Alphamin Resources Corp.

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Alphamin

Resources

Corp.

For the Years Ended December 31, 2011 and 2010

Consolidated

Financial

Statements

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2

Alphamin Resources Corp.

December 31, 2011

Table of contents

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION ... 5

CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS ... 6

CONSOLIDATED STATEMENTS OF CASH FLOWS ... 7

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY (DEFICIENCY) ... 8

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INDEPENDENT AUDITORS' REPORT

To the Shareholders of

Alphamin Resources Corp.

We have audited the accompanying consolidated financial statements of Alphamin Resources Corp., which comprise the consolidated statements of financial position as at December 31, 2011, December 31, 2010 and January 1, 2010, and the consolidated statements of loss and comprehensive loss, changes in equity (deficiency) and cash flows for the years ended December 31, 2011 and 2010, and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

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Opinion

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Alphamin Resources Corp. as at December 31, 2011, December 31, 2010 and January 1, 2010 and its financial performance and cash flows for the years ended December 31, 2011 and 2010 in accordance with International Financial Reporting Standards.

“DAVIDSON & COMPANY LLP”

Vancouver, Canada Chartered Accountants

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Alphamin Resources Corp.

Consolidated Statements of Financial Position (Expressed in Canadian Dollars)

As at December 31 December 31 January 1

2011 2010 2010 (Note 13) (Note 13) $ $ $ Assets Current assets Cash 5,778,221 20,354 68,463 Prepaids and other receivables 33,761 10,907 11,533

5,811,982

31,261 79,996 Non-current assets

Investments - 149,484 -Plant and equipment (Note 3) 47,484 - -Exploration and evaluation assets (Note 5) 14,617,703 - 1,468,045

14,665,187

149,484 1,468,045 Total Assets 20,477,169 180,745 1,548,041

Liabilities Current liabilities

Accounts payable and accrued liabilities (Note 12(b)) 527,170 332,826 247,650 Equity (Deficiency)

Capital stock (Note 7) 19,676,630 9,286,961 9,134,459 Subscriptions received in advance - - 212,500 Commitment to issue shares (Note 4) 5,775,000 - -Convertible note (Note 6) 5,000,000 - -Reserves 3,428,119 2,434,883 2,365,864 Accumulated other comprehensive income (loss) 577,890 (36,510) -Deficit (14,507,640) (11,837,415) (10,412,432)

19,949,999

(152,081) 1,300,391 Total Equity (Deficiency) and Liabilities 20,477,169 180,745 1,548,041

Nature and continuance of operations (Note 1) Subsequent events (Note 14)

Contingency (Note 4)

Approved and authorized by the Board on April 27, 2012

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6

Alphamin Resources Corp.

Consolidated Statements of Loss and Comprehensive Loss Years ended December 31, 2011 and 2010

(Expressed in Canadian Dollars)

2011 2010

(Note 13)

$ $

Expenses

Accounting, audit and legal 248,639 84,103

Administrative 65,466 10,328

Bank charges and interest 195,322 1,492

Consulting fees 87,774 24,000

Depreciation (Note 3) 8,447

-Foreign exchange (8,591) 2,115

Management fees 178,732 78,453

Property examination and maintenance 93,737 4,214 Public relations, filing and transfer fees 95,368 21,276 Stock-based compensation (Note 7(d)) 1,533,620 9,021

Loss for the year before other items (2,498,514) (235,002)

Other items

Interest income 14,283

-Write-off of investment (Note 5(b)) (185,994)

-Write-off of exploration and evaluation assets (Note 5 (a)) - (1,530,970)

Gain on disposition of exploration

and evaluation assets (Note 5(b)) - 340,989

Net loss for the year (2,670,225) (1,424,983)

Other comprehensive income (loss):

Loss on available-for-sale investment, net of tax - (36,510) Write-off of available-for-sale investment 36,510

Translation adjustment 577,890 -Total comprehensive loss (2,055,825) (1,461,493)

Loss per share - basic and diluted (0.07) (0.05)

Weighted average number of common shares

outstanding 37,491,381 26,485,505

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Consolidated Statements of Cash Flows Years ended December 31, 2011 and 2010 (Expressed in Canadian Dollars)

2011 2010

Operating activities

Net loss for the year (2,670,225) (1,424,983) Items not involving cash:

Stock-based compensation 1,533,620 9,021 Depreciation 8,447 -Write off of exploration and evaluation assets - 1,530,970 Gain on disposal of exploration and evaluation assets - (340,989) Write-off of investment 185,994

