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AVAILABLE FOR SALE SECURITIES - RELATED PARTIES

9 Months Ended

Sep. 30, 2012

NOTE 3- AVAILABLE FOR SALE SECURITIES - RELATED PARTIES

Terralene Fuels

During 2004, the Company received 111,111 restricted Rule 144 shares of Terralene Fuels Corporation (“Terralene Fuels”), a public company with directors and significant shareholders in common. The restricted shares were received as non-refundable consideration pursuant to agreements with Terralene Fuels dated November 10, 2004 and December 10, 2004 to acquire certain mineral property interests from the Company. These agreements were subsequently terminated.

Effective December 31, 2004 the Company recorded, as other comprehensive loss for the year, a $10,000 unrealized loss in the carrying value of its shares of Terralene Fuels. During the years ended December 31, 2005 and 2006 the Company recorded additional unrealized losses in the carrying value of its shares of Terralene Fuels totalling $90,000 and $8,889 respectively, which were recorded as other comprehensive loss for those years. During the year ended December 31, 2007, the Company sold 2,500 shares resulting in a realized gain of $165 and recorded an additional unrealized loss of $473 in 2007. During the year ended December 31, 2008, the Company sold 10,000 shares resulting in a realized loss of $800 and recorded an additional unrealized loss of $15,026 to December 31, 2008. As a result, the carrying value of the available for sale shares of Terralene Fuels is $2,712 as at December 31, 2008.

During the year ended December 31, 2009, the Company recorded an unrealized gain of $1,232. As a result, the carrying value of the available for sale shares of Terralene Fuels is $3,945 as at December 31, 2009.

During the year ended December 31, 2010, the Company sold Nil Terralene Fuels shares and recorded an unrealized gain of $11,774. As a result, the carrying value of the available for sale shares of Terralene Fuels is $2,860 as at December 31, 2010. Effective December 31, 2010, the Company recorded a $12,859 write-down of its investment in Golden due to an other-than-temporary decline in the value of the shares.

During the year ended December 31, 2011, the Company sold Nil Terralene Fuels shares and recorded an unrealized loss of $2,623. As a result, the carrying value of the available for sale shares of Terralene Fuels is $237 as at December 31, 2011. Effective December 31, 2011, the Company recorded a $2,909 write-down of its investment in Golden due to an other-than-temporary decline in the value of the shares.

During the nine month period ended September 30, 2012, the Company sold Nil Terralene Fuels shares and recorded an additional unrealized loss of $(119) to September 30, 2012. As a result, the carrying value of the available for sale shares of Terralene Fuels is $118 as at September 30, 2012.

Legacy

During 2003 the Company settled an outstanding debt receivable of $122,988 from Legacy Mining Ltd. (“Legacy”) for the issue of 1,229,880 restricted shares of Legacy representing a then 9.8% interest in Legacy. During 2004, the Company wrote this investment down to $1 because management determined that it was not recoverable within a reasonable period of time.

Effective December 31, 2007, the Company recorded, as other comprehensive income for the year, a $604,440 unrealized gain in the carrying value of its shares of Legacy.

During the year ended December 31, 2008, the Company sold 150,000 Legacy shares resulting in a realized gain of $26,100 and recorded an additional unrealized gain of $270,562 to December 31, 2008. As a result, the carrying value of the available for sale shares of Legacy was $885,502 as at December 31, 2008.

During the year ended December 31, 2009, the Company sold 30,985 Legacy shares resulting in a realized loss of $2,987 (net of commissions of $595) and recorded an additional unrealized loss of $797,161 to December 31, 2009. As a result, the carrying value of the available for sale shares of Legacy is $ 62,934 as at December 31, 2009.

During the year ended December 31, 2010, the Company received 2,627,440 restricted shares of Legacy valued to $131,372 pursuant to a debt settlement and sold Nil Legacy shares. The Company recorded an unrealized gain in the carrying value of its available-for-sale securities totaling $35,021, which was recorded as other comprehensive income (loss). As a result, the carrying value of the available for sale shares of Legacy is $58,822 as at December 31, 2010. Effective December 31, 2010, the Company recorded a $78,823 write-down of its investment in Legacy due to an other-than-temporary decline in the value of the shares.

During the year ended December 31, 2011, the Company sold Nil Legacy shares and recorded an unrealized loss of $52,939. As a result, the carrying value of the available for sale shares of Legacy is $5,882 as at December 31, 2011. Effective December 31,

2011, the Company recorded a $51,469 write-down of its investment in Legacy due to another-than-temporary decline in the value of the shares.

During the nine month period ended September 30, 2012, the Company sold Nil Legacy shares and recorded an additional unrealized loss of $(1,838) to September 30, 2012. As a result, the carrying value of the available for sale shares of Legacy is $4,044 as at September 30, 2012.

Available for sale securities – related parties include the following:

	September		December
	30, 2012		31, 2011

3,676,335 (2011-3,676,335) shares of Legacy Wine & Spirits	$	4,044	$	5,882
98,612 (2011- 98,612) shares of Terralene Fuels Corporation		118		237

	$	4,162	$	6,119