MANAGEMENT’S DISCUSSION & ANALYSIS  Form51-102F  1.14  Financial Instruments and Other instruments  a. Financial Assets and Liabilities  The Company’s financial instruments consist of cash and cash equivalents, restricted cash, forward contracts, accounts  receivable (excluding refundable taxes) and accounts payable and accrued liabilities.  The Company has classified its cash and cash equivalents and restricted cash as held-for-trading. Accounts receivable (excluding  refundable taxes) are classified as loans and receivables. Accounts payable and accrued liabilities are classified as other  liabilities.  The carrying amounts of cash and cash equivalents, restricted cash, accounts receivable (excluding refundable taxes) and  accounts payable and accrued liabilities are considered to be reasonable approximations of their fair values due to the short- term nature of these instruments.  The value of the forward contract has been adjusted to fair value based on quoted market prices.  The carrying values of financial assets by category at June 30, 2010 and 2009 are as follows:  The Company’s cash equivalents bear interest at rates between 0.60% to Prime less 2.00% (2009 – Prime less 2.00% to 2.65%)  and mature between July 14, 2010 and September 12, 2010 (2009 – July 16, 2009 and September 11, 2009). The instrument  maturing July 14, 2010 in the amount of $34,500 was renewed to July 13, 2011 bearing interest at Prime less 1.85% and the  remaining instruments were redeemed subsequent to year-end.  The carrying values of financial liabilities by category at June 30, 2010 and 2009 are as follows:  The Company’s financial instruments are exposed to certain financial risks, including market risk, credit risk, and liquidity risk. Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in  market prices. Market risk is comprised of three types of risk: foreign currency risk, price risk and interest rate risk. The Company is exposed to foreign currency risk to the extent expenditures incurred or funds received by the Company are not  denominated in Canadian dollars. Proceeds from gold sales are in US dollars. The majority of the Company’s expenditures  related to the mine operations and mineral property interests are in Malaysian ringgit, US dollars and Australian dollars. The  Company’s ability to generate revenue and to make payments to satisfy its obligations will be affected by foreign currency rate  fluctuations. The Company is also exposed to foreign currency risk to the extent that it holds cash in Malaysian ringgit and US  dollars. Currency risk  (i) Market risk  b. Financial Instrument Risk Exposure  Financial assets  Held-for-trading  Loans and receivables  2010  2009  2010  2009  Cash and cash equivalents  $ 3 ,949,183  $ 6,109,453  $ -  $ -  Restricted cash  184,958  73,149  -  -  Forward contracts  -  10,103  --  -  Accounts receivable (excluding refundable taxes)  -  -  1,943,529 18,752  $ 4,134,141  $ 6,192,705  $ 1,943,529  $ 18,752  Financial liabilities  Other liabilities  2010  2009  Accounts payable and accrued liabilities  $ 3,844,291  $ 2,095,964  14 | P a g e For the period ended June 30, 2010 