-Change in non-cash operating working capital items:

Change in prepaids and other receivables (22,854) 626 Change in accounts payable and accrued liabilities 178,111 85,176 Cash provided by (used in) operating activities (786,907) (140,179)

Investing activities

Plant and equipment acquired (2,129) -Proceeds on disposal of exploration and evaluation assets - 154,995 Exploration and evaluation asset expenditures - (62,925) Cash acquired on acquisition of MPC (Note 4) 1,215 -Acquisition costs (Note 4) (243,118) -Cash used in investing activities (244,032) 92,070

Financing activities

Issuance of convertible note 5,000,000 -Issuance of common stock options and warrants for cash 1,764,285 -Cash provided by financing activities 6,764,285 -Effect of foreign exchange on cash 24,521

-Increase (decrease) in cash during the year 5,757,867 (48,109) Cash at beginning of year 20,354 68,463

Cash at end of year 5,778,221 20,354

See the accompanying notes to the consolidated financial statements Supplemental disclosure

Available for sale investment received upon disposal of

exploration and evaluation assets - 185,994 Interest paid - 287 Shares issued/to be issued pursuant to the

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-See accompanying notes to the consolidated financial statements 8

Alphamin Resources Corp

Consolidated Statements of Changes in Equity (Deficiency) (Expressed in Canadian Dollars)

Capital Stock Reserves

Accumulated

Subscriptions Commitment Other Received To Convertible Share-based Comprehensive

Number of Amount in Advance Issue Shares Note Payment Warrants Income (Loss) Deficit Total

Shares $ $ $ $ $ $ $ $ $

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Notes to the consolidated financial statements (Expressed in Canadian Dollars)

For the year ended December 31, 2011

1. Nature and continuance of operations

The Company is incorporated under the British Columbia Business Corporations Act. The Company is in the business of locating, acquiring, exploring and, if warranted, evaluating mineral properties. The head office is located at 205 – 16055 Fraser Hwy, Surrey B.C. The registered and records office is located c/o James Harris Law Corporation, 300 – 576 Seymour Street, Vancouver, B.C.

These consolidated financial statements have been prepared on the basis of accounting principles applicable to a going concern, which assumes the realization of assets and satisfaction of liabilities in the normal course of business.

The Company is in the process of exploring its exploration and evaluation assets. The success of the Company’s future exploration and evaluation activities is influenced by significant financial risks, legal and political risks, commodity prices, and the ability of the Company to discover economically recoverable reserves and to bring such reserves into future profitable production.

As of December 31, 2011, the Company has no source of operating cash flows, has not yet achieved profitable operations, has accumulated losses of $14,507,640, equity of $19,949,999 and working capital of $5,284,812, and expects to incur further losses in the development of its business, all of which cast doubt about the Company’s ability to continue as a going concern. The Company’s ability to continue as a going concern is dependent upon the Company obtaining additional equity and/or debt financing and/or new strategic partners and obtaining the necessary permits in connection with the development of its properties in the Democratic Republic of the Congo. In February 2011, the Company completed a financing for gross proceeds of $1,000,000; and in August 2011 the Company raised $5,000,000 through a convertible note financing. Management believes these funds will suffice for the next 12 months, along with additional financings contemplated in fiscal 2012. However, there is no assurance that further financings and/or strategic partnerships or the necessary permits will be obtained on favorable terms or at all. Failure to obtain future financing and/or strategic partnerships and the necessary permits could result in the delay or indefinite postponement of further exploration of the Company’s properties and may result in the Company not meeting any of its operational and capital requirements.

2. Significant accounting policies

(a) Conversion to International Financial Reporting Standards

The Canadian Accounting Standards Board (“AcSB”) confirmed in February 2008 that International Financial Reporting Standards (“IFRS”) will replace Canadian generally accepted accounting principles (“GAAP”) for publicly accountable enterprises for financial periods beginning on or after January 1, 2011.

These consolidated financial statements have been prepared using accounting policies consistent with IFRS as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”).

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Alphamin Resources Corp.

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2. Significant accounting policies (continued)

(b) Basis of presentation

These consolidated financial statements have been prepared on a historical cost basis except for financial instruments classified as fair value through profit or loss and available-for-sale, which have been measured at fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting, except for cash flow information.

An explanation of how the transition to IFRS with a transition date of January 1, 2010 has affected the reported financial position and financial performance of the Company is provided in Note 13. Note 13 includes explanations of the Company’s consolidated statements of financial position and statements of loss and comprehensive loss and cash flows for comparative periods prepared in accordance with GAAP and as previously reported to those prepared and reported in these consolidated financial statements in accordance with IFRS.

