A copy of this preliminary prospectus has been filed with the securities regulatory authorities in each of

British Columbia, Alberta and Ontario but has not yet become final for the purpose of the sale of
securities. Information contained in this preliminary prospectus may not be complete and may have to be
amended. The securities may not be sold until a receipt for the prospectus is obtained from the securities
regulatory authorities.
This prospectus constitutes a public offering of these securities only in those jurisdictions where they may
be lawfully offered for sale and therein only by persons permitted to sell such securities. No securities
regulatory authority has expressed an opinion about these securities and it is an offence to claim
otherwise.
The securities offered hereby have not been and will not be registered under the United States Securities
Act of 1933, as amended, (the "U.S. Securities Act") or any state securities laws, and, subject to certain
exceptions, may not be offered, sold or delivered, directly or indirectly in the United States of America, its
territories or possessions and this prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities offered hereby within the United States. See "Plan of Distribution".
INITIAL PUBLIC OFFERING

April 28, 2011

PRELIMINARY PROSPECTUS

RED EAGLE MINING CORPORATION

(the "Company")
Shares
per Share
This prospectus (the "Prospectus") qualifies the distribution (the "Offering") of common shares (the
"Offered Shares") of Red Eagle Mining Corporation (the "Company") at a price of $ per Offered
Share (the "Offering Price"). The Offered Shares are being offered pursuant to an agency agreement
dated , 2011 (the "Agency Agreement") among the Company, Raymond James Ltd., BMO Nesbitt
Burns Inc., Canaccord Genuity Corp. and Salman Partners Inc. (together the "Agents"). The Offering
Price of the Offered Shares and the terms of the Offering have been determined by negotiation between
the Company and the Agents.
Price to Public

Agents'
Commission(1)

Net Proceeds to the

Company(2)

Per Share

Offering(3)

Notes:

1.

The Company has agreed to pay the Agents a cash commission equal to 6% of the gross proceeds of the Offering (the
"Agents' Commission"). In addition, the Agents will receive warrants (the "Agents' Warrants") entitling them to
acquire that number of Common Shares (as hereinafter defined) as is equal to 3% of the total number of Offered Shares
sold pursuant to the Offering (including any Additional Shares sold pursuant to the Over-Allotment Option) at the
Offering Price for a period of 18 months from the Closing Date. This Prospectus qualifies the distribution of the
Agents' Warrants to the Agents. The Company has also agreed to pay the Agents' expenses in connection with the
Offering, including legal expenses and the Agents' reasonable out-of-pocket expenses. See "Plan of Distribution".

008226000-00082763; 17

ii
2.

Before deducting the balance of the expenses of the Company and the Agents relating to the Offering, estimated not to
exceed $, which will be paid by the Company out of the proceeds of the Offering. See "Use of Proceeds".

3.

The Company has granted the Agents an option (the "Over-Allotment Option"), exercisable in whole or in part for a
period of 30 days from Closing of the Offering to solicit subscriptions for and purchase or arrange for purchase of such
number of Common Shares (the "Additional Shares") as is equal to 15% of the number of Offered Shares sold
pursuant to the Offering and to require the Company to issue and deliver such number of Additional Shares as is
required to cover over-allotments, if any, and for market stabilization purposes. This Prospectus qualifies the grant of
the Over-Allotment Option and the distribution of Additional Shares issued upon the exercise of the Over-Allotment
Option. In the event the Agents exercise the Over-Allotment Option in full, the Price to Public, Agents' Commission
and Net Proceeds to the Company (before deducting expenses of the Offering), will be $, $ and $ respectively. A
purchaser who acquires Additional Shares forming part of the Agents' over-allotment position, acquires the Additional
Shares under this Prospectus, regardless of whether the over-allocation position is ultimately filled through the exercise
of the Over-Allotment Option or secondary market purchases. The Additional Shares and the Offered Shares are herein
collectively referred to as the "Shares".

There is currently no market through which the securities offered hereunder may be sold and
purchasers may not be able to resell securities purchased under this Prospectus. This may affect
the pricing of the securities in the secondary market, the transparency and availability of trading
prices, the liquidity of the securities, and the extent of issuer regulation. Investments in natural
resource issuers involve a significant degree of risk. The degree of risk increases substantially when
an issuer's properties are in the exploration as opposed to the development stage. All of the
properties of the Company are in the exploration or pre-exploration stage and are without a known
body of commercial ore. An investment in these securities should only be made by persons who can
afford the total loss of their investment. See "Risk Factors".
The Company has applied to list the common shares (the "Common Shares") on the TSX Venture
Exchange (the "Exchange"). Listing will be subject to the Company fulfilling all of the listing
requirements of the Exchange.
As at the date of this Prospectus, the Company does not have any of its securities listed or quoted, has not
applied to list or quote any of its securities, and does not intend to apply to list or quote any of its
securities, on the Toronto Stock Exchange, a U.S. marketplace, or a marketplace outside Canada and the
United States of America.
The Agents, as exclusive agents of the Company for the purposes of the Offering, conditionally offer the
Offered Shares on a commercially reasonable efforts basis, subject to prior sale, if, as and when issued by
the Company and accepted by the Agents in accordance with the Agency Agreement referred to under
"Plan of Distribution".
Subscriptions for the Offered Shares offered hereunder will be received subject to rejection or allotment
in whole or in part and the Agents reserve the right to close the subscription books at any time without
notice. Other than the Shares offered or sold in the United States, which will be represented by individual
certificates, registration of interests in and transfers of Shares held through CDS Clearing and Depository
Services Inc. ("CDS") or its nominee will be made electronically through the non-certificated inventory
("NCI") system of CDS. Common Shares registered to CDS or its nominee will be deposited
electronically with CDS on an NCI basis on the closing of the Offering. It is expected that the closing
date of the Offering (the "Closing Date") will be no later than , 2011. The Offered Shares are to be
taken up by the Agents, if at all, on or before a date not later than 90 days after the date of the receipt for
the final prospectus relating to the Offering. Funds received in connection with subscriptions during this
90 day period will be held by the Agents as depository and if the entire Offering is not achieved during
this period, the funds will be returned to the subscribers unless the subscribers have otherwise instructed
the Agents. A purchaser of Offered Shares (other than a purchaser of Offered Shares in the United States)
will receive only a customer confirmation from a registered dealer that is a CDS participant and from or
through which the Shares are purchased. See "Plan of Distribution".

008226000-00082763; 17

iii
Subject to applicable laws, and in connection with the Offering, the Agents may effect transactions
intended to stabilize or maintain the market price of the Common Shares at levels other than those that
might otherwise prevail in the open market. Such transactions, if commenced, may be discontinued at any
time. See "Plan of Distribution".
An investment in the Shares is highly speculative and involves a high degree of risk. Investors
should carefully review the risk factors outlined in this Prospectus. See "Risk Factors".
Potential investors are advised to consult their own legal counsel and other professional advisers in
order to assess income tax, legal and other aspects of this investment.
No person has been authorized to give any information other than that contained in this
Prospectus, or to make any representations in connection with the Offering made hereby, and, if
given or made, such other information or representations must not be relied upon as having been
authorized by the Company. This Prospectus does not constitute an offer to sell or a solicitation of
an offer to buy securities in any jurisdiction or to any person to whom it is unlawful to make such
offer or solicitation in such jurisdiction.
The Company is not a related or connected issuer (as such terms are defined in National Instrument 33105-Underwriting Conflicts) to the Agents.
The following table set out securities issuable to the Agents:
Exercise price or
average acquisition
price

Agents' Position

Maximum size or
number of securities
available

Exercise period or
acquisition date

Agents' Warrants

Up to Agents' Warrant
Shares

18 months from the

Closing Date

Over-Allotment Option

Up to Additional Shares

30 days following the

Closing Date

Total Securities Under Option

Issuable to the Agents

Up to Common Shares

N/A

N/A

Unless otherwise noted, all currency in this Prospectus are stated in Canadian dollars.
Certain legal matters relating to the securities offered hereby will be passed upon by Anfield Sujir
Kennedy & Durno LLP, Barristers & Solicitors, on behalf of the Company and by Blake, Cassels &
Graydon LLP, Barristers & Solicitors, on behalf of the Agents. No person is authorized to provide any
information or to make any representation in connection with this offering other than as contained in this
Prospectus.

008226000-00082763; 17

TABLE OF CONTENTS

PROSPECTUS SUMMARY ...................................................................................................................... I

SEE "SELECTED FINANCIAL INFORMATION AND MANAGEMENT'S DISCUSSION AND
ANALYSIS". ........................................................................................................................................... VII
CURRENCY............................................................................................................................................ VII
CAUTION REGARDING FORWARD-LOOKING STATEMENTS ............................................. VIII
ELIGIBILITY FOR INVESTMENT .................................................................................................. VIII
CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION .................................IX
CORPORATE STRUCTURE ................................................................................................................... 1
BUSINESS OF THE COMPANY ............................................................................................................. 1
USE OF PROCEEDS ............................................................................................................................... 38
DIVIDENDS OR DISTRIBUTIONS ...................................................................................................... 40
SELECTED FINANCIAL INFORMATION AND MANAGEMENT'S DISCUSSION AND
ANALYSIS ................................................................................................................................................ 40
DESCRIPTION OF SECURITIES DISTRIBUTED............................................................................. 45
CONSOLIDATED CAPITALIZATION ................................................................................................ 45
OPTIONS TO PURCHASE SECURITIES ............................................................................................ 46
PRIOR SALES .......................................................................................................................................... 47
ESCROWED SECURITIES AND SECURITIES SUBJECT TO CONTRACTUAL
RESTRICTION ON TRANSFER ........................................................................................................... 48
PRINCIPAL SECURITYHOLDERS ..................................................................................................... 50
DIRECTORS AND EXECUTIVE OFFICERS ..................................................................................... 50
EXECUTIVE COMPENSATION ........................................................................................................... 54
008226000-00082763; 17

ii
COMPENSATION OF DIRECTORS .................................................................................................... 57
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS ............................................... 58
AUDIT COMMITTEE ............................................................................................................................. 58
CORPORATE GOVERNANCE ............................................................................................................. 58
PLAN OF DISTRIBUTION..................................................................................................................... 58
RISK FACTORS ....................................................................................................................................... 61
PROMOTERS ........................................................................................................................................... 69
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS .................. 69
RELATIONSHIP BETWEEN THE COMPANY AND AGENTS ...................................................... 69
AUDITORS, TRANSFER AGENT AND REGISTRAR ...................................................................... 69
MATERIAL CONTRACTS .................................................................................................................... 69
EXPERTS .................................................................................................................................................. 70
RELATIONSHIP BETWEEN THE COMPANY'S PROFESSIONAL PERSONS AND EXPERTS
.................................................................................................................................................................... 70
PURCHASERS' STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION ...................... 70
LIST OF EXEMPTIONS ......................................................................................................................... 71
GLOSSARY .............................................................................................................................................. 72

008226000-00082763; 17

PROSPECTUS SUMMARY
The following is a summary of the principal features of the Offering and should be read together with the
more detailed information and financial data and statements contained elsewhere in this prospectus.
The Company
Red Eagle Mining Corporation is a gold and copper mineral exploration and development company
focused exclusively in Colombia. The Company has agreements to acquire three material properties, all
of which are early exploration properties and without any drilling undertaken to date. The Company's
interests in its material properties are as follows:
(a)

an option to acquire 100% interest in the Santa Rosa gold project;

(b)

an earn-in for a 70% joint venture in the Pavo Real gold project; and

(c)

an option to acquire 100% interest in the Mina Vieja copper and gold project.

The Company believes that Colombia is now the gold exploration country of choice, with improving
security, political stability and a modern mining code. Up until the 20th century, 30% of the world's gold
came from Colombia, and until very recently Colombia's gold potential has remained largely untouched
in terms of modern exploration. According to The Fraser Institute, Colombia is now ranked first in
geological potential, nineteenth in political potential (third in South America) and seventh last year for
gold exploration spending.
The Company has been active in seeking mineral resource opportunities since its incorporation in
January of 2010. The Pavo Real Project was optioned by the Company in the second quarter of 2010,
and the Santa Rosa and Mina Vieja Projects were optioned in the fourth quarter of 2010. The
Company's success in securing these opportunities is due, in part, to its directors and management team,
who have extensive experience in the minerals industry, and have assembled a very competent team in
Colombia with all senior geologists having over 15 years of exploration experience. As of April 2011,
the Company had over $5 million in cash. The Company intends to commence an aggressive drill
program on its three main projects in 2011.

