NEW OROPERU RESOURCES INC.  MANAGEMENT DISCUSSION & ANALYSIS  For the yearended December31, 2012  (Expressed in US dollars)  d)  Interest rate risk e)  Foreign currency risk Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in  market interest rates. The Company is not exposed to significant interest rate risk. As at December 31, 2012, the majority of the Company’s cash and trade payables and  accrued liabilities are denominated in U.S. dollars, the value of which is subject to  fluctuation in exchange rates. Cash held in Canada and Peru in US dollars amounted to  $20,674 (2011 - $137,027) at December 31, 2012. 2012 2011 Cash and cash equivalents $ 20,674 $ 41,947 Trade payables and accrued liabilities (67,657) (27,781) Net foreign exposure (USD equivalent $ (46,983) $ 14,166 Based on the above net foreign currency exposure  (USD equivalent) as at December 31,  2012, and assuming all other variables remain constant, a 10% weakening or  strengthening of the US dollar agai nst the Canadian dollar would result in animmaterial  increase/decrease in the Company’s loss.  The Company does not utilize derivatives or other techniques to manage foreign curre ncy  risk. f)  Other price risk Other price risk is the risk that the fair value or future  cash flows of a financial instrument  will fluctuate due to changes in market prices, other than those arising from interest rate  risk or foreign currency risk. The Company is not exposed to any significant price risk.  Risk Factors Industry Companies operating in the mining industry face many and varied kind of risks. Following are the risk  factors most applicable to the Company. Exploring and developing mineral resource projects bears a high potential for a  variety of risks. Additionally, few exploration projects successfully achieve development due to factors that cannot be  predicted or foreseen. Moreover, even one such factor  may result in the economic viability of a project  being detrimentallyimpacted such that it is not  feasible or practical to proceed.  Although the Company has taken steps to verify the title to mineral properties in which it has an interest,  in accordance with industry standards for the current stag e of exploration of such properties, these  procedures do not guarantee the  Company's title. Property title may be subject to unregistered prior  agreements or transfers and title may be affected by undetected d efects.  8 