The policies applied in these consolidated financial statements are based on IFRS issued and outstanding as at April 27, 2012, the date the Board of Directors approved these consolidated financial statements for issue. The preparation of these consolidated financial statements resulted in changes to the accounting policies as compared with the most recent annual financial statements prepared under GAAP. The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. They also have been applied in preparing an opening IFRS statement of financial position at January 1, 2010 for the purposes of the transition to IFRS, as required by IFRS 1, First Time Adoption of International Financial Reporting Standards (IFRS 1). The impact of the transition from GAAP to IFRS is explained in Note 13.

(c) Basis of consolidation

These consolidated financial statements incorporate the financial statements of the Company and its controlled subsidiaries. Control exists when the Company has the power, directly or indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its activities. During the year ended December 31, 2011, the Company incorporated two new subsidiaries in the British Virgin Islands, Alphamin Holdings (BVI) Ltd. (“Holdings”, wholly owned by the Company) and Alphamin Resources (BVI) Ltd. (“Alphamin BVI”, wholly owned by Holdings). These subsidiaries were incorporated as part of the acquisition of Mining and Processing Congo, SPRL. The consolidated financial statements include the accounts of the Company and its direct wholly-owned subsidiaries, as follows:

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(d) Measurement uncertainty

The preparation of financial statements in accordance with IFRS as issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.

Significant areas requiring the use of management estimates include the carrying values of exploration and evaluation assets, fair value assumptions used in the measurement of warrants and stock-based compensation, and the recognition of deferred income taxes. Actual results may differ from those estimates.

(e) Cash

Cash consists of cash on hand and on deposit in banks.

(f) Foreign currency translation

The functional currency of an entity is the currency of the primary economic environment in which the entity operates. The functional currency of the Company and Exploraciones La Plata S.A. de C.V. is the Canadian dollar and for Mining and Processing, Congo, SPRL the functional currency is the U.S. dollar. The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates.

Transactions and balances:

Transactions and balances in currencies other than the Canadian dollar are recorded at exchange rates prevailing on the dates of the transactions. At the end of each reporting period, monetary assets and liabilities denominated in foreign currencies are translated at the period end exchange rate while non-monetary assets and liabilities are translated at historical rates. Revenues and expenses are translated at the exchange rates approximating those in effect on the date of the transactions. Exchange gains and losses arising on translation are included in comprehensive loss.

Translation to reporting currency:

The financial results and position of foreign operations whose functional currency is different from the reporting currency are translated as follows:

i) assets and liabilities are translated at year-end exchange rates prevailing at that reporting date; and ii) income and expenses are translated at average exchange rates for the year.

(g) Exploration and evaluation assets

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(g) Exploration and evaluation assets (continued)

The Company reviews the carrying values of its exploration and evaluation assets on a regular basis by reference to the project economics including the timing of the exploration and/or development work, the work programs and the exploration results experienced by the Company and others. The review of the carrying value of any producing property will be made by reference to the estimated future operating results and net cash flows. When the carrying value of a property exceeds its estimated net recoverable amount, provision is made for the decline in value.

The recoverability of the amounts shown for exploration and evaluation assets is dependent on the confirmation of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain the necessary financing to successfully complete their development and the attainment of future profitable operations or proceeds from disposition.

(h) Plant and equipment

Plant and equipment is carried at cost, less accumulated depreciation and accumulated impairment losses. Depreciation is recognized using the straight line method at the following annual rates:

Motor vehicle 5 years

Computer equipment 2 years

Plant and machinery 10 years

(i) Stock-based compensation

The stock option plan allows Company employees and consultants to acquire shares of the Company. The fair value of options granted is recognized as a share-based payment expense with a corresponding increase in equity. An individual is classified as an employee when the individual is an employee for legal or tax purposes (direct employee) or provides services similar to those performed by a direct employee. Consideration paid on the exercise of stock options is credited to capital stock and the fair value of the options is reclassified from reserves to capital stock.

The fair value is measured at grant date and each tranche is recognized over the period during which the options vest. The fair value of the options granted is measured using the Black-Scholes option pricing model taking into account the terms and conditions upon which the options were granted. At each financial position reporting date, the amount recognized as an expense is adjusted to reflect the number of stock options that are expected to vest.

Where equity instruments are granted to employees, they are recorded at the fair value of the equity instrument granted at the grant date. The grant date fair value is recognized in the statement of loss over the vesting period, described as the period during which all the vesting conditions are to be satisfied.