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

008226000-00082763; 17

ii

Figure 1
Santa Rosa Project
The Santa Rosa Project is located northwest of Medellin in Antioquia Province of Colombia, with easy
access by paved road (70km) and gravel road (15km). The Company has an option to acquire 100% of
the tenements covering 1,488ha plus 3,060ha under application for US$8.2 million by November 2013.
The Santa Rosa property was sluice-mined extensively for gold during the Spanish Empire, and more
recently was mined with near surface adits. After surveying the sluiced-out areas and adits, trends of
NE/SW and EW mineralised structures have become evident. These structures tie in with data obtained
from the aerial magnetic survey conducted by the Company over the project area which indicates a
magnetic low intensity intrusive that has been hydrothermally altered to an amphibolite with destruction

008226000-00082763; 17

iii
of magnetic iron. Mapping and sampling of the near surface adits, and ground geochemistry is currently
on-going with results to date showing a correlation with magnetics and old workings. Since the
beginning of 2011, the Company has surveyed 245 adits (6km total length) and over 60 colonial sluice
workings. An exploration program is planned for 2011 with total direct exploration expenditures
estimated at US$4.5million, including 10,000 metres of diamond drilling.
Although there has been insufficient exploration to date to define a "mineral resource" within the
meaning of NI 43-101 and it is uncertain if further exploration will result in the delineation of mineral
resources, the Company believes that the Santa Rosa Project has the potential to develop into a
significant bulk tonnage resource taking into account the stockwork or vein systems. The high grade
narrow vein systems contain significant gold occurrences in their own right - in the SE area of the
tenements three veins over an area of 100 metres total width are well known. A check sample by the
Company of one such vein assayed 96 grams/tonne gold. These veins appear to extend laterally over
considerable distance. Infrastructure is good in the region with a major town (Santa Rosa de Osos)
nearby. The topography is gently undulating hills which is conducive to valley fill tailings deposition or
heap leach sites. Water is also abundant from underground sources. Security in the area is good, and
agriculture is quite limited. The Company expects that drilling under the oxidised zone will determine
the extent of economic primary mineralisation contained within the vein stockwork system.
Pavo Real Project
The Pavo Real Project established the Company's presence in Colombia, with the negotiation of a joint
venture with Miranda in early 2010. This project is located approximately 20km south of Ibague, the
capital of Tolima Province, and is accessed by paved road and gravel road (5km). The Company has an
earn-in joint venture to 70% of the Pavo Real Project by completing a feasibility study, incurring a
minimum of US$4 million in capital contributions on the Pavo Real Project over four years, issuing
700,000 Common Shares, and paying US$400,000 cash in installments between 2010 and 2015. The
original joint venture covered five tenements totaling 2,594ha; subsequently a further five applications
totaling 1,402ha have been added under the area of interest agreement. The main primary gold areas
have been intermittently mined by artisanal miners exploiting narrow high grade gold bearing veins and
fault zones in the sedimentary host rock. The mineralisation is not confined to just one sedimentary rock
type, hence demonstrating potential for a strong, extensive system of pervasive gold mineralisation with
high fracture and vein density and possible dissemination. An initial aerial magnetic survey and surface
rock chip and channel sampling have yielded positive results. An exploration program is also planned
for the Pavo Real Project for 2011, with total direct exploration expenditures estimated at US$2.0
million, including 5,250 metres of diamond drilling.
Although there has been insufficient exploration to date to define a "mineral resource" within the
meaning of NI 43-101 and it is uncertain if further exploration will result in the delineation of mineral
resources, the Company believes that the Pavo Real project could offer the potential for a large resource.
The Company intends to further consolidate the existing 3,996ha land position once the current
tenements and surrounding areas are mapped to determine the extent of mineral potential. Infrastructure
is limited in the area, but regional centres such as Rovira and Ibague (20km south) will provide labour
and supplies support. Security in the area is sound, and agriculture is almost non-existent. The
continued high quality assays from both rock chip and adit sampling have been very encouraging for the
intended drill program. The initial drill sites have been selected as a result of the mapping and sampling
conducted to date.
Copper Skarn Projects
The copper skarn deposits (including the Mina Vieja Project) lie along a skarn trend extending at least
15km NE of the Pavo Real Project. A number of small local marble and limestone quarrying operations

008226000-00082763; 17

iv
lie along this trend. The skarn is formed by a younger massive intrusive to the East of the limestone
deposit. The Mina Vieja Project had a moderate sized copper mining and processing operation in the
early 70's; it is reported the mine averaged 2.5% copper and 1.5 grams/tonne gold, which corresponds to
sampling undertaken by the Company. Information at hand indicates an ore body strike length of at least
350 metres and a thickness of 20 to 30 metres, dipping at 57O. Mining took place to an estimated depth
of 100 metres, which is still above the water table and river valley floor below the outcrop. The
Company expects the mineralization to continue at depth and the Company believes that it is conducive
to a decline-accessed underground mining operation. The Company intends to fully map the skarn
trend, consolidate a land position according to the results, and in parallel conduct a drilling program
under the old mining operation to confirm the depth extension of the known deposit. An exploration
program with direct exploration expenditures of US$0.6 million, including 2,500 metres of diamond
drilling, is planned for 2011.
Although there has been insufficient exploration to date to define a "mineral resource" within the
meaning of NI 43-101 and it is uncertain if further exploration will result in the delineation of mineral
resources, the Company believes that the Mina Vieja Project has the potential to develop into a relatively
high grade copper and gold resource. Future consolidation of the land position could increase the
resource potential, and the size of a possible future copper mining operation. The fact that a modest
mining and processing operation took place in the past is encouraging.
The Offering
The Company is offering Offered Shares for sale in the Selling Provinces, at the Offering Price of $
per Offered Share, subject to exercise of the Over-Allotment Option. See "Plan of Distribution".
Over-Allotment Option
The Company has granted to the Agents the Over-Allotment Option exercisable in whole or in part, at
the discretion of the Agents, for a period of 30 days following the closing of the Offering, to purchase or
arrange for the purchase of up to such number of Additional Shares as is equal to 15% of the aggregate
number of Offered Shares sold under the Offering at the Offering Price.
Use of Proceeds
The Company will receive aggregate net proceeds (after payment of the Agents' Commission and
estimated expenses of the Offering) of $ from the sale of Offered Shares pursuant to this Prospectus
(assuming no exercise of the Over-Allotment Option). These funds will be combined with the
Company's working capital of approximately $5,375,000 as at April 15, 2011, for total available funds
of $ which will be used by the Company as follows:
Funds to be Used ($)

To pay the property payments due under the Option Agreements for the next
twelve months as follows:

Santa Rosa (US$3,000,000)

Pavo Real (US$50,000)
Mina Vieja (US$135,000)

008226000-00082763; 17

$
$
$

v
Completion of proposed Stage 1 and Stage 2 exploration programs on the
Company's properties as follows:

$
$
$

Santa Rosa (US$4,533,500)

Pavo Real (US$2,054,000
Mina Vieja (US$598,000)

For future acquisitions in order to consolidate the districts surrounding the

Pavo Real and Santa Rosa Projects

$4,700,000

To provide funding sufficient to meet administrative costs for 12 months

$1,200,000

To provide general working capital to fund ongoing operations

Total:

See "Use of Proceeds". The Company intends to spend the funds available to it as stated in this
Prospectus. There may be circumstances, however, where for sound business reasons a reallocation of
funds may be necessary.
Risk Factors
An investment in the Shares qualified under this Prospectus is subject to certain risk factors that should
be considered by prospective investors and their advisors, including:
Exploration and development of mineral deposits involves a high degree of risk which even a
combination of careful evaluation, experience and knowledge may not eliminate. The Company's
interest in its properties is subject to the terms of the applicable Option Agreements. Any failure by the
Company to obtain, or retain, title to the properties under the terms of the Option Agreements, could
have a material adverse effect. The Company does not maintain insurance against title and cannot give
any assurance that title to properties it has acquired will not be challenged or impugned and it cannot
guarantee that it will have or acquire valid title to the properties. The Company does not currently have
mineral properties in production and as a result, the Company is and will continue to be subject to all of
the risks associated with establishing new mining operations. The Company's business is strongly
affected by the world market price of gold, which is subject to volatile price movements that are affected
by numerous factors, all of which are beyond the Company's control. The Company has a history of
losses and there can be no assurance that it will ever be profitable. Few properties which are explored
are ultimately developed into producing properties. . The mining industry is subject to significant risks
and hazards, most of which are beyond the Company's control, and which could have an adverse effect
on the Company's financial performance, liquidity and results of operations.
The operations of the
Company and the Option Agreements require approvals, licences and permits from various regulatory
authorities that are by no means guaranteed. The mining industry in Colombia is subject to extensive
controls and regulations, amendments to which could have a material adverse impact on the Company.
The Company's property interests and proposed exploration activities in Colombia are subject to
political, economic and other uncertainties which could have a significant negative effect on the
Company. The Company competes with other parties with greater financial, technical and other
resources than the Company and there is no assurance that the Company will continue to be able to
compete successfully in acquiring exploration and development rights to properties. The Company's
exploration and development activities are subject to regulation under environmental laws. The ability
of the Company to identify, negotiate and consummate transactions is dependent on the Company's
management team and the loss of service of any member could adversely affect the Company. Given
the current levels of demand for equipment and personnel within the mining industry, there is no
assurance that the Company will be able to acquire the necessary resources to successfully implement its

008226000-00082763; 17

vi
business plan. The Company's directors and officers serve as directors and officers of other companies
which participate in the same business as the Company and therefore such directors and officers could
have conflicts of interest. The market price of the Common Shares can be subject to wide fluctuations.
There can be no assurance that restrictions in repatriation of earnings from Colombia will not be
imposed in the future. There is no assurance that the Company will be able to obtain additional funding
which may be required to complete any proposed or future exploration and development on its
properties, which could cause the Company to reduce or delay its proposed activities. Substantially all
of the Company's assets are located outside of Canada and it may be difficult or impossible to enforce
judgments granted by a court in Canada against the assets of the Company. It is unlikely the Company
will pay dividends in the immediate or forseeable future. Weather, sabotage, terrorism, community,
government or other interference with the maintenance or provision of infrastructure necessary for the
Company's operations could adversely affect the Company. A failure by a joint venture partner to meet
its obligations to the Company or third parties could adversely affect the Company. The Company's
operations in Colombia make it subject to foreign currency fluctuations which could adversely affect the
Company's financial position and results. The Offering Price significantly exceeds the net tangible book
value per share and investors will suffer immediate and substantial dilution of their investment. The
securities markets in the United States and Canada have experienced a high level of price and volume
volatility in recent years and the value of the Common Shares will be affected by any continued
volatility. Events caused by turmoil in world financial markets may have an adverse effect on the
Company's operations and the trading price of its Common Shares.
Investing in the Shares is
speculative and involves a high degree of risk due to the business and present stage of exploration of the
Company's mineral properties. Current global markets and financial conditions have been characterized
by volatility which may impact the Company's ability to obtain financing in the future on terms
favorable to the Company, and which may also cause decreases in asset values.
See "Risk Factors".
Summary of Financial Information
The following selected financial information is subject to the detailed information contained in the
financial statements of the Company and notes thereto appearing elsewhere in the Prospectus and should
be read in conjunction with the financial statements and related notes.

Period from January 4, 2010

(date of inception) to
December 31, 2010

Revenues
Comprehensive Loss for the Period

$1,633,506

Total Assets

$6,582,216

Total Liabilities
Shareholder's Equity

008226000-00082763; 17

Nil

$125,722
$6,679,962

vii
See "Selected Financial Information and Management's Discussion and Analysis".
Currency
Unless otherwise indicated, all currency amounts herein are stated in Canadian Dollars. See
"Currency Presentation and Exchange Rate Information".

