</td>
<td style="line-height: 115%">)-</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Loss from discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(3,009,520</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(29,041</td>
<td style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b>Assets classified as Assets from Discontinued Operations:</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">November 30,</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">February 29,</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; font-weight: bold">Assets</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 66%; line-height: 115%">Cash and cash equivalents</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">82,537</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Prepaid expenses</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">52,562</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Taxes receivable</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">275</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; font-weight: bold">Total current assets classified as discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">135,374</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Equipment</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">9,486</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Mineral property expenses</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">6,142,039</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; font-weight: bold">Total long term assets classified as discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">6,151,525</td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><b>Liability classified as Liabilities from Discontinued Operations:</b></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">November 30,</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="line-height: 115%; font-weight: bold; text-align: center">February 29,</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td style="line-height: 115%; font-weight: bold"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; font-weight: bold; text-align: center">2012</td>
<td style="line-height: 115%; font-weight: bold"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%; font-weight: bold">Liabilities</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="width: 66%; line-height: 115%">Accounts payable and accrued expenses</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 13%; line-height: 115%; text-align: right">219,735</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Accounts payable and accrued expenses - related</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">156,414</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Notes payable, net of discounts</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">21,656</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%; font-weight: bold">Total current liabilities classified as from discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">397,805</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Comprehensive income (loss)</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">(3,879</td>
<td style="line-height: 115%">)</td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%; font-weight: bold">Non-controlling interest</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">69,044</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%; font-weight: bold">Total long term liabilities classified as discontinued operations</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">65,165</td>
<td style="line-height: 115%"> </td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%">Mineral property</td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">February 29, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Additions</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Disposals and Impairments</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">November 30, 2012</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 32%; line-height: 115%">Canada <br /> Watabeag, Russell Creek,</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">50,000</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">(50,000</td>
<td style="width: 1%; line-height: 115%">)</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 13%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Mexico</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Huicicila</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">6,086,002</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">6,086,002</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">United Kingdom & Ireland</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Metallum Claims</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">6,142,038</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">(6,142,038</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">12,278,040</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">(6,192,038</td>
<td style="line-height: 115%">)</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%">$</td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">6,086,002</td>
<td style="line-height: 115%"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%">Expiry date</td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Exercise price per share</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance February 29, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Granted</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Forfeited</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Expired/<br /> Cancelled</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance<br /> November 30,<br /> 2012</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 22%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right"> </td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">February 24, 2016</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">10.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">320,000</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">320,000</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">320,000</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 2.25pt double; line-height: 115%; text-align: right">320,000</td>
<td style="line-height: 115%"> </td></tr>
</table>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%">Expiry date</td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Exercise price per share</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance February 29, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Issued</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Exercised</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Expired</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance<br /> November 30 ,<br /> 2012</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 22%; line-height: 115%">December 31, 2012</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">9.80</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">1,056,055</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">1,056,055</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5pt; line-height: 115%; text-indent: -5pt">Total Class A Options Outstanding</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">1,056,055</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">1,056,055</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5pt; line-height: 115%; text-indent: -5pt">Weighted average exercise price</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">9.80</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">9.80</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 5pt; line-height: 115%; text-indent: -5pt">Average remaining contractual term (years)</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">0.08</td>
<td style="line-height: 115%"> </td></tr>
</table>
1613847
-1112041
501806
418531
-182070
236461
2032378
-1294111
738267
50000
-50000
6086002
6086002
6142038
-6142038
12278040
-6192038
6086002
10.00
320000
320000
765556
315264
1092357
200274
855185
52562
112768
98899
2189
3418
9486
6086002
6136002
6142039
27740
150514
8947298
13533816
736089
537893
219735
289363
130092
156414
685412
1111811
21656
738267
581205
571259
3030336
2748860
176156
334468
3206492
3148493
30
72
50
18281908
17401932
-49920
-48231
-3879
414284
414284
11947800
6554144
129200
5740806
10385323
8947298
13533816
.00001
0.00001
100000000
100000000
3000000
3000000
7000000
7000000
3000000
3000000
0.00001
0.00001
50000000
50000000
7228393
4951250
7228393
4951250
150494
200000
19389
-0.53
-0.01
0.04
-0.01
-0.42
-1.37
0.01
-0.42
5674709
3075375
6910035
3117830
-5393656
-4255122
-11947800
324179
-1339732
135374
135374
2933929
-1174
2930540
24468
793
79234
-4331
29422
298852
389325
280666
260502
51695
28875
236461
200000
270000
300000
2110000
100000
50000