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When the value of goods or services received in exchange for the share-based payment cannot be reliably estimated, the fair value is measured by use of a valuation model. The expected life used in the model is adjusted, based on management’s best estimate, for the effects of non-transferability, exercise restrictions, and behavioural considerations.

(j) Income taxes

Deferred tax is recorded using the liability method, providing for temporary differences, between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for relating to goodwill not deductible for tax purposes, the initial recognition of assets or liabilities that affect neither accounting or taxable loss, and differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the reporting date.

A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized.

(k) Earnings (Loss) per share

The basic earnings (loss) per share is computed by dividing the net earnings (loss) by the weighted average number of common shares outstanding during the year. Diluted earnings per share reflects the potential dilution of common share equivalents, such as outstanding stock options and share purchase warrants, in the weighted average number of common shares outstanding during the period, if dilutive. For this purpose, the “treasury stock method” is used for the assumed proceeds upon the exercise of stock options and warrants that are used to purchase common shares at the average market price during the period.

(l) Provision for Environmental Rehabilitation

The Company recognizes liabilities for legal or constructive obligations associated with the retirement of exploration and evaluation assets and plant and equipment. The net present value of future rehabilitation costs is capitalized to the related asset along with a corresponding increase in the rehabilitation provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value.

The Company’s estimates of reclamation costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to the related assets with a corresponding entry to the rehabilitation provision.

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(m) Financial instruments

Financial assets

The Company classifies its financial assets into one of the following categories as follows:

Fair value through profit or loss - This category comprises derivatives and financial assets acquired principally for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair value recognized in profit or loss.

Loans and receivables - These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are carried at amortized cost using the effective interest method less any provision for impairment.

Held-to-maturity investments - These assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company's management has the positive intention and ability to hold to maturity. These assets are measured at amortized cost using the effective interest method less any provision for impairment.

Available-for-sale - Non-derivative financial assets not included in the above categories are classified as available-for-sale. They are carried at fair value with changes in fair value recognized in other comprehensive income (loss). Where a decline in the fair value of an available-for-sale financial asset constitutes objective evidence of impairment, the amount of the loss is removed from accumulated other comprehensive income (loss) and recognized in profit or loss.

All financial assets except those measured at fair value through profit or loss are subject to review for impairment at least at each reporting date. Financial assets are impaired when there is objective evidence of impairment as a result of one or more events that have occurred after initial recognition of the asset and that event has an impact on the estimated future cash flows of the financial asset or the group of financial assets.

Financial liabilities

The Company classifies its financial liabilities into one of two categories as follows:

Fair value through profit or loss - This category comprises derivatives and financial liabilities incurred principally for the purpose of selling or repurchasing in the near term. They are carried at fair value with changes in fair value recognized in profit or loss.

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(n) Impairment of tangible and intangible assets

At the end of each reporting period, the Company’s assets are reviewed to determine whether there is any indication that those assets may be impaired. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value is determined as the amount that would be obtained from the sale of the asset in an arm’s length transaction between knowledgeable and willing parties. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is reduced to its recoverable amount and the impairment loss is recognized in profit or loss for the period. For an asset that does not generate largely independent cash flows, the recoverable amount is determined for the cash generating unit to which the asset belongs.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but to an amount that does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognized immediately in profit or loss.

(o) New accounting standards and interpretations

The Company has reviewed new and revised accounting pronouncements that have been issued but are not yet effective. The Company has not early adopted any of these standards and is currently evaluating the impact, if any, that these standards might have on its financial statements.

Accounting Standards Issued and Effective January 1, 2012

IAS 12 – Income Taxes (Amended) (“IAS 12”), introduces an exception to the general measurement requirements of IAS 12 in respect of investment properties measured at fair value.

IFRS 7 – Financial instruments: Disclosures (Amended) requires additional disclosures on transferred financial assets.

IFRS 10 – Consolidated Financial Statements establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. This standard requires a parent entity (an entity that controls one or more other entities) to present consolidated financial statements. This standard:

i. defines the principle of control, and establishes control as the basis for consolidation;

ii. sets out how to apply the principle of control to identify whether an investor controls an investee and therefore must consolidate the investee; and

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IFRS 11 –Joint Arrangements establishes the core principle that a party to a joint arrangement determines the type of joint arrangement in which it is involved by assessing its rights and obligations and accounts for those rights and obligations in accordance with that type of joint arrangement.

IFRS 12 –Disclosure of Involvement with Other Entities requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with, its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows.