008226000-00082763; 17

viii

CAUTION REGARDING FORWARD-LOOKING STATEMENTS

Except for statements of historical fact relating to the Company, certain statements in this Prospectus may
constitute forward-looking information, future oriented financial information, or financial outlooks
(collectively, "forward-looking information") within the meaning of Canadian and United States
securities laws. Forward-looking information may relate to this Prospectus, the Company's future outlook
and anticipated events or results and, in some cases, can be identified by terminology such as "may",
"will", "could", "should", "expect", "plan", "anticipate", "believe", "intend", "estimate", "projects",
"predict", "potential", "targeted", "possible", "continue" or other similar expressions concerning matters
that are not historical facts and include, but are not limited in any manner to, those with respect to
commodity prices, mineral resources, mineral reserves, realization of mineral reserves, existence or
realization of mineral resource estimates, the timing and amount of future production, the timing of
construction of any proposed mine and process facilities, capital and operating expenditures, the timing of
receipt of permits, rights and authorizations, and any and all other timing, development, operational,
financial, economic, legal, regulatory and political factors that may influence future events or conditions,
as such matters may be applicable. In particular, this Prospectus contains forward-looking statements
pertaining to the following:

Proposed expenditures for exploration work, and general and administrative expenses (see "Use
of Proceeds" for further details);

Expectations generally regarding completion of this Offering and the ability to raise further
capital for corporate purposes; and

Treatment under applicable governmental regimes for permitting and approvals (see "Risk
Factors").

Such forward-looking statements are based on a number of material factors and assumptions, including,
but not limited in any manner to, those disclosed in any other of the Company's public filings, and include
the ultimate determination of mineral reserves, if any, the availability and final receipt of required
approvals, licenses and permits, sufficient working capital to develop and operate any proposed mine,
access to adequate services and supplies, economic conditions, commodity prices, foreign currency
exchange rates, interest rates, access to capital and debt markets and associated costs of funds, availability
of a qualified work force, and the ultimate ability to mine, process and sell mineral products on
economically favourable terms. While the Company considers these assumptions to be reasonable based
on information currently available to it, they may prove to be incorrect. Actual results may vary from
such forward-looking information for a variety of reasons, including but not limited to specific risks and
uncertainties disclosed in this Prospectus. See "Risk Factors". The Company has no policies or
procedures for updating forward-looking information. Forward-looking statements are based upon
management's beliefs, estimates and opinions on the date the statements are made and, other than as
required by law, the Company does not intend, and undertakes no obligation to, update any forward
looking information to reflect, among other things, new information or future events.
Investors are cautioned against placing undue reliance on forward-looking statements.
ELIGIBILITY FOR INVESTMENT
In the opinion of Blake, Cassels & Graydon, LLP, counsel to the Agents, the Offered Shares, if issued on
the date hereof, would be qualified investments, under the current provisions of the Income Tax Act
(Canada) (the "Tax Act") and the regulations thereunder, for a trust governed by a registered retirement
savings plan, a registered retirement income fund, a deferred profit sharing plan, a registered education

008226000-00082763; 17

ix
savings plan, a registered disability savings plan and a tax-free savings account (''TFSA'') provided that,
at the time of the issuance of the Shares, such Shares are listed on a designated stock exchange (which
includes the Exchange).
Notwithstanding the foregoing, a holder of Offered Shares will be subject to a penalty tax if the Offered
Shares are held in a TFSA and are a "prohibited investment" for a TFSA under the Tax Act. However,
the Offered Shares will not be prohibited investments for a TFSA held by a particular holder provided the
holder deals at arm's length with the Company for the purposes of the Tax Act, and does not have a
"significant interest" (as defined in the Tax Act) in either the Company or a corporation, partnership or
trust that does not deal at arm's length with the Company for purposes of the Tax Act. Holders should
consult their own tax advisors as to whether the Offered Shares will be a prohibited investment in their
particular circumstances.
The 2011 Federal Budget proposes to extend the concept of "prohibited investment" to registered
retirement savings plans and registered retirement income funds. Holders should consult their own tax
advisors in this regard.
CURRENCY PRESENTATION AND EXCHANGE RATE INFORMATION
Unless otherwise specified herein, all references to dollars in this Prospectus are references to Canadian
dollars. References to "US$" are to United States dollars.
The closing, high, low and average exchange rates for one US$ (based on the noon buying rates) in terms
of Canadian dollars for each of the three years ended December 31, 2010, 2009 and 2008, as reported by
the Bank of Canada were as follows:
2010

2009

2008

Closing

0.9946

1.0466

1.2246

High

1.0778

1.3000

1.2969

Low

0.9946

1.0292

0.9719

Average

1.0299

1.1420

1.0660

As at , the noon buying rate as reported by the Bank of Canada was US$1.00 = $ or $1.00 = US$.
The closing, high, low and average exchange rates for one Colombian Peso (or COL$) in terms of
Canadian dollars for each of the three years ended December 31, 2010, 2009 and 2008, as reported by
OANDA Corporation were as follows:
2010

2009

2008

Closing

.00051

.00051

.00055

High

.00060

.00058

.00062

Low

.00049

.00049

.00049

Average

.00055

.00054

.00055

As at , the published rate as reported by OANDA Corporation was COL$1.00 = $ or $1.00 = COL$.

008226000-00082763; 17

CORPORATE STRUCTURE
NAME AND INCORPORATION
The Company was incorporated under the laws of the Province of British Columbia on January 4, 2010
under the name Red Eagle Mining Corporation. The Company's registered office is located at Suite 1600
609 Granville Street, Vancouver, British Columbia, V7Y 1C3. The Company's head office is located at
Suite 920 1030 West Georgia Street, Vancouver, British Columbia V6E 2Y3. The Company's principal
business is the acquisition and exploration of resource properties located in Colombia. See "Business of
the Company".
INTERCORPORATE RELATIONSHIPS
The Company currently has two subsidiaries, Red Eagle Mining de Colombia Limited, (a wholly owned
British Columbia subsidiary) and Rovira Mining Limited (MAD III) (a 70%-owned British Columbia
subsidiary).

RED EAGLE MINING CORPORATION

(BRITISH COLUMBIA)

100%

70%

RED EAGLE MINING de

COLOMBIA
(British Columbia)

Santa Rosa
Project(1)

ROVIRA MINING LIMITED

(British Columbia)
("MAD III")

Pavo Real Project(1)

Mina Vieja
Project(1)

Notes:
(1) The Company has options to acquire each of these projects, see the detailed description of each project under "Business of the Company".

BUSINESS OF THE COMPANY

The Company is a growth-oriented, Canadian-based gold company, focused on exploring and developing
gold properties in Colombia. The Company currently has interests in several exploration and
development projects, of which the Santa Rosa Project, the Pavo Real Project and the Mina Vieja Project
are currently the Company's focus.
To fund its exploration activities to date and to provide working capital the Company has so far relied on
the sale of Common Shares from treasury. Since incorporation, the Company has raised $9.25 million
privately through the sale of its Common Shares (see "Prior Sales"). The Company intends to raise
008226000-00082763; 17

2
additional funding under the Offering to carry out additional exploration on its properties as set out in the
section entitled "Use of Proceeds".
INFORMATION REGARDING COLOMBIA
Regulatory Matters
In Colombia, all mineral rights are the property of the government of Colombia. Obtaining a mining right
does not transfer ownership of the mineral estate, but creates a temporary right to explore and benefit
from minerals in exchange for royalty payments so long as the mining title remains in good standing.
Under Colombian mining law, foreign individuals and corporations have the same rights as Colombian
individuals and corporations, and Colombian governmental regulatory bodies are specifically prohibited
from imposing any additional or different requirements than would be required of a Colombian individual
or corporation.
Mineral property rights are governed by the Colombian Mining Code, which has been subject to various
changes and amendments. Under Colombian mining law, the holder of surface or subsurface minerals,
whether operating on government or private property, is subject to the legal requirements established
under the 1988 Mining Code and the Colombian Mining Law 685 of 2001 (the 2001 Mining Code), as
amended by Mining Law 1382 of 2010. The 1988 Mining Code is currently applied to those licences
granted during the period it was in effect and prior to the effective date of the 2001 Mining Code. It is
also applied to those applications made during its pendency but still under administrative proceeding
when the 2001 Mining Code came into force, where the applicant did not request to be subject to the new
regulation.
The 1988 Mining Code establishes four types of mining title: permits, exploration licenses, exploitation
licenses and concession contracts. An exploration license grants the holder the exclusive right to perform,
in a prescribed area, work directed to identifying commercially exploitable mineral deposits and reserves.
There are three types of exploration licenses: small, medium, and large mining activity licenses. The type
of exploration license is determined by the anticipated volume or tonnage of materials to be extracted
from the mine to be developed on the property. During the term of the exploration license, reports on
work performed on the property must be filed with the Ministry of Mines and Energy. The Ministry of
Mines and Energy subsequently makes a definitive project classification based on the information filed.
The Ministry of Mines and Energy has the right to reclassify the project every five years during the
exploration phase. There is a maximum size area for each type of exploration license.
On expiry of an exploration license for small mining activity and any extensions thereof, the license can
be converted, on compliance with prescribed conditions, into an exploitation license. An exploitation
license has a term of ten years. On its expiry, the holder can apply for a ten year extension or conversion
of the license into a concession contract. On expiry of an exploration license for medium and large
mining activities and any extensions thereof, the license is required to be converted to a mining
concession on compliance with prescribed conditions. There are two types of mining contracts:
concession contracts issued by the Ministry of Mines and Energy and those contracts issued by entities to
which the Ministry of Mines and Energy has assigned its rights. A concession contract gives the holder
the exclusive right to extract certain minerals and conduct the activities necessary for exploitation,
transport and shipment of the same. Concession contracts have a term of 30 years.
In June 2001, the 2001 Mining Code was enacted that somewhat simplifies and streamlines procedures
for concessions. The separation of concessions into three different levels for small, medium and large
mining no longer exists. There is now only one title which, once issued has a duration of 30 years and
under the 2001 Mining Code, could be extended for an additional 30 years, and further first rights for
subsequent periods of 30 years. However, this 30 year period was amended by Mining Law 1382 of
008226000-00082763; 17

3
2010, which established the possibility to obtain a non-automatic extension for a 20 year period. Within
the first 30 year period, there is an exploration phase of three years, with further and successive two year
extensions, for a maximum exploration phase period of eleven years. This is followed by a construction
phase of three years with a further one year extension. Despite these time limits, mining can start any
time within this phase. To obtain the requisite permits to explore and mine the necessary environmental
plans and report studies need to be presented and approved. Companies were permitted to elect to
maintain existing claims under the 1988 Mining Code or elect to comply with the 2001 Mining Code.
Areas Excluded from Mining Activities
The 2001 Mining Code, as well as its amendments enacted on February 9, 2010 (the Mining Code
Amendments), provide for areas to be excluded from mining activities. This could materially affect
development of the infrastructure for the Company's projects as envisioned by any technical and
economic study. There is no assurance that development of the Company's projects will be permitted.
Should modifications to a project be required as a result of the exclusion of the area from mining
activities, it may result in additional costs and/or delays which could materially affect the commercial
viability and profitability of future operations. The current Mining Code Amendments are under
evaluation by the Constitutional Court in order to determine their compliance with the Constitution and
other law enactment formalities. Therefore, the Mining Code Amendments could be subject to a
declaration of unconstitutionality.
Environmental Laws and Regulations
All of the Company's exploration, potential development and production activities are subject to
regulation by governmental agencies under various environmental laws. These laws address emissions
into the air, discharges into water, management of waste, management of hazardous substances,
protection of natural resources, antiquities and endangered species and reclamation of lands disturbed by
mining operations. Environmental legislation in Colombia is evolving and the general trend has been
towards stricter standards and enforcement, increased fines and penalties for noncompliance, more
stringent environmental assessments of proposed projects and increasing responsibility for companies and
their officers, directors and employees.
Mining companies in Colombia are subject to the authority of the Ministry of the Environment, the
Regional Development Companies and certain municipalities and metropolitan districts. However, the
National Code of Renewable Natural Resources and Environmental Protection forms the basis of
environmental policy in Colombia and there is an interest in preserving certain natural resources from
development activities. The 2001 Mining Code requires an environmental mining insurance policy for
each concession contract. In addition, this provision requires that an environmental impact study (an
EIA) be presented to the Ministry of the Environment at the end of the exploration phase if the
concession is to proceed to the construction phase, and this must be approved and an environmental
license issued before the exploitation phase can begin. Exploitation may require additional permits,
including an environmental license, a permit for springs, a forest use permit, a certificate of vehicular
emissions, an emissions permit and a river course occupation permit.
Exploration on a mineral tenure which exceeds prospecting, mapping and sampling, requires the submittal
and approval of an Environmental Management Plan (PMA) which must include:

the work to be done (i.e., the number of drill holes, location, direction, depth, etc);

the proposed measures to prevent negative environmental impact that could be caused to the
environment or to the communities by the project;

008226000-00082763; 17

the monitoring plan of the project, in order for the environmental authorities to verify the
concessionaires compliance with environmental commitments and obligations during the
implementation of the PMA;

the contingency plan, which must contain the measures to prevent and to deal with emergencies
arising from the project;

the costs of the PMA and the costs of the project;

the schedule for the execution of the PMA;

the proposed points of diversion for water so appropriate water permits can be issued;

the location and number of settling ponds to prevent turbidity in the streams by drilling fluids;
and

the location of fuel and oil storage areas, away from streams and creeks.

