COMMANDER RESOURCES LTD.  (An Exploration Stage Company)  Notes to Financial Statements  For the Years Ended December 31, 2012 and 2011  (Expressed in Canadian dollars)  3.  Summary of Significant Accounting Policies (Continued)  (p) Segment information 4.  Financial Instruments and Risk Management (a) Fair value  (b) Liquidity risk  (c) Credit risk  The Company conducts its business as a single segment being the business of exploring and developing mining  assets in Canada. All exploration and evaluation assets and equipment are situated in Canada.  The Company has classified its financial instruments as follows:  Cash and cash equivalents – as FVTPL  Investment in securities – as AFS  Receivables – as loans and receivables Accounts payable – as other financial liabilities  The carrying values of cash and cash equivalents, receivables and accounts payable approximate their fair values  due to the short-term to maturity of these financial instruments. The following table summarizes fair value measurement by level at December 31, 2012 and 2011 for financial  assets and liabilities measured at fair value on a recurring basis:  Liquidity risk is the risk that the Company will encounter difficulty satisfying financial obligations as they become  due. The Company manages its liquidity risk by forecasting cash flows from operations and anticipated investing  and financing activities. At December 31, 2012, the Company had cash and cash equivalents of $523,110 (2011 - $1,175,776) and accounts payable and accrued liabilities of $46,723 (2011 - $352,953). The Company’s accounts  payable are due within 30 days.  Credit risk is the risk that a counterparty to a financial instrument will fail to discharge its contractual obligations. The Company is exposed to credit risk with respect to its cash and cash equivalents, receivables other than  Harmonized Sales Tax (“HST”) and government funding receivable. This risk is minimized as cash and cash  equivalents have been placed with major Canadian financial institutions. The Company performs ongoing credit  evaluations of its receivables. The maximum exposure to loss arising from receivables is equal to their carrying  amounts. Credit risk with respect to amounts due from related parties, included in receivables, has been assessed as low by  management as the Company has strong working relationships with the parties involved.  - 16 -  Total Level 1 Level 2 Level 3 Investment in securities $ 177,647  $ 117,647  $ - $ 60,000  Investment in securities $ 268,207  $ 228,207  $ - $ 40,000  December 31, 2012 December 31, 2011