IFRS 13 – Fair Value Measurement defines fair value, sets out in a single IFRS a framework for measuring fair value and requires disclosures about fair value measurements. IFRS 13 applies when another IFRS requires or permits fair value measurements or disclosures about fair value measurements (and measurements, such as fair value less costs to sell, based on fair value or disclosures about those measurements), except for: share-based payment transactions within the scope of IFRS 2 Share-based Payment; leasing transactions within the scope of IAS 17 Leases; measurements that have some similarities to fair value but that are not fair value, such as net realizable value in IAS 2 Inventories or value in use in IAS 36 Impairment of Assets.

IAS 27 – Separate Financial Statements has the objective of setting standards to be applied in accounting for investments in subsidiaries, joint ventures, and associates when an entity elects, or is required by local regulations, to present separate (non-consolidated) financial statements.

IAS 28 – Investments in Associates and Joint Ventures prescribes the accounting for investments in associates and sets out the requirements for the application of the equity method when accounting for investments in associates and joint ventures. IAS 28 applies to all entities that are investors with joint control of, or significant influence over, an investee (associate or joint venture).

IFRS 9 – Financial Instruments replaces the current standard IAS 39 Financial Instruments: Recognition and Measurement, replacing the current classification and measurement criteria for financial assets and liabilities with only two classification categories: amortized cost and fair value.

The Company is currently evaluating the impact of the above pronouncements

3. Plant and equipment

Description Computer and Equipment Motor Vehicles Plant and Machinery Total Cost

Balance, January 1, 2010 and December 31,

2010 $ - $ - $ - $ -

Assets acquired 1,495 17,854 32,459 51,808

Balance, December 31, 2011 1,495 17,854 32,459 51,808

Accumulated Depreciation

Balance, January 1, 2010 and December 31,

2010 - - - -

Depreciation (993) (4,445) (3,009) (8,447)

Balance, December 31, 2011 (993) (4,445) (3,009) (8,447)

Foreign currency movement 48 1,275 2,800 4,123

Net Asset Value

January 1, 2010 and December 31, 2010 $ - $ - $ - $ -

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4. Acquisition of Mining and Processing Congo SPRL and Contingency

On August 18, 2011, the Company completed the acquisition of a 70% interest in Mining and Processing Congo, SPRL (“MPC”) in consideration for the issuance of 24,000,000 common shares of the Company, of which 14,000,000 were issued as at December 31, 2011. The remaining 10,000,000 were issued on March 18, 2012 and have been recorded as a commitment to issue shares as at December 31, 2011. An additional 1,200,000 common shares were issuable as a finder's fee, of which 700,000 have been issued on closing, and the remaining 500,000 were issued March 18, 2012 all of which were included in the purchase price.

The Company can purchase (or be required to purchase by the vendor) an additional 20% of MPC for a period ending on March 17, 2014, the purchase price of which is payable in cash or shares (at the discretion of the vendor) and calculated based on the value of a percentage of the Company’s issued share capital using a minimum $0.80 share price. Management has determined that it is not likely the vendor will force purchase of the additional 20% and has not accrued any amounts for it on these financial statements.

The total purchase price of $14,103,118 includes the following:

Acquisition costs – common shares $ 13,475,000

Acquisition costs – common shares issued for finders’ fees 385,000

Acquisition costs – advances to subsidiary 243,118

$ 14,103,118

The total purchase price of $14,103,118 has been allocated as follows:

Cash $ 1,215

Plant and Equipment 51,808

Accounts payable and accrued liabilities (15,699)

Exploration and evaluation asset 14,065,794

$ 14,103,118

5. Exploration and evaluation assets

Exploration and evaluation assets consist of:

Dec 31, 2011 Dec 31, 2010 $ $ 14,617,703 -14,617,703 -Total Bisie Project (c)

Acquisition costs and deferred exploration expenditures incurred during the years ended December 31, 2011 and 2010 were as follows:

Balance as at January 1, 2010 $ 1,468,045

Mining duties 37,136

Geological consulting 25,789

Write-off (1,530,970)

Balance as at December 31, 2010

-Acquisition costs (Note 4) 14,065,794

Foreign currency movement 551,909

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5. Exploration and evaluation assets (continued)

(a) The Company had the exclusive right to explore and develop the El Violin II claim. This Mexican property is situated mainly in the municipality of Mochitlan, with parts to the northeast and southeast, lying in the municipality of Quechultenango. The Company has an agreement to explore and develop the claim. The former owner retains a 3% net smelter royalty.