During the exploration phase, along with a PMA, a mining company may be required to request before
the Regional Development Companies a permit for springs, a forest use permit, an emission permit and/or
a river course alteration permit. The preparation and filing of the PMA is normally the responsibility of
the drill contractor, and is typically approved in 15 to 30 days, up to a maximum of 90 days. There is no
bond requirement for exploration PMAs, and no site reclamation is required. While PMAs do not
require any authorization or environmental permits, any such work carried out in areas designated as
natural reserves are to be governed by those rules and restrictions.
As discussed above, an EIA must be submitted before an environmental licence is issued. The EIA has to
demonstrate the building and works plans environmental feasibility. Without approval of this study and
the issuance of the corresponding Environmental Licence, mining and exploration cannot commence. As
noted above, Article 280 of the 2001 Mining Code also requires a concession contract holder to obtain an
environmental mining insurance policy. During the exploration stage, the insured value under the policy
must be 5% of the value of the planned annual exploration expenditures and during the construction phase
the insured value under the policy must be 5% of the planned investment for assembly and construction
under the building and works plan. During the exploitation phase, the insured value under the policy
must be 10% of the product of the estimated annual production multiplied by the mine mouth price of the
minerals being produced, as fixed annually by the Colombian government. Article 280 of the Mining
Code provides for the possibility of requiring a guarantee of compliance with mining and environmental
obligations under the concession contract with real security. For licences or agreements to be maintained
under 1988 Mining Code, the holder has to obtain an insurance policy and the insured value must be 10%
of the estimated production for the first two years as established by the building and works plan. Further,
the policy must be maintained during the entire term of the licence or agreement.
Where there is a breach of environmental laws, an affected third party or the government may initiate
judicial action against a polluting entity, including actions for protection of civil rights, civil liability
lawsuits, class actions, group actions, executive or police measures and criminal filings. Environmental
laws are a matter of public interest and are not subject to settlement. Historically, environmental
authorities have taken a relaxed approach in the enforcement of environmental regulations. Recently,
growing concern with respect to the environmental sustainability of projects, undertakings and industrial
activities has resulted in increased enforcement and prosecution. Sanctions include daily penalties,
suspension or revocation of the license, concession, permit, or authorization, temporary or final closure of
the establishment, work demolition at the cost of the infringer, and confiscation of products or
implements used to commit an infringement.

008226000-00082763; 17

5
Taxes and Royalties
In Colombia, there are various government fees and royalties payable by mining titleholders. During the
exploration and construction phases, the holder of a concession contract must pay a property fee
equivalent to one Colombian minimum daily wage per hectare per year, from the first to the fifth year;
afterwards, the property fee will be increased for every additional two year period, as follows: for years 6
and 7, the property fee will be equivalent to 1.25 times the minimum daily wage per hectare per year; for
year 8, the property fee will be equivalent to 1.5 times the minimum daily wage per hectare per year The
fee is payable in advance per year upon the contracts execution. The fee is payable annually until the
commencement of commercial production from the property. A royalty is payable at an effective rate of
4% of the gross value of the minerals calculated at the mine mouth for gold, subject to certain deductions
and gross adjustments. The value per gram of gold and silver at mine mouth for the estimation of
royalties will be 80% of the average international price for the previous month, as published in the
London Metal Exchange. For underground mines, the royalty is payable when annual production exceeds
8,000 tonnes and, for open-pit mines, when annual production exceeds 250,000 cubic metres.
Under the 2001 Mining Code, Colombian staff of a mining company, as a whole, should receive not less
than 70% of the total payroll of qualified or of skilled personnel in upper management or senior level
staff, and no less than 80% of the value of total payroll of the subordinates. Upon prior authorization,
relief may be granted by the Ministry of Labour for a specified time to allow specialized training for
Colombian personnel.
SANTA ROSA PROJECT
On April 15, 2011, the Company entered into a purchase agreement (the "Santa Rosa Agreement") with
Miguel Angel Perez Villa, Luis Carlos Perez Villa and Carlos Augusto Escobar (the "Santa Rosa
Vendors") pursuant to which the Company was granted an option to acquire a 100% interest in the Santa
Rosa Project for aggregate payments of US$8.2 million.
Pursuant to the Santa Rosa Agreement, the Company made an initial payment of US$300,000 on October
18, 2010 and a payment of US$400,000 on February 28, 2011. The Company can complete its
acquisition of up to 100% of the project by making the following additional payments:
Cash Payments

Required Payment

Upon transfer of title

US$3,000,000

On or before November 30, 2013

US$4,500,000

Total

US$7,500,000

The Company will be required to pay to the Santa Rosa Vendors the greater of US$2 million or US$15
per resource ounce of gold in the measured and indicated categories on a pre-determined 20ha area, as
determined by exploration conducted by the Company and in accordance with resource estimates
prepared in accordance with NI 43-101 by an independent geologist appointed by agreement between the
Company and the Santa Rosa Vendors. The Santa Rosa Vendors have executed all the necessary
documents to assign the Santa Rosa concessions to the Company.
The information below is based on the technical report titled "An Assessment of the Santa Rosa Gold
Project" dated March 31, 2011 (the "Santa Rosa Report"). Reference should be made to the full text of
the Santa Rosa Report which is available for review on SEDAR located at www.SEDAR.com.

008226000-00082763; 17

6
Property Location
The Santa Rosa Project is located approximately 5km southeast of the town of Santa Rosa De Osos, in the
municipality of the same name, in the Department of Antioquia, 70km north of the department capital
Medelln in Colombia, South America.
Property Description
The Santa Rosa Project comprises a total area of 4,549.14ha in four concession contracts numbered
B7560005, B7171005, H5791005 and H5790005 and one concession application numbered LDM-08061
(Figure 2 below; Table 1 of the Santa Rosa Report). Three of the concession contracts are contiguous
(H5790005, H5791005 and B7171005). The remaining concession contract (B7560005) and concession
application (LDM-08061) are located nearby to the east but surrounded by ground belonging to others
(Figure 2 below and Figure 4 of the Santa Rosa Report).

Figure 2
Further concession contracts H6771005 (Santa Marta property located inside concession application
LDM-08061) and LKA-08004 are under agreements to purchase and these contracts are presently being
finalized.
Accessibility, Climate, Local Resources, Infrastructure and Physiography
Topography in the Santa Rosa de Osos district is an irregular, dissected peneplain with gentle to steep
sided valleys and hills. Altitudes range between about 2300 and 2500 metres. The region is largely
occupied by grass pasture and arable land with limited and often isolated areas of lush, low-growth
Andean forest, mostly located along drainages. Agriculture within the project area comprises cattle
farming in about 50% of the project area and tamarillo (tree tomato) cultivation in approximately 10% of
the area, mostly in the south east. There is also minor commercial forestry (pine). Tropically weathered
latosol profiles are ubiquitous and average five to ten metres thick in undisturbed areas.
The Santa Rosa Project is easily accessible from the city of Medellin which has an international/national
airport. The principal access to the project is Medelln Barbosa Don Matas Santa Rosa for a total
008226000-00082763; 17

7
72km (1.5 hours) on asphalt highway then by a network of gravel roads to the properties (30 minutes).
Access within the properties is by gravel roads and footpaths.
The project area is located about 5km east of the town of Santa Rosa de Osos (population 16,000 in the
town and the same in the surrounding municipality). Security is provided in the district by a military base
(Guadalupe) and troops (Batalln altos de Cuiva). Police patrol the town of Santa Rosa de Osos and
vicinity.
Climate is mildly tropical with daytime temperatures around 14C. Yearly rainfall averages about 200
centimetres and falls mostly during rainy seasons from March to May and September to December.
There are no significant climatic restrictions on working.
Local resources and infrastructure in the Santa Rosa de Osos district are good. Electricity is widely
available via a local grid with a possible three phase supply (220 volt). Water is abundant in main rivers
but is not potable. Unskilled labour is available locally. Level valley floors are available for tailings
storage and waste disposal, heap leach pads and mineral processing sites.
History
Gold mining in the Department of Antioquia pre-dates, and continued during, Spanish colonial rule
mostly exploiting alluvial deposits and oxidized veins. Santa Rosa de Osos was discovered in 1541 by
Captain Juan Francisco Vallejo who named the area Valley of the Bears (de Osos) because of the large
number of the animals found in the region. Fifty years later the gold potential of the area was recognised
and hundreds of miners led by Captain Antonio de Espejo Serrano founded the town of Santa Rosa de
Osos (approved in 1636 by King Philip IV of Spain). Mines within the Santa RosaProject area reportedly
produced gold and silver from bonanza-grade oxide ores during their heyday in the 1940's but production
declined as free milling ores were exhausted. Small-scale gold mining continued intermittently and was
recently in operation at the Yaruma mine with an estimated average weekly production of about 50 grams
gold (unpublished report by Oscar Alejandro Garcia Alvarez, Ingeniero de Minas y Metalrgia). Mining
has now moved the adjacent Hilo Azul (Blue Vein) mine. Exploration and small scale gold mining by
artisanal miners in cooperation with the tenement owners is ongoing within the Santa Rosa Project.
There has been no known modern mineral exploration activity in the Santa Rosa Project prior to the initial
visit by the Company in July, 2010. Since that date the Company has undertaken preliminary exploration
including surveying and mapping of old mine workings as well as sampling and assaying in areas of
known mineralization, soil and saprolite grid geochemistry and airborne (magnetic and radiometric)
geophysics.
There are no known historical mineral resources or reserves figures for the Santa Rosa Project. Based
upon the existence of the extensive abandoned mine workings past gold production was significant but
actual gold production is unknown.
Geological Setting
Regional Geology
The northwest margin of South America comprising Colombia, and adjacent Ecuador and western
Venezuela, is a complex elongated mosaic of Palaeozoic and younger, autoch-thonous and allochthonous
terranes (Figure 3 below).

