MANAGEMENT’S DISCUSSION & ANALYSIS  Form51-102F  For the period ended June 30, 2010  The operating results of the Company reflect its on-going corporate business development, administrative costs and other  income or expenses such as interests and foreign exchange gains or losses. For the year ended June 30, 2010, the Company reported a net loss of $2,936,587, or $0.02 per share, compared to a net loss of  $3,498,950, or $0.02 per share, reported for the corresponding period in fiscal 2009. The operating expenses of $2,779,937 for fiscal 2010 are comprised of salaries, office and administration, legal and accounting,  shareholder communications, conference and travel, regulatory compliance and stock-based compensation. Excluding stock- based compensation expenses of $1,227,420, the Company incurred operating expenses of $1,552,517 compared to operating  expenses of $2,040,393 for fiscal 2009. General and administration expenses, decreased by 13% to $1,018,132 in fiscal 2010 from $1,168,403 in fiscal 2009, were  comprised of salary expenses of $782,030 (2009 - $665,956) and office rent, general office expenses $236,102 (2009 -  $502,447). The salaries increased comparing to the same period of the last year reflecting increased corporate activities, which  are partially offset by decreased general administrative expenditures. Shareholder communications, conference and travel expenses totaled $251,078 in fiscal 2010, decreased by $281,042 from  $532,120 in fiscal 2009, reflecting budget cuts implemented as a result of the global recession. The regulatory and filing  expense was $29,886 in fiscal 2010 compared to $46,160 in the same period of fiscal 2009 primarily due to non-recurring cost  of fees paid to TSXV for the new stock plan in 2009. Legal, accounting and audit expenses were $235,148 in fiscal 2010  compared to $280,086 in fiscal 2009, the variance reflects a non-recurring audit fee adjustment in the same period of 2009 and  reduced general legal expenses.  During fiscal 2010, a total $1,496,855 (2009 - $1,890,837) stock-based compensation expenses were credited to contributed  surplus, of which $1,227,420 (2009 - $1,416,204) was charged to operations, $269,435 (2009 - $474,633) was charged to  exploration, mine development and construction of the plant.  During fiscal 2010, the Company received $29,675 (2009 - $311,591) interest income generated from a cash balance. The  Company incurred a foreign exchange loss of $192,424 compared to $352,911 for the prior year.  1.5 Summary of Quarterly Results The following is selected quarterly financial information about the Company, for its most recent eight quarters:  1.6  Liquidity and Financial Condition  The Company’s principal cash requirements are working capital used for business development, general administration,  property maintenance and development, the gold treatment plant construction and production at Selinsing and exploration at  Buffalo Reef.  The Company's cash balance as at June 30, 2010 was $4,134,141, decreased by $2,048,461, from $6,182,602 as at June 30,  2009. During fiscal 2010, $6,286,751 was used in operations; $4,411,148 was generated from investing activities; and $156,741  was spent on financing activities. During fiscal 2010, the Company spent $6,286,751 on operating activities compared to $1,749,681 in fiscal 2009, the increase  was primarily due to inventory of $4,818,599 at Selinsing Gold Project, reflecting purchase of mine operation supplies, mining  expenditure to stockpile ores and milling process expenditure to extract the gold component from ore materials. 10 | P a g e Sep. 30, 2008 Dec. 31, 2008 Mar. 31, 2009 Jun. 30, 2009 Sep. 30, 2009 Dec. 31, 2009 Mar. 31, 2010 Jun. 30, 2010 From Continued  Operations  $ $ $ $ $ $ $ $  Net loss 848,652  902,217  758,015 990,066 751,741  830,209  759,859  601,678 Loss per share  0.01  0.01  0.00  0.01  0.00  0.01  0.00  0.00  Twelve month results 