As at December 31, 2010, the Company decided not to pursue this exploration project, and wrote-off $1,530,970 to operations.

(b) In October 2006, the Company applied for and staked three concessions, Aurora, Aurora II and III (the “Aurora”), in the municipality of Coynca de Catalon, State of Guerrero, Mexico. During the year ended December 31, 2008, management determined that the exploration and evaluation assets were impaired and the capitalized costs were written off.

In June 2010, the Company closed a property purchase agreement with Cigma Metals Corporation (“Cigma”) regarding the sale and transfer by the Company of a 100% interest in the Aurora in consideration for $154,995 (US$150,000) and 1,000,000 common shares of Cigma. The Company recorded a gain of $340,989 on disposal of the Aurora. The Company will retain a 1.5% net smelter returns royalty on production from the Aurora. During the year ended December 31, 2011 the Company wrote off the investment of common shares of Cigma which originally had a value of $185,994.

(c) During the year ended December 31, 2011., the Company closed its acquisition of a 70% interest in MPC (Note 4), a company incorporated in the Democratic Republic of the Congo and the holder of four prospecting permits constituting the Bisie Property in that country.

The Company was also granted a call option to purchase an additional 20% of MPC for a period of three years, the purchase price of which is payable in cash or shares of the Company at the option of the seller and calculated based on the value of a percentage of the Company’s issued share capital using a minimum $0.80 share price.

6. Convertible Note

In conjunction with the acquisition of MPC (Note 4), the Company closed a $5,000,000 convertible note private placement, which notes bear interest at 8% per annum, and will be convertible automatically into shares of the Company on March 18, 2012 at $0.80 per share, for an aggregate 6,250,000 shares. Finders’ fees of an aggregate 1,425,000 shares were issued. Subsequent to December 31, 2011, all convertible notes were converted to shares (Note 14).

7. Capital stock and reserves

(a) Capital stock

The authorized capital stock of the Company consists of an unlimited number of common shares without par value.

(b) Changes in issued capital stock and reserves during the year ended December 31, 2011 were as

follows:

(i) The Company issued 1,019,909 shares pursuant to the exercise of warrants at $0.165 per share.

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7. Capital stock and reserves (continued)

(iii) The Company issued 14,000,000 shares pursuant to the acquisition of MPC and the Bisie Property (Note 4).

(iv) The Company closed a $96,000 private placement which consisted of 200,000 units at $0.48 per unit. Each unit consists of one common share and one share purchase warrant exercisable at $0.60 until August 16, 2013.

(v) The Company issued 2,000,000 common shares pursuant to the exercise of stock options at $0.25 per share.

(vi) The Company closed a $1,000,000 private placement which consisted of 5,000,000 units at $0.20 per unit. Each unit consists of one common share and one-half of one non-transferrable share purchase warrant exercisable at $0.25 until February 22, 2013. The securities issued were subject to a holding period that expired on June 23, 2011.

The share purchase warrants were fair valued using an option pricing model with the following assumptions: no dividends will be paid, a volatility of the Company’s share price of 211%, an expected life of the warrants of two years and an annual risk free rate of 1.68%.

(c) Changes in issued capital stock and reserves during the year ended December 31, 2010 were as

follows:

(i) On January 19, 2010, the Company closed a $212,500 private placement which consisted of 1,700,000 units at $0.125 per unit. Each unit consisted of one common share and a non-transferable share purchase warrant exercisable until January 19, 2012 at $0.165.

The share purchase warrants were fair valued using an option pricing model with the following assumptions: no dividends will be paid, a volatility of the Company’s share price of 40%, an expected life of the warrants of two years and an annual risk free rate of 1.25%.

(d) Stock options

The Company has a stock option plan (the “Stock Option Plan”), under which, the Company may grant options to directors, officers, employees and other service providers. The number of options outstanding at any time may not exceed 20% of the total number of issued shares on a non-diluted basis. In addition, the Stock Option Plan limits the number of options which may be granted to any one individual to not more than 5% of the total issued and outstanding shares of the Company in a 12 month period and further limits options granted to any one person or consultant employed to provide investor relations activities to 2% of the total issued and outstanding shares of the Company in a 12 month period. The exercise price associated with each grant of options is determined by the board of Directors.