008226000-00082763; 17

Figure 3
These terranes were accreted to the South American continent (Guyana Shield) and subjected to
transpressional tectonics and subduction-related magmatism along a 2,000km-long segment of the Pacific
Rim; Figure 3 above and Figure 6 of the Santa Rosa Report). Regional-scale structural geology is
characterised by a suite of anastamosing, sub-parallel, Andean- (dominantly north-northeast-) striking,
transcurrent, major faults and shear zones, some of which are interpreted to be terrane boundary sutures
(Figure 3 above). Subduction-related magmatic arcs were superimposed on the above described terranes
during the Jurassic, Cretaceous, Eocene to late Miocene, and Late Miocene to Recent and are
characterised by plutonic batholiths, sub-volcanic intrusions and associated volcanic rocks (Figure 6 of
the Santa Rosa Report).
The Andean Cordillera in Colombia comprises three distinct mountain chains, the Western Cordillera
(Occidental), Central Cordillera (Central) and eastern Cordillera (Oriental) separated by broad interAndean valleys. The Santa Rosa gold project is located in the Central Cordillera within the Cajamarca-

008226000-00082763; 17

9
Valdivia terrane (Figure 3 above). This terrane dominates the geology of the northern portion of the
Central Cordillera and is a composite lithotectonic unit comprising a metamorphic basement complex and
the Antioquia batholith; Figure 3 above).
The Cajamarca-Valdivia terrane basement comprises early Palaeozoic metamorphic lith-ologies, mostly
lower greenschist to lower amphibolite grade metasediments, and oceanic ophiolitic volcanics and
intrusives. These comprise a para-autochthonous accretionary prism that was accreted to the continental
margin along the Palestina fault system in the Ordovician-Silurian and subsequently underwent regional
metamorphism. The CajamarcaValdivia terrane is bounded in the west by the Romeral fault, a northstriking, dextral transcurrent, terrane suture that defines the east limit of allochthonous oceanic terranes
accreted the northern Andean margin during the late Mesozoic and Cenozoic.
During the Mesozoic the Cajamarca-Valdivia terrane metamorphic basement was onlapped by volcanosedimentary lithologies. Reactivation of the Palestina fault system and initiation of the Romeral fault
system occurred from the Aptian-Albian, together with a period of uplift and erosion of the Palaeozoic
basement and Mesozoic volcano-sedimentary sequences. The basement and Mesozoic lithogies were
intruded by the Antioquia batholith during the Cretaceous under a regional tectonic regime of dextral
transpression.
The Antioquia batholith occupies more than 7,000km2 and is a subduction-related, multi-phase, calcalkaline, I-type plutonic intrusive complex composed mostly of quartz-diorite and granodiorite (Figure 7
of the Santa Rosa Report). Rock textures are holo-crystalline, medium to coarse grained and phaneritic
and mineralogy is dominated by plagioclase and quartz +\- potassium feldspar and up to 20% mafic
minerals ranging from biotite to hornblende dominant. Trace minerals include magnetite and titanite.
Local to regional-scale metasomatism is evident as chlorite after biotite and epidote after hornblende.
The batholith is cut in places by centimetre to metre scale dykes of porphyritic diorite, quartz diorite,
aplite and granite pegmatite. Small plugs of bipyramidal quartz- and biotite-phyric hypabyssal
granodiorite porphyry have been identified at various localities. Radiometric age dates are scattered from
around 90 to 60 Ma but cluster around 70 Ma.
The Antioquia batholith was intruded during dextral-oblique accretion and transpression of the Andes
during the late CretaceousEocene. Major lineaments, especially in the east, strike west-northwest to
northwest (Figure 7 of the Santa Rosa Report) and may be related to dextral reactivation of the Palestina
fault system in the east and dextral transpression along the Romeral fault system in the west.
Local Geology
Geology in the vicinity of the Santa Rosa Project comprises hornblende-biotite diorite and quartz diorite
typical of the Antioquia batholith. Metamorphic rocks including amphibolites (Pav) and metasediments
(Pms) occur as isolated outliers (Figure 8 of the Santa Rosa Report). Saprolite is widespread and
sometimes relatively deep (up to 50 metres) and Pleistocene-Holocene volcanic ash cover is extensive.
Soils are generally up to about 50 centimetres thick and rarely 2 metres. River valleys contain
unconsolidated alluvium.
Property Geology
Geology within the Santa Rosa Project is characterised by relatively monotonous, coarse grained, grey
coloured, granular hornblende-biotite diorite and quartz diorite (Figure 9; Plate 1 of the Santa Rosa
Report). Metamorphic rocks, including amphibolites (Pav) and metasediments (Pms), occur as isolated
outliers and fine grained basalt or andesite dikes are exposed in places. Red-brown coloured saprolite is
widespread and often deep. Soils are generally about 50 centimetres thick and rarely up to 2 metres.
Local river valleys contain unconsolidated alluvium. Schistose fault zone mylonite was observed at one
locality (Hilo Azul mine dump) associated with gold and sulphide mineralized quartz veins.
008226000-00082763; 17

10
Deposit Types
Gold mineralization at the Santa Rosa Project has characteristics in common with mesothermal or
orogenic and intrusion hosted gold veins. Mineralization of these types comprises quartz-carbonate veins
located in moderately to steeply dipping, brittle-ductile shear zones and locally in shallow-dipping
extension fractures. Veins commonly extend along strike and down dip for 100 to 1,000 metres and occur
alone or, typically, in complex vein networks. Vein minerals are mostly quartz and carbonates with
minor native gold, pyrite, and base metals sulphides. Ores are gold-rich (Au:Ag 5:1 to 10:1) and vertical
mineral zoning is usually absent despite the significant vertical extent of the veins (commonly >1km).
Veins are usually massive or ribbon-textured but vein breccias and drusy, crystalline quartz can also
occur. Wall-rock alteration is zoned and comprises carbonate (often ankerite), sericite, and pyrite.
Geochemistry is characterised by anomalous gold, silver and base metals in soils, rocks and stream
sediments. Faults and veins are often characterised by linear magnetic low anomalies as a result of
magnetite destruction by sulphides. Alteration and structural analysis can be used to delineate
prospective ground.
Individual deposits average 30,000 tonnes, and may be as large as 40 million tonnes, with grades of 16
grams/tonne gold and 2.5 grams/tonne silver. Veins are usually less than 2 metres wide and, therefore,
usually only amenable to underground mining. Deposits can be difficult to evaluate because of the gold
"nugget effect".
Plutonic intrusive-hosted mesothermal/orogenic vein deposits are usually small scale gold producers but
large deposits are known e.g. Pataz-Buldibuyo district in Peru (6 Moz gold) and the Bralorne-Pioneer
district in British Colombia, Canada (4 Moz gold).
Gold deposits of this type occur in Colombia at Gramalote in the Antioquia batholith 60km east-southeast
of the Santa Rosa Project (NI 43-101 compliant 2.39 Moz gold resource - B2Gold Corporation) and at
Frontino in the Segovia batholith 95km northeast of the Santa Rosa gold project (about 6 Moz historical
gold production; Wilson and Redwood, 2010).
Gold at the Santa Rosa Project was historically extracted from saprolite (and alluvial gravels) and
potential may exist for discovery of further such mineralization in the area. Saprolite gold deposits at
Santa Rosa have similarities to bulk mineable laterite and saprolite gold deposits in Australia and
elsewhere.
Exploration at the Santa Rosa Project is being planned to identify high grade quartz veins, sheeted veins,
and anastomosing vein networks that might represent bulk minable and/or high grade selective mining
targets.
Mineralization
Known mineralization within the Santa Rosa Project comprises narrow, gold-bearing, quartz-sulphide
veins best exposed in adits in old colluvial gold workings known locally as "baticiones". Abandoned
colluvial gold workings and adits are concentrated in two principal zones named the northwest zone and
the southeast zone (Figure 10 of the Santa Rosa Report). These zones contain large abandoned colluvial
workings and abandoned and some active tunnels made by artisanal miners (Figures 11 and 12 of the
Santa Rosa Report). 245 adits have been identified extending over 5.6km in developed length. The
northwest zone has more adits than the southeast zone. Gold ore is processed in local water-powered
California stamp mills with mercury amalgamation or, in the southeast zone, a jaw crusher and mercury
amalgamation mills.

008226000-00082763; 17

11
Quartz veins within the Santa Rosa gold project usually range from 0.3 to 1 metre wide (artisanal miners
report up to two metres). Quartz veinlets range from 2 to 5 centimetres wide and occur in places in
network zones up to 35 metres wide.
Two recently and currently producing, small-scale gold mines respectively named Yaruma and Hilo Azl
are located in the southeast zone (Figure 12; Plate 7 of the Santa Rosa Report). Mining here focused on
individual quartz sulphide veins. The Yaruma mine vein ranges from 0.18 to 0.35 metres wide, average
0.26 metres. The Hilo Azul vein ranges from 0.5 to 1.0 metres wide and is open along strike and down
dip. The Yaruma operation has ceased and operations recently moved to the Azul vein. Other historic
mines and mineralized showings are present within the vein-fault structure along strike. Recent
exploration has revealed other closely spaced mineralized veins and shoots.
Mineralized quartz veins and veinlets in the southeast zone at the Santa Rosa Project usually strike
approximately east-west. Reported strike and dip measurements are as follows:
Yaruma

N 95-105E, dip 75N

Yaruma

N100E, dip 85S

Yaruma

N 90E, dip vertical

Hilo Azul

N 95E, dip 85S

Hilo Azul

N 95E, dip 60N

Hilo Blanco

N 95-100E, dip 55N

Vein quartz textures are mostly massive to ribbon-textured and, in places, medium- to coarse-grained
crystalline and drusy. Sulphides range from 1% to 5% but can reach 10% (e.g. rock sample SR-004;
Appendix 6 of the Santa Rosa Report). Sulphides are dominated by fine- to coarse-grained pyrite with
subordinate galena and sphalerite and trace chalcopyrite and pyrhottite. Oxides include hematite, goethite
and limonite. Manganese oxides are common in places and are likely derived from hypogene
manganiferous carbonates. In the Yaruma mine the main ore minerals in decreasing order are galena,
pyrite and sphalerite with traces of chalcopyrite and pyrhottite. Gold and silver occur as inclusions in
sulphides most intimately associated with galena (70%) and less commonly as inclusions in pyrite and
sphalerite. The association of gold and galena is reported to cause problems for cyanide leaching the ore.
Analyses of veins throughout the Santa Rosa Project reportedly range from 23 to 55 grams/tonne gold.
Analyses of near surface ores from old workings reportedly yielded 7 grams/tonne gold. A sample (SR001) of quartz vein from Hilo Azul (Bernardina adit) returned values of up to 6.8 grams/tonne gold
(Figures 13 and 15 of the Santa Rosa Report). Silicified wall rock with disseminated sulphides returned
gold values from 0.3 to almost 0.5 grams/tonne (samples SR-002 and SR-003 respectively). A quartz
vein up to 1 metre wide located at shallow depth in Yaruma shaft (SR-004) returned 95.8 grams/tonne
gold.
Veinlet networks with dominant northwest and northeast strike orientations are well exposed in colluvial
workings. Zones of quartz veinlets and stringers have been measured up to 35 metres wide (e.g.
Bernardina adit; Figure 15 of the Santa Rosa Report). Two or three small groups of miners are reportedly
working adits (three observed to be active) in veinlet networks in saprolite in old colluvial workings
(baticiones).
Alteration at the Santa Rosa gold project is mostly silicic and argillic.

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Exploration
Geology
The Company has undertaken an extensive program of mapping and sampling old colluvial gold
workings ("baticiones" - Figures 10 to 12 of the Santa Rosa Report) as well as adits and quartz veins
within the Santa Rosa gold project area (Figure 13 of the Santa Rosa Report). These features have been
shown to cluster in two principal areas in the northwest and southeast of the project area (Figures 10 to 12
of the Santa Rosa Report).
Geochemistry
Quartz veins and diorite-granodiorite wall rocks exposed in artisanal adits and mines have been
extensively grab, channel and panel sampled. A total of 945 samples have been taken. Samples were
analysed by SGS laboratories in a standard package of gold plus 52 elements (see Appendix 6 of the
Santa Rosa Report). Results obtained to date range from below detection limit to 11.62 grams/tonne gold
(162 samples). Additionally, 39 samples returned values in the range 1 to 11.62 grams/tonne gold.
A 10 metre long channel sample taken (in July, 2010) across the footwall structure north of Hilo Azul
(Blue vein) returned reported values 2.75, 0.53, 0.41, 0.22, and 0.03, grams/tonne gold. The Bernadino
adit (an oxidised vein adjacent to Hilo Azul) was also sampled and returned 35 metres at 0.62
grams/tonne gold (Figure 15 of the Santa Rosa Report). Hilo Yaruma was previously sampled
underground at a depth of 65 metres and reportedly returned values of 95.8 grams/tonne gold in the vein
and 0.2 grams/tonne gold in part of the wall rock. The Hilo Yaruma shaft has since collapsed.
A program of continuous channel sampling in adits that cut across veins and structures was initiated in
January 2011. A total of 35 adits have been sampled to date but only results for two adits have been
returned from the laboratory (to February 28, 2011).
A 200 X 200 metre grid auger saprolite conventional geochemistry (45 samples) program was completed
over part of the southeast zone. Gold values are erratically distributed with only three returning values
between 0.3 and 0.5 grams/tonne gold (Figure 16 of the Santa Rosa Report).
A 50 (NS) X 200 metre (EW) soil grid mobile metal ion (MMI; 156 samples) sampling program was
completed over the same area as the saprolite grid geochemistry program in the southeast zone of the
Santa Rosa Project (Figure 17 of the Santa Rosa Report). The strongest MMI gold response corresponds
with the locations of the Bernardina adits (Hilo Azul vein; compare Figures 17 and 12 of the Santa Rosa
Report).
Geophysics
A helicopter-borne, high resolution, magnetic and radiometric survey was completed over the Santa Rosa
gold project area by MPX Geophysics on the 18th and 19th November, 2010 (Figures 18 and 19 of the
Santa Rosa Report). Initial interpretation of the results was received by the end of the same month. A
total of 451.9 line-km of data were acquired over the project area (total area 19.6 km). The survey was
flown at a nominal mean terrain clearance of 70 metres along north-south oriented flight lines spaced at
50 metres with tie lines spaced at 500 metres.
Consultants Paterson, Grant & Watson were retained by the Company to interpret the aeromagnetic
survey. Results were received in January 2011.
The stated goals of the aeromagnetic interpretation were:

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Definition and mapping of structures of importance in the area and that might have a role in gold
mineralization;

Lithological mapping based on the airborne magnetic data;

Overall refinement of the known geology of the area;

Definition of targets and areas of interest for an upcoming ground IP survey.