292205
77968
40809
125000
71429
222222
2012-10-01
2012-09-19
2012-08-17
2015-03-22
52097
90000
289363
300162
30000
104063
297586
57520
191838
312466
0
0
0
13500
2516103
6151525
6151525
397805
397805
65165
65165
295900
295900
295900
-125448
-392
-127023
-3350
-392
-125448
-392
-2384136
-4226081
-8629347
81678
-1310691
-3430868
-29433
-3741376
-56749
-29433
-3009520
-29041
-3318453
242501
-29041
-3009520
-29041
630303
76268
763081
<p style="margin: 0pt"></p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"><font style="color: black">On October 5, 2012 the Company
entered a sales agreement with European Resource Capital Inc. for the sale of the Company’s 24,420,000 shares of common stock
of Celtic (92.16% interest), 64,987,982 Metallum options providing the acquirer with the option to acquire an additional 64,987,982
common shares of Metallum for </font>£0.10 per share through December 31, 2012 <font style="color: black">and amounts receivable
from Celtic of $217,031 in exchange for payment of $2,500,000 (Canadian) ($2,553,887 at exchange rates at the date of this transaction
and November 30, 2012 $2,516,103). European Resource Capital Inc. issued the Company an eight percent (8%) 5 year $2,500,000 (Canadian)
promissory note payable that is secured by the 24,420,000 shares of Celtic common stock. The sales agreement acknowledges that
JMJ Financial has an unperfected lien against 25% of the purchased shares. Where the Company is unsuccessful in removing JMJ Financials’
unperfected lien, European Resource Capital may settle such lien and reduce the $2,500,000 (Canadian) promissory note by 35% of
its present value.</font></p>
<p style="margin: 0pt"></p>
-295898
1543852
236732
1997349
227809
171102
69044
280000
70629
44041
33220
440000
47303
3400000
129200
155776
-111736
-111736
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 72px"> </td>
<td style="width: 24px; font: 8pt/115% Times New Roman, Times, Serif">(e)</td>
<td style="font: 8pt/115% Times New Roman, Times, Serif">Warrants</td></tr>
</table>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0">The Company accounts for warrants issued in conjunction with
stock issuances under private placement using the fair value method. Under this method, the value of warrants issued is measured
at fair value at the grant date using the Black-Scholes valuation model and recorded as share capital and additional paid-in capital.</p>
<p style="font: 8pt/normal Times New Roman, Times, Serif; margin: 0"> </p>
<p style="margin: 0">The Company recognized the value of detachable warrants issued in conjunction with issuance of the convertible
debenture using the Black-Scholes pricing model. The Company recorded the relative fair value of the warrant as an increase to
additional paid-in capital and discount against the related debt. The discount attributed to the value of the warrants is being
amortized over the term of the underlying debt instrument</p>
<table cellspacing="0" cellpadding="0" style="font: 8pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<tr style="vertical-align: bottom">
<td style="border-bottom: black 1pt solid; line-height: 115%">Expiry date</td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Exercise price per share</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance February 29, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Issued</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Exercised</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Expired</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td colspan="2" style="border-bottom: black 1pt solid; line-height: 115%; text-align: center">Balance<br /> November 30,<br /> 2012</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Class A</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="width: 22%; line-height: 115%">March 1, 2012</td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%">$</td>
<td style="width: 9%; line-height: 115%; text-align: right">8.00</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">3,323</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">3,323</td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 2%; line-height: 115%"> </td>
<td style="width: 1%; line-height: 115%"> </td>
<td style="width: 9%; line-height: 115%; text-align: right">–</td>
<td style="width: 1%; line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">December 19, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">3.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">6,667</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">6,667</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">June 12, 2014</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">8.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">5,000</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">5,000</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">October 14, 2016</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">10.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">7,500</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">7,500</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">Class B</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">April 24, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">10.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">5,921</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">5,921</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">April 24, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">10.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">72,331</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">72,331</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">May 24, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">10.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">3,813</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">3,813</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">July 20, 2012</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">10.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">34,125</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">34,125</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">December 15, 2013</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">5.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">33,333</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">33,333</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Promissory Note Warrants</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">October 25, 2014</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">3.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">33,333</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">33,333</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">March 22, 2015</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">4.00</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">125,000</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">125,000</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%">July 23, 2015</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%">$</td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">1.40</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">71,429</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">71,429</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="line-height: 115%">Total Warrants Outstanding</td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">205,345</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">196,429</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">119,512</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%"> </td>
<td style="border-bottom: black 1pt solid; line-height: 115%; text-align: right">282,262</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: #EEEEEE">
<td style="padding-left: 5pt; line-height: 115%; text-indent: -5pt">Weighted average exercise price</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">7.80</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">1.80</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">–</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%">$</td>
<td style="line-height: 115%; text-align: right">1.80</td>
<td style="line-height: 115%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td style="padding-left: 5pt; line-height: 115%; text-indent: -5pt">Average remaining contractual term (years)</td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%"> </td>
<td style="line-height: 115%; text-align: right">2.19</td>
<td style="line-height: 115%"> </td></tr>
</table>
275
8.00
3.00
8.00
10.00
10.00
10.00
10.00
5.00
3.00
4.00
1.40
1.80
3323
6667
5000
7500
78252
3813
34125
33333
33333
203345
6667
5000
7500
33333
33333
125000
71429
282262
125000
71249
196429
3323
78252
3813
34125
119512
7.80
1.80
P2Y2M9D
9.80
1056055
1056055
1056055
1056055
9.80
9.80
P0Y0M36D