Annual Report 2011  Notes to Consolidated Financial Statements  Monument Mining Limited Reported at July 1, 2010, in CAD  Functional  currency change  Reported at July 1, 2010  in US dollar functional  currency  Total current assets  10,999,920  (400,453)  10,599,467  Total assets  64,585,598  (1,052,112)  63,533,486  Total current liabilities  3,859,014  (221,075)  3,637,939  Total liabilities  7,189,033  (413,750)  6,775,283  Equity  57,396,565  (638,362)  56,758,203  The preparation of financial statements in conformity with Canadian GAAP requires management to make judgments, estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent  assets and liabilities as at the balance sheet date, and the reported amounts of revenues and expenses during the  reporting period. Estimates and assumptions are continuously evaluated and are based on the management’s ex perience  and other factors, including expectation of future events that are believed to be reasonable under the circumstances. Significant estimates made in the preparation of these financial statements include ore reserves and resource estimates,  unit-of-production depreciation, exploration and evaluation expenditures determining accrued liabilities, valuation of  inventory, to determine the carrying value of mineral property interests, estimates of useful lives of plant and  equipment, estimates required to determine whether impairment of long lived assets is required, determination of asset  retirement obligations and environmental obligations, estimations made in determining fair value of gold forward  contracts, assumptions used in calculating fair-value  of Agents’ options, share purchase warrants and stock -based  compensation, allocation of proceeds between common shares and warrants in unit offerings, valuation allowance for  future income tax assets and determination of fair values of financial instruments. While management believes the  estimates are reasonable, actual results could differ from those estimates used in the preparation of the financial  statements and could impact future results of operations and cash flows.  $_{b.}$ Use of estimates  $_{c.}$ Cash and cash equivalents  $_{d.}$ Gold bullion  e. Inventory  Cash and cash equivalents consist of cash and highly liquid investments, with an original term to maturity of three  months or less, that are readily convertible to known amounts of cash.  Investments in gold bullion held are valued at the lower of average cost and net realizable value. Inventory components include supplies, stockpiled ore, work in progress and finished goods. All inventories are recorded  at the lower of cost and net realizable value determined by reference to current resource pricing. The stated value of all  inventories includes direct mining and processing costs, and attributable overhead and depreciation. Any provision for  obsolescence is determined by reference to specific items of stock. A regular review is undertaken to determine the  extent of any provision for obsolescence.  Supplies inventory consists of consumables and spare parts used in mining and processing operations and are valued at  the lower of cost and net realizable value. Cost is determined using the first-in, first-out (FIFO) method. Net realizable  value is the estimated selling price in the ordinary course of business less applicable selling costs. Stockpiled ore represents material that has been extracted from the mine and is ready for further processing. Stockpiled  ore is measured by estimating the number of tonnes added and removed from the stockpile and is verified based on  period surveys. Stockpiled ore is valued based on the current mining costs (including depreciation and amortization)  incurred up to the point of stockpiling the ore using the average cost method. Costs include direct labour and materials,  mine-site overhead, and depreciation and depletion on Selinsing mine equipment, and mineral properties.  45 |  P a g e