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(d) Stock options (continued)

A summary of stock option activity and information concerning currently outstanding and exercisable options are as follows:

Weighted

Number of average

options exercise price $ Balance January 1, 2010 and December 31, 2010 2,000,000 0.25 Options granted 3,400,000 0.41 Options exercised (2,000,000) 0.25 Balance, December 31, 2011 3,400,000 0.41 Options outstanding

The following table summarizes information concerning outstanding and exercisable options at December 31, 2011:

Options outstanding and exercisable Weighted average

Number Number exercise price

outstanding exercisable Expiry date per share

$ 3,100,000 3,100,000 April 7, 2016 0.40 300,000 300,000 June 9, 2016 0.48 3,400,000 3,400,000 0.41

The Company recorded a charge to earnings of $1,533,620 (2010 - $9,021) for the year ended December 31, 2011 for 3,400,000 stock options granted during the year.

The weighted average grant date fair value per option was $0.45 (2010 - $Nil). The stock-based compensation expense related to options granted was determined using the Black-Scholes option pricing model and the following weighted average assumptions:

2011

Forfeiture rate

-Risk free interest rate 2.80%

Expected life of options in years 5

Annualized volatility 125%

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(e) Share purchase warrants

A summary of warrants activity and information concerning outstanding warrants are as follows:

Weighted

Number of average

warrants exercise price Balance, January 1, 2010 5,000,000 $ 0.20 Warrants issued during the year 1,700,000 0.17 Warrants expired during the year (5,000,000) 0.20 Balance, December 31, 2010 1,700,000 0.17 Warrants issued during the year 2,700,000 0.28 Warrants exercised during the year (1,019,909) 0.165 Warrants expired during the year - -Balance, December 31, 2011 3,380,091 $ 0.25

Warrants outstanding

The following table summarizes information concerning outstanding warrants as at December 31, 2011:

Number of Exercise

warrants Expiry date price

$ 680,091

January 19, 2012 0.165 (subsequently exercised) 2,500,000

February 22, 2013 0.25 200,000

August 16, 2013 0.60

8. Related party transactions

During the year ended December 31, 2011, the Company incurred the following related party transactions :

Item Party 2011 2010

Management and director fees * $ 250,678 $ 78,453

Accounting fees Peter Rook-Green,

Sheryl Jones 26,500 -

Legal fees James Harris 52,049 -

Accounts payable * $ 52,625 $ 28,511

* Cosme M. Beccar Valera, Cam Richardson, Carl Verley, Anna Styliandes

9. Segmented information

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10. Income Taxes

The reconciliation of the combined Canadian federal and provincial income tax rate to the income tax recovery presented in the accompanying consolidated statements of comprehensive loss is provided below:

2011 2010

Accounting Profit (Loss) before income taxes $ (2,670,225) $ (1,424,983) Combined federal and provincial statutory income tax rate 26.5% 28.5% Income tax expense (recovery) at statutory tax rates $ (708,000) $ (406,000) Impact of different foreign statutory tax rates on earnings of subsidiaries (26,000) (12,000) Non-deductible expenditures and non-taxable revenues 406,000 111,000 Impact of future income tax rates applied versus current statutory rate 15,000 24,000 Expiration of non-capital losses 60,000 - Change in unrecognized deductible temporary differences and other 253,000 283,000 Total $ - $ - The Canadian income tax rate declined during the year due to changes in the law that reduced corporate income tax rates in Canada.

Significant components of deferred tax assets that have not been set up are as follows:

2011 2010

Share issue costs $ 2,000 $ 2,000 Allowable Capital losses 139,000 139,000 Non-capital losses 885,000 695,000 Capital assets 2,000 - Mineral properties 429,000 429,000 Marketable securities 19,000 -

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10. Income Taxes (continued)

Significant components of deductible and taxable temporary differences and unused tax losses that have not been included on the consolidated statements of financial position are as follows:

2011 Expiry dates 2010 Expiry dates

Share issue costs $ 7,000 2032 - 2034 $ 10,000 2031 - 2034 Allowable Capital losses 556,000 No expiry 556,000 No expiry Non-Capital losses 3,354,000 2014 to 2031 2,694,000 2011 to 2030 Capital assets 4,000 No expiry -

Mineral properties 1,531,000 No expiry 1,531,000 No expiry Marketable Securities 149,000 No expiry -

11. Capital management

The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the evaluation and exploration of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk.

The Company depends on external financing to funds its activities. The capital structure of the Company currently consists of common shares, stock options and share purchase warrants. Changes in the equity accounts of the Company are disclosed in Note 7. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, acquire or dispose of assets or adjust the amount of cash.

In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets, which are approved by the Board of Directors and updated as necessary depending on various factors, including capital deployment and general industry conditions.

The Company anticipates continuing to access equity markets to fund continued exploration of its exploration and evaluation assets and the future growth of the business.

As at December 31, 2011, the Company has shareholders’ equity of $19,949,999. The Company is not subject to any externally imposed capital requirements.

12. Financial instruments and risk management

The Company’s financial instruments are exposed to a number of financial and market risks, including credit, liquidity and foreign exchange risks. The Company may, or may not, establish from time to time active policies to manage these risks. The Company does not currently have in place any active hedging or derivative trading policies to manage these risks since the Company’s management does not believe that the current size, scale and pattern of its operations would warrant such hedging activities.

(a) Credit risk

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12. Financial instruments and risk management (continued)

The primary source of credit risk for the Company arises from the following financial assets: (1) cash; and (2) other receivables. The Company has not had any credit losses in the past, nor does it expect to have any credit losses in the future. At December 31, 2011, the Company has no financial assets that are past due or impaired due to credit risk defaults.

The Company’s maximum exposure to credit risk at the reporting date is as follows:

$ Cash 5,778,221 Other receivables 30,261 5,808,482 (b) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its obligations with respect to financial liabilities as they fall due. The Company’s financial liabilities are comprised of accounts payable and accrued liabilities. The Company frequently assesses its liquidity position by reviewing the timing of amounts due and the Company’s current cash flow position to meet its obligations. The Company manages its liquidity risk by maintaining a sufficient cash balance to meet its anticipated operational needs.

When there are not sufficient funds, the Company reduces its exploration and corporate spending to preserve liquidity.

The Company’s financial liabilities, consisting of accounts payable and accrued liabilities, arose as a result of corporate expenses. Payment terms on these liabilities are typically 30 to 60 days from receipt of invoice and do not generally bear interest. The following table summarizes the remaining contractual maturities of the Company’s financial liabilities:

Within

12 months Total

$ $

Accounts payable and accrued liabilities 527,170 527,170

As at December 31, 2011 the Company has sufficient cash to meet its obligations.

(c) Market risk

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12. Financial instruments and risk management (continued)

(d) Foreign exchange risk

The Company operates on an international basis and therefore, foreign exchange risk exposures arise from transactions denominated in foreign currencies. The Company is exposed to foreign currency risk on fluctuations related to financial instruments that are denominated in United States dollars (“U.S.$”) and the Mexican Peso (Peso). A 10% fluctuation in the U.S.$ and Peso against the Canadian dollar would affect net loss for the period by approximately $5,000 and accumulated other comprehensive income by $18,000.

(e) Fair value measurement

At December 31, 2011 and 2010, the carrying values and the fair values of the Company’s financial instruments are shown in the following table.

2011 2010

Carrying Fair Carrying Fair

value value value value

$ $ $ $ Financial assets Cash 5,778,221 5,778,221 20,354 20,354 Other receivable 30,261 30,261 10,907 10,907 Investments - - 149,484 149,484 Financial liabilities

Accounts payable and

accrued liabilities 527,170 527,170 332,826 332,826

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data.

The fair value of the Company’s other receivables, and accounts payable and accrued liabilities approximate their carrying values. The Company’s other financial instruments, being cash and investments are measured at fair value using Level 1 inputs.

13. Transition to International Financial Reporting Standards

As stated in Note 2, these consolidated financial statements are for the period covered by the Company’s first annual consolidated financial statements prepared in accordance with IFRS. The accounting policies in Note 2 have been applied in preparing the consolidated financial statements for the year ended December 31, 2011 and 2010, and the opening IFRS statement of financial position on January 1, 2010, the "Transition Date".

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13. Transition to International Financial Reporting Standards (continued)

a) to apply the requirements of IFRS 3, Business Combinations, prospectively from the Transition Date; and b) to apply the requirements of IFRS 2, Share-based payment, only to equity instruments granted after

November 7, 2002 which had not vested as of the Transition Date.

Additionally, in accordance with IFRS 1, an entity’s estimates under IFRS at the date of transition to IFRS must be consistent with estimates made for the same date under previous GAAP, unless there is objective evidence that those estimates were in error. The Company’s IFRS estimates as of January 1, 2010 are consistent with its GAAP estimates for the same date.

14. Subsequent events

a) The Company’s $5,000,000 in convertible notes were converted automatically March 18, 2012 in accordance with the terms of the convertible note agreements. The notes were converted into 6,250,000 common shares using a price of $0.80 as required by the convertible note agreements.

b) The Company issued 10,000,000 shares in relation to the acquisition of MPC outlined in Note 4. An additional 500,000 shares were issued as finder’s fees in relation to the transaction.