The Santa Rosa Project is interpreted to be located between two structural domains, a zone of northwest
striking faults in the east (Montel Oro, Nare and Balseadrero faults) and a zone of north-south striking
regional scale faults in the west (Espiritu Santo, Santa Rita, Sabana Larga). From the geophysical
interpretation it appears that extensive northwest striking faulting in the middle of the Santa Rosa gold
project meets with north-northeast and northwest striking faulting from west. A couple of northweststriking faults are evident with apparent vertical displacement. Magnetic data alone cannot easily
discriminate fault displacement but it appears that the eastern blocks have been normal faulted (down)
relative to the western blocks and is interpreted to indicate southwest-northeast extension.
Several lithological units have been interpreted from the magnetic data. The most important feature is a
northwest-striking magnetic anomaly (Figure 18 of the Santa Rosa Report) interpreted as various subunits of Palaeozoic amphibolite bounded by Palaeozoic quartz sericite schist and minor occurrences of the
main Cretaceous diorite-gabbro.
The abandoned colluvial gold workings and more recent adit excavations appear to correlate well with
magnetic low zones (Figure 18 of the Santa Rosa Report) that may indicate amphibolite occurrences or,
perhaps, hydrothermal alteration accompanied by magnetite destruction.
The main magnetic anomaly was modelled using ENCOM's Quickmag software. Two models were
generated both consisting of a series of tabular bodies with varying dip and magnetic susceptibility. Both
models show the same pattern of westward dip towards the southern edge of the anomaly and an eastward
dip towards the north. The dip of the bodies is very similar on both models, and the inflection from subvertical to eastward or westward dip usually is accompanied by an interpreted structure.
Based on modelling the apparent correlation of known mineralization with magnetic low anomalies and
structures a tight induced polarization ("IP") grid was recommended over the known gold occurrences in
the southeast. Further IP lines are recommended to cover the main amphibolite belt if and when the IP
and resistivity surveys are proven to be effective over the conductive saprolite layer characteristic of the
Santa Rosa gold project area. This survey will cover some known gold occurrences in the far northwest
of the project area and other prospective areas in the middle of the belt. The proposed IP survey
comprises 22 line-km.
Drilling
No historical drilling is known within the Santa Rosa Project and no drilling has been done by the
Company.
Sampling Method And Approach
Composite chip, channel and panel samples were taken from tunnel walls by the Company's geologists.
Mobile metals ions ("MMI") soil sampling was done by digging shallow pits 10-15 centimetres deep into
the "B" soil horizon on a 50 metre (NS) X 200 metre (EW) grid.

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Saprolite was sampled using an auger (to 5.5 metres maximum depth) on a 200 X 200 metre grid and
analysed using conventional geochemistry.
Sampling was done and/or supervised by the Company's geologists and conforms to industry-wide good
practices.
Samples are representative of mineralization at the Santa Rosa Project restricted only by available surface
outcrop and underground exposures. Deposits of this type often exhibit erratic gold distribution (the
"nugget effect") which can affect accuracy and repeatability of gold assay results in some instances.
Gold mineralization at the Santa Rosa Project occurs in relatively narrow (up to 2 metres wide reported)
quartz veins in homogeneous diorite country rock. Individual higher gold grade quartz veins have been
identified and sampled separately (Figure 14 of the Santa Rosa Report). Individual veins (0.3 to 1 metre
wide) reported from below detection limit to 11.62 grams/tonne gold (162 samples) of which 39 samples
retured values in the range 1 to 11.62 grams/tonne gold.
More dispersed (up to tens of metres wide) gold mineralized quartz veinlet zones have been satisfactorily
tested by channel sampling (two metre sample lengths; Figure 15 of the Santa Rosa Report). Channel
samples average 0.62 grams/tonne gold (uncut) over a 35 metre intersection it the Bernadina adit (Figure
15 of the Santa Rosa Report).
Sample Preparation, Analyses And Security
Sampling by the Company's geologists conforms to industry-wide good practice. Chain of custody is
maintained for all samples. Rock samples (average 2 kilograms) are placed in a plastic bag marked with
the sample number on both sides and on a piece of flagging tape (placed inside the bag) and sealed
immediately. The sample and sample location are then photographed. Bagged samples are put in larger
sacks in the field and when filled these are sealed in the field. Sample sacks are then securely transported
to the sample store. Every Saturday security personnel transport the sample sacks directly to the SGS
laboratory in Medellin together with the dispatch documents. The Company then communicates with the
laboratory to confirm receipt of the samples.
Saprolite auger samples are delivered to SGS Laboratory in Medellin for preparation then forwarded to
laboratories in Lima for analysis. MMI samples are delivered to SGS Medellin and forwarded directly to
Lima for preparation and analysis.
Analyses are undertaken by SGS Laboratory (gold fire assay plus 52 elements (ICP)) and duplicates
analysed by ALS Chemex (gold fire assay plus 35 elements (ICP)). Samples are prepared at their
laboratories respectively in Medellin and Bogota and 30 gram pulps forwarded to their laboratories in
Lima, Peru for analysis. Some samples are screened for coarse gold.
The author of the Santa Rosa Report did not conduct detailed investigative analysis of security, sample
preparation and analyses employed by the Company but he is familiar with the processes and laboratories
employed based upon work with other companies. The author of the Santa Rosa Report has, therefore, no
reason to doubt that security, sample preparation and analytical procedures at the Santa Rosa Project are
satisfactory and confirm to industry-wide good practice.
Data Verification
The author of the Santa Rosa Report reviewed and verified the results of the reconnaissance exploration
program completed to date and is of the opinion that the QA/QC protocols implemented by the Company
are appropriate for this type of exploration and allow a high level of confidence in the data. The author of

008226000-00082763; 17

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the Santa Rosa Report did not take any additional check samples on the property due to the limited nature
of the exploration completed to date.
The Company monitors QA/QC on all analytical work via the use of certified reference materials and
blank samples (both purchased in Canada) and field duplicates in addition to monitoring of internal
laboratory check-analyses. A duplicate, a standard and a blank are included with every 30 samples sent
for analysis.
MMI soil geochemistry samples are analysed by SGS and include a duplicate every 30 samples (no
blanks and no standards).
Adjacent Properties
Properties surrounding the Santa Rosa Project concessions are held by various mining and mineral
exploration companies and individuals (Figure 4 of the Santa Rosa Report). No information is available
regarding the status of exploration in these properties, however, no activity has been reported or
discovered by the Company employees in the area.
Mineral Processing And Metallurgical Testing
The Company did not conduct any studies on mineral processing nor did they perform any metallurgical
testing mineralized samples during the 2010/2011 exploration program.
Mineral Resource And Mineral Reserve Estimates
The Company did not perform any mineral resource or mineral reserve estimates during the 2010/2011
exploration program.
Other Relevant Data And Information
The author of the Santa Rosa Report is not aware of any further data and information relevant to the Santa
Rosa Project.
Interpretation And Conclusions
Geology within the Santa Rosa Project is dominated by relatively monotonous diorite and quartz diorite
of the Antioquia batholith.

The clustering of historical alluvial/saprolite gold workings (baticiones) and artisanal adits in the
northwest and southeast zones at the Santa Rosa Project suggests that hypogene gold mineralization at
these localities may be more extensive e.g. in sheeted and/or networked vein zones that could represent
potentially bulk minable targets.
Hypogene gold mineralization at the Santa Rosa Project occurs in relatively narrow (up to 2 metres wide
reported) quartz veins in homogeneous diorite country rock. Veins commonly strike approximately east
west and dip steeply north and south and are associated with sheared and mylonitic country rocks. The
latter probably represent high angle reverse faults indicating north-south directed compression consistent
with the dominant regional-scale tectonic regime of dextral strike-slip transpression.
Individual quartz-sulphide veins (0.3 to 1 metre wide) reported from below detection limit to 11.62
grams/tonne gold (162 samples) of which 39 samples returned values in the range 1 to 11.62 grams/tonne

008226000-00082763; 17

16
gold. Channel samples average 0.62 grams/tonne gold (uncut) over a 35 metre wide zone of quartz
veinlets in the Bernardina adit.
Geophysics (aeromagnetics) show a strong magnetic low striking approximately northwest across the
Santa Rosa Project area. This anomaly corresponds with the locations of known mineralization and may
be related to a major structure and associated hydrothermal alteration and sulphide mineralization.
Mesothermal/orogenic quartz vein gold deposits occur worldwide and are important past and present gold
producers. Deposits of this type can form near surface, potentially bulk minable laterite/saprolite gold
deposits under tropical weathering conditions.
The objectives of early stage exploration of the Santa Rosa Project undertaken by the Company to date
have been met. Exploration undertaken and data obtained have been of sufficient density and reliability
to confirm the occurrence of potentially economic gold mineralization. More detailed exploration will be
required to advance the project and to confirm or condemn its economic potential. Further exploration
will require more detailed geological mapping, geochemistry, geophysics, drilling, sampling and
assaying.
Recommendations
The following two stage exploration strategy is recommended for the Santa Rosa Project:
Stage 1 Exploration
(a)

detailed geological mapping, especially structural geology, and sampling/assaying of

quartz veins and quartz veinlet zones in trenches and adits;

(b)

further grid soil MMI and conventional saprolite geochemistry extended across the
project area; and

(c)

detailed ground magnetic and closely-spaced electromagnetic geophysics (induced

polarization resistivity/chargeability) to identify and generate drill targets in mineralized
(vein quartz) and hydrothermally-altered structures (vein and disseminated sulphides).

Total costs for Stage 1 exploration is estimated to be US$1.29 million as follows:

ITEM

COST US$

Detailed geological mapping structures

175,000

Sampling and assaying veins in trenches and adits

150,000

Grid saprolite/soil MMI and conventional geochemistry

125,000

Detailed ground magnetic and electromagnetic geophysics

60,000

Assays (600 MMI, 600 vein systems, 2,500 rock chip @$35)

129,500

Drafting and plotting

50,000

Consulting geologists

50,000

Field labour

125,000

Transportation and logistics

55,000

Administration

146,000

Capital equipment

224,500

008226000-00082763; 17

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ITEM
TOTAL

COST US$
1,290,000

Stage 2 Exploration
Should the results of exploration program stage 1 define the expected drill targets a stage 2 exploration
program consisting of a minimum of 12,000 metres of diamond core drilling (3 drill rigs) should be
initiated. A program of diamond drilling up to 12,000 metres and assaying is estimated to cost US$3.24
million as follows:
ITEM

COST US$

Drill mobilization

25,000

Drill site preparation, roads and access

75,000

Diamond drilling (12,000 metres @ $ 150/metre)

1,800,000

Assays (15,000 @ $32.5)

487,500

Drafting and plotting

125,000

Consulting geologists

100,000

Field labour

225,000

Transportation and logistics

123,000

Administration

246,000

Capital equipment

37,000

TOTAL

3,243,500

Total exploration costs for exploration Stages I and 2 are estimated at US$4.53 million.
PAVO REAL PROJECT
On June 25, 2010 the Company entered into a share purchase agreement (the "Pavo Real Agreement")
and shareholder agreement with Miranda and MAD I, pursuant to the which, MAD I sold 70% of the
shares of MAD III, a wholly-owned subsidiary of MAD I, to the Company in consideration for $1.00.
On June 25, 2010, the Company, Miranda, MAD I and MAD III also entered into a shareholders'
agreement (the "Pavo Real Shareholder Agreement") governing the activities of MAD III. Pursuant to
the Pavo Real Shareholder Agreement, the Company must make an aggregate US$4 million contribution
(the "First REM Contribution") to the contributed surplus of MAD III in the following amounts by the
following dates, in order to maintain its 70% interest in MAD III, all of which must be expended by MAD
III on exploration and concession fees and payments:
Exploration Expenditures
On or before June 25, 2011 (incurred)

US $500,000

On or before June 25, 2012

$750,000

On or before June 25, 2013

$1,000,000

On or before June 24, 2014

$1,750,000

Total

$4,000,000

008226000-00082763; 17

18
If the Company fails to make any of the First REM Contribution within the stated time periods, Red Eagle
will forfeit its shares of MAD III to Miranda.
After making the First REM Contribution, the Company is required to make further contributions to the
contributed surplus of MAD III as follows ("Second REM Contribution"):
1.

A contribution of at least US$1 million per year in the event that MAD III elects to undertake a
feasibility program to prepare a positive feasibility study in a form acceptable for the purpose of
financing mine construction, which annual minimum contribution shall be made by the Company
until the completion of such feasibility study, which feasibility study must be completed by June
25, 2018; or

2.

If MAD III does not undertake a feasibility program, or if MAD III commences a feasibility
program but does not complete a feasibility study, the Company shall contribute a minimum of
US$10 million in excess of the First REM Contribution at a rate of not less than US$1 million per
year, all of which shall be expended on exploration operations, development operations and
concession fees and payments and must be expended by June 25, 2020. Expenditures made by
the Company on an uncompleted feasibility study may be applied to these additional expenditure
requirements.

After making the Second REM Contribution, if the board of directors of MAD III has approved a
feasibility study and a mine construction program, the Company will have the option, but not the
obligation, to elect to acquire an additional 10% interest in MAD III by committing to sole fund all costs
associated with achieving the commencement of commercial production. The Company may exercise
this option (the "Pavo Real Additional 10% Option") by providing notice in writing to MAD III and
MAD I within 30 days of the date of such board of directors of MAD III approval. If the Company
exercises the Pavo Real Additional 10% Option, MAD III will issue additional shares from treasury
without payment to increase the Companys ownership percentage to 80%.
In addition to the First REM Contribution and the Second REM Contribution, the Company must also
reimburse MAD I or Miranda, as applicable, for concession fees paid to acquire the Pavo Real Property
and to assume and discharge all payments to be made and other obligations required to be discharged by
MAD III under the Pavo Real Option Agreement (as defined below). In addition, in the event Miranda
issues shares to Expogold under the Pavo Real Option Agreement, the Company is required to issue an
equivalent number of commons shares to Miranda, or to Miranda's direction. To date, the Company has
issued 200,000 Common Shares to Miranda.
Pursuant to the Pavo Real Shareholder Agreement, the Board of Directors of MAD III will be comprised
of three Directors, two of whom are nominees of the Company, and one is a nominee of MAD I. On any
matter to be decided by the Board of Directors of MAD III, the directors representing each shareholder
will be entitled to jointly cast one vote for each full 1% ownership interest held by the shareholder
represented by such directors. The shareholder holding the largest ownership interest in MAD III, will be
entitled to appoint the general manager over the operations of MAD III. In the event that the Company
fails to make any of the required capital contributions set out above, or fails to cause MAD III to expend
such contributions within the time periods set out above, the Pavo Real Shareholders Agreement shall be
terminated and the Company shall, at MAD I's election, either forfeit all of its shares in MAD III and
return them to treasury for cancellation, or transfer all of its shares in MAD III to MAD I. If a capital
contribution made by the Company has not been expended by its due date, the Company may pay the
amount of the deficiency within 30 days of receiving notice of the deficiency from MAD I, which when
so paid will be deemed to have been expended as required.

008226000-00082763; 17

19
If a shareholder elects not to participate in an exploration, development, mine construction or mine
program, or elects to participate and contribute less than its proportionate cost share, then its ownership
interest will be reduced on a proportionate basis. If at any time a shareholder's ownership interest falls
below 10%, then that ownership interest will automatically convert to a 0.5% net smelter royalty
The Pavo Real Shareholder Agreement also provides that any shareholder who acquires or agrees to
acquire any mineral or surface rights within the five km area surrounding the Pavo Real project must
notify MAD III of such acquisition and MAD III may, at the direction of the non-acquiring shareholder,
acquire such additional property interest.
Pursuant to an option agreement (the "Pavo Real Option Agreement") dated June 24, 2010 among
Expogold Colombia S.A. ("Expogold"), Miranda, Miranda Gold Colombia II Ltd. (Sucursal Colombia)
("MAD II Colombia"), the Colombia branch of MAD II and Miranda Gold Colombia III Ltd. (Sucursal
Colombia) ("MAD III Colombia"), the Colombian branch of MAD III, Expogold agreed to transfer the
Pavo Real Property to MAD III Colombia and MAD III Colombia agreed to pay to Expogold the
following amounts (which pursuant to the Pavo Real Shareholders Agreement, are now obligations of the
Company), and issue the following shares of Miranda.
Cash Payments
On or before June 24, 2010 (paid)

US $20,000

On or before December 24, 2010 (paid)

$20,000

On or before June 24, 2011

$50,000

On or before June 24, 2012

$60,000

On or before June 24, 2013

$70,000

On or before June 24, 2014

$80,000

On or before June 24, 2015

$100,000

Total

$400,000

Common shares to be issued

On or before June 24, 2010 (issued)

100,000

On or before December 24, 2010 (issued)

100,000

On or before June 24, 2011

100,000

On or before June 24, 2012

100,000

On or before June 24, 2013

100,000

On or before June 24, 2014

100,000

On or before June 24, 2015

100,000

Total

700,000

In addition, commencing on June 25, 2016, and payable on each succeeding anniversary, MAD III
Colombia must pay US$100,000 and deliver 100,000 common shares of Miranda to Expogold until the
date on which there is a defined measured and Indicated Mineral Resource within a defined area of
interest on the Pavo Real Property of greater than 250,000 total ounces of gold or gold equivalent, which
complies with an independent NI 43-101 compliant technical report (the "Pavo Real Defined

008226000-00082763; 17

20
Resource"). Once there is a Pavo Real Defined Resource, MAD III Colombia will be required to make
one of the following additional payments to Expogold:
(a)

If the Pavo Real Defined Resource is greater than 250,000 ounces, but less than 500,000
ounces, MAD III Colombia shall pay US$100,000; or

(b)

If the Pavo Real Defined Resource is equal to or greater than 500,000 ounces, MAD III
Colombia shall pay US$250,000.

In addition, MAD III Colombia shall pay to Expogold:

(a)

US$250,000 upon completion of a feasibility study;

(b)

US$500,000 upon achieving commercial production;

(c)

US$500,000 upon producing 250,000 ounces of gold or gold equivalent ounces;

(d)

US$750,000 upon producing 500,000 ounces of gold or gold equivalent ounces; and

(e)

US$1,000,000 upon producing 1 million ounces of gold or gold equivalent ounces.

Each of the above payments may be in cash or common shares of Miranda. Thereafter, MAD III
Colombia shall pay US$1 million for each 1 million ounces of gold or gold equivalent ounces produced.

The information in the section below is based on the technical report titled "An Assessment of the Pavo
Real Project" dated March 31, 2011 (the "Pavo Real Report"). Reference should be made to the full text
of the Pavo Real Report which is available for review on SEDAR located at www.SEDAR.com.
Property Description And Location
Property Location
The Pavo Real Project is located approximately 20km south of the city of Ibague, and lies mostly within
the municipality of Valle del San Juan, in the Department of Tolima, in Colombia, South America
(Figures 1 and 2 of the Pavo Real Report).
Property Description
The Pavo Real Project occupies 3,996.82ha. The main Pavo Real Project properties (original joint
venture with Miranda) are owned by three Colombian citizens who are legal representatives of ExpoGold
which has a joint venture with Miranda. These properties were leased to Miranda Gold Corporation and,
subsequently to the Company under power of attorney, in accordance with agreements signed between
Miranda and ExpoGold on June 25, 2010, and between Miranda and the Company on June 25, 2010.
These agreements covered concession contracts IHT-10541 and IHT-10542X, and concession agreements
KG3-14191, JLI-10231 and JG1-16101 (awaiting final signature from Ingeominas). The area of these
tenements totals 2,594.12ha.
Since the commencement of the main Pavo Real Project, four additional titles have been added to the
project, one under application (LGE-16201) in the name of a Colombian employee of the Company and
another under application (LAQ-14021) in the name of a representative of ExpoGold, totaling 1,264.30ha,

008226000-00082763; 17

21
and two concession contracts under an option agreement with a local Colombian title holder (907-73 and
656-73) totaling 138.40ha.
Some of the above properties are contiguous but most are separated by ground belonging to others (Figure
4 below, Table 1 of the Pavo Real Report).

REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

008226000-00082763; 17

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Figure 4

008226000-00082763; 17

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Accessibility, Climate, Local Resources, Infrastructure And Physiography
Topography in the Pavo Real Project area is moderately rugged with steep sided valleys and hills.
Altitudes range between 650 and 1300 meters.
Much of the area is under pasture and cultivation. Cattle farming is widespread followed by cultivation of
coffee, maize and sorghum and, to a lesser extent, citrus and avocados. Secondary forest is preserved in
sheltered areas of the Rio Luisa and major streams.
The Pavo Real area is accessible by road from the city of Ibague via the town of Rovira on paved roads
(35km) followed by gravel road (5km) to the finca (farm) of Pavo Real. An alternative route from Ibague
is via the municipality of Valle de San Juan (37km) then towards the town of Rovira (24km) on gravel
roads.
The project area is about 5km from the town of Rovira (population about 22,000). Security is provided
by a military base and troops. Police patrol the town and vicinity.
Climate is moderately warm (dry tropical forest) but varies with altitude. Temperatures range between 18
and 24oC. Rainfall averages 2010 mm per annum and humidity 60%. There are no significant climatic
restrictions on working in any part of the Pavo Real Project area.
Resources and infrastructure in the Pavo Real district are moderately good. An electrical grid is available
with connections for 110 and 220 volts. Water is widely available from local rivers and streams but must
be obtained by negotiation with local land owners.
Unskilled labour is available locally. Level valley floors are available in places for tailings storage and
waste disposal, heap leach pads and mineral processing sites particularly along broad areas in the Rio
Luisa valley.
History
Artisanal miners have been intermittently exploiting narrow, high grade gold bearing veins hosted in
sedimentary rocks within the Pavo Real concessions. Otherwise, nothing is known regarding past mining
history in the area.
ExpoGold (Colombian JV partner with Miranda) conducted some exploration in the project area in 2009
including rock chip, stream sediment and adit sampling. The Company signed a joint venture with
Miranda on June 25, 2010 for five Pavo Real tenements totaling 2,594.12ha.
Since that time an additional four tenements have been added to the Company and Miranda's joint venture
agreement under a five kilometer area of interest. These additional tenements total 1,402.70ha.
Geological Setting
Regional Geology
The northwest margin of South America comprising Colombia, and adjacent Ecuador and western
Venezuela, is a complex elongated mosaic of Palaeozoic and younger, autochthonous and allochthonous
terranes (Figure 4 of the Pavo Real Report). These terranes were accreted to the South American
continent (Guyana Shield) and subjected to transcurrent tectonics and subduction-related magmatism
along a 2,000km-long segment of the Pacific Rim (Figures 4 and 5 of the Pavo Real Report). Regionalscale structural geology is characterised by a suite of anastamosing, sub-parallel, Andean (dominantly
north-northeast) striking, transcurrent, major faults and shear zones some of which are interpreted to be

008226000-00082763; 17

24
terrane boundary sutures (Figure 4 of the Pavo Real Report). Subduction-related magmatic arcs were
superimposed on the above described terranes during the Jurassic, Cretaceous, Eocene to late Miocene,
and Late Miocene to Recent and are characterised by plutonic batholiths, sub-volcanic intrusions and
associated volcanic rocks (Figure 5 of the Pavo Real Report).
The Andean Cordillera in Colombia comprises three distinct mountain chains, the Western Cordillera
(Occidental), Central Cordillera (Central) and eastern Cordillera (Oriental), separated by broad interAndean valleys. The Pavo Real Project is located on the east flank of the Central Cordillera within the
Mesozoic Ibague block (Cediel et al., 2003; Figure 4 of the Pavo Real Report). The Mesozoic Ibague
block is part of the central continental subplate realm that dominates the central Cordillera of Colombia
(Figure 4 of the Pavo Real Report). The Triassic-Jurassic Ibague (and San Lucas) block is dominated by
composite metaluminous calc-alkaline diorite to granodiorite batholiths and associated volcanic rocks
generated on a modified continental basement composed of the Chicamocha and Cajamarca-Valdivia
terranes (Figure 4 of the Pavo Real Report).
Local Geology
Geology in the vicinity of the Pavo Real Project comprises a stratigraphic sequence of Lower Triassic red
bed siltstones, fine-grained arenites, conglomerates and breccias (Luisa formation) overlain by Upper
Triassic limestones with intercalated claystones, siltstones, calcareous shales and arentites (Payande
formation) overlain by Upper Triassic to Lower Jurassic tuffs, agglomerates and lavas occasionally
intercalated with red bed lithic arenites and siltstones (Saldana formation). This sequence is intruded by
Jurassic granodiorites (syenogranite to tonalite and quartz monzonites to quartz monzodiorites) of the
Ibague batholith (140-150 Ma) and associated minor intrusions (Figure 6 of the Pavo Real Report).
Property Geology
Geology observed by the author of the Pavo Real Report within the Pavo Real concession (JLI-10231)
comprises a stratigraphic sequence of indurated, polymict breccia/conglomerate (Luisa formation ?;
Figure 7, Plate 1 of the Pavo Real Report) overlain by sandstones and limestone/marble (Payande
formation).
Properties within the Pavo Real Project are mostly underlain by Upper Triassic Payande formation
limestones with intercalated claystones, siltstones, calcareous shales and arenites. Some areas are
underlain by Lower Triassic Luisa formation red bed siltstones, fine-grained arenites, conglomerates and
breccias, or Upper Triassic to Lower Jurassic Saldana formation tuffs, agglomerates and lavas with
occasional intercalated red bed lithic arenites and siltstones. This stratigraphic sequence is intruded in
places by Jurassic granodiorite (syenogranite to tonalite and quartz monzonites to quartz monzodiorites)
of the Ibague batholith (140-150 Ma) and associated minor intrusions (Figure 7 of the Pavo Real Report).
Deposit Types
The Pavo Real Project is prospective for two principal and separate mineral deposit types, sedimenthosted, gold-bearing quartz veins and copper-gold skarn deposits.
Sediment-hosted, gold bearing quartz veins are also known as turbidite-hosted, shale-hosted, slate-belt,
mesothermal or orogenic vein deposits. Veins are usually hosted in extensive belts of shale and siltstone
that were originally deposited in thick sequences along passive continental margin settings. Pre to postmineral plutonic granite intrusions commonly occur in spatial association with these deposits.
Mineralization comprises quartz-carbonate veins with carbonate-sericite-pyrite alteration envelopes
located in moderately to steeply dipping, brittle-ductile shear zones and locally in shallow-dipping
extension fractures. Veins commonly extend along strike and down dip for 100 to 1000 meters and occur
alone or, typically, in complex vein networks and vertically stacked "saddle reefs". Veins are usually less
008226000-00082763; 17

25
than 2 meters wide and, therefore, usually only amenable to underground mining. Veins are usually
massive or ribbon-textured but vein breccias and drusy, crystalline quartz can also occur. Metallurgy is
generally simple with minor native gold and trace to minor amounts of arsenopyrite and stibnite as well as
tungsten, bismuth and tellurium minerals. Base metals sulfides are minor and total sulfide content is
usually low. Ores are gold-rich (Au:Ag 5:1 to 10:1) with average grades of 16 grams/tonne gold and 2.5
grams/tonne silver. Deposits can be difficult to evaluate because of the gold "nugget effect". Vertical
mineral zoning is usually absent despite the significant vertical extent of the veins (commonly >1
kilometer). These deposits occur worldwide but are most prolific in size and number in Asia. Examples
include Muruntau (>80 Moz), Sukhoy Log (>20 Moz) and several others (each >5 Moz). In Australia
numerous deposits occur in the Victoria gold fields including Bendigo (>20Moz), Ballarat, Fosterville,
and Stawell.
Copper skarns commonly occur where Andean-type plutons intrude continental margin carbonate
sequences. Copper is dominant (generally chalcopyrite) with moderate to high sulphide content but can
also contain economic gold, silver, molybdenum, tungsten and magnetite. Mineralization is associated
with skarn gangue (andradite garnet, diopside, wollastonite, tremolite-actinolite, etc.) and occurs as
stratiform and tabular orebodies, vertical pipes, narrow lenses and irregular ore zones near igneous
contacts. Skarn copper deposits average 1 to 2 % copper and range from 1 to 100 million tonnes ("Mt")
and, exceptionally, >300 Mt. Major copper skarns are known and mined worldwide.
A recent metallogenic study of an area of similar geological terrain located immediately south of the Pavo
Real Project suggests prospectivity for a range of mineral deposit types including sediment-hosted gold
and copper skarns.
Exploration within the Pavo Real Project is focussed on discovery of sediment hosted gold deposits and
copper-gold skarns.
Mineralization
The Pavo Real Project is located at the southwest end of a ten kilometer long northeast-southwest oriented
trend of mineralized skarn deposits or occurrences with reported base metals, gold and silver values
(Figure 8 of the Pavo Real Report).
Historical artisanal prospects or workings are reported to cluster around or within the limits of the Pavo
Real Project licenses and narrow, gold-bearing, quartz veins hosted in sandstones and limestones are, or
have recently, been under exploitation by artisanal miners. None of these reported mineral occurrences
were observed by the author of the Paval Real Report because of lack of access at the time of the field
visit.
Mineralization observed by the author of the Pavo Real Report comprised narrow veins and structures
cutting breccias or conglomerates.
Exploration
ExpoGold is reported to have conducted some exploration in the Pavo Real Project area during 2009
including rock chip, stream sediment and adit sampling.
Since signing a joint venture agreement with Miranda, the Company completed a property-wide
helicopter airborne magnetic and radio-metric survey, geological mapping and geochemistry sampling
within a relatively small area (principally on concession IHT-10541 and concession application JLI10231). In addition, the Company has continued to acquire additional concessions, applications and
leases for inclusion in the Pavo Real Project.

008226000-00082763; 17

26
A total of 567 rock chip and channel samples are reported to have been collected by ExpoGold, Miranda
and the Company's exploration teams.
Geology
During December, 2010 the Company's geologists completed preliminary geological mapping of the
southern sector of concession application JLI 10231.
Geochemistry
The Company undertook rock chip and channel, stream sediment and soil (conventional and mobile metal
ion (MMI)) geochemistry sampling on the southern sector of concession application JLI-10231 and the
adjacent northeast sector of concession contract IHT-10451 in September 2010. Results are depicted in
Figures 9 to 11 of the Pavo Real Report and indicate significant anomalous gold geochemistry in the
sectors tested. The northern sector of these properties contains a known area of artisanal mining activity
and old adits but was not accessible because of a dispute with the land owners.
On two of the original Pavo Real concessions (JLI-10231 and IHT-10541; Figures 9 to 11 of the Pavo
Real Report and Figure 4 above) sampling has identified two new anomalous areas of gold
mineralization. The first area is approximately 600 meters south of an area that up until recently was
being mined by illegal miners. The miners were working an area of anomalous gold in soils that has
dimensions of 700 metres long by 100 to 500 metres wide. This area contains approximately 30 known
adits with significant sampled gold grades. The new zone, referred to as Quebrada Corosal, defined by
155 rock samples, is 340 metres long and 137 metres wide. Assays vary from below detection levels to a
high of 45.7 grams/tonne gold and average 1.29 grams/tonne gold. The area being mined had been offlimits to the Company while procedures were implemented to gain access and have the miners removed
(recently this issue was legally resolved and access to the area has been achieved). The ground between
this new anomaly and the area where the illegal miners were working has not yet been sampled.
Geophysics
A helicopter-borne, high resolution, magnetic and radiometric survey was completed over the Pavo Real
Project area by MPX Geophysics during August, 2010 (Figures 12 and 13 of the Pavo Real Report). A
total of 1514.2 line-km of data were acquired over the project area (68.45 km). The survey was flown at
a nominal mean terrain clearance of 70 metres along east-west oriented flight lines spaced at 50 metres
with tie lines spaced at 500 metres. Initial interpretation of the results was received by the end of the
month. Interpretation followed using a geophysicist used by Miranda Gold Corporation (Terry White,
Rockgeophysics, Nevada).
Geophysical consultants Paterson, Grant & Watson were subsequently retained by Red Eagle Mining
Corporation to re-interpret the aeromagnetic survey. The main goals were:

Definition and mapping of structures of importance in the area and that might have a role in gold
mineralization;

Lithological mapping based on the airborne magnetic data;

Overall refinement of the known geology of the area;

Definition of targets and areas of interest for ground follow-up (IP surveys, geochemical
sampling)

008226000-00082763; 17

27
The main magnetic anomalies are interpreted to be related to the Triassic-Cretaceous intrusives (Jib) and
Upper Triassic to Upper Jurassic andesites (Figure 14 of the Pavo Real Report). Since magnetic data is
able to map lithological units under sedimentary cover, the results are different from the radiometric data
which is constrained to the top 30 centimeters beneath the ground surface. Jib and Jsa units are very
difficult to differentiate using magnetics since both have a very similar signature. In the radiometric data,
however, there is a good contrast between Jsa which is higher in potassium and Jib which is lower in
uranium. Based on modelling intrusives/andesites seem all to be within reasonable depth (<250 metres).
The structural interpretation indicates an extensive northwest-southeast system to the northwest of the
area, and a northeast-southwest trend on the southeast corner.
Considering the main structural patterns, presence of intrusives/andesites (similar in composition, and
therefore similar magnetic signature) and radiometric patterns (high K, or low U to define probable
alteration zones) five areas were selected for ground follow-up, either geological mapping,
soil/geochemical sampling and/or ground geophysics on a later stage.
Drilling
No record of historical drilling is known for the Pavo Real Project and no drilling has been done by the
Company.
Sampling Method And Approach
Rock chip and channel samples are taken from outcrops and soil samples from shallow pits by, or
supervised by, the Company geologists.
The Company has not undertaken any drilling or extensive sampling where recovery of samples might
materially affect the accuracy and reliability of results. Sampling to date has been preliminary in nature
and part of a reconnaissance exploration program so the information provided is only indicative of
mineralization on the Pavo Real Project.
Soil and rock chip geochemical sampling has been undertaken only within a small area of the entire
property package on the Pavo Real Project. Mobile metal ion sampling has been done in accordance with
the published methodology from the technology originators in Australia. Some outcrop channel sampling
has been conducted over 1-2 metre intervals. These data are insufficient to develop statistics on samples
and composites.
Sample Preparation, Analyses And Security
Rock samples (average 2 kilograms) are placed in a plastic bag marked on both sides and on a piece of
flagging tape inside with the sample number and sealed immediately. The sample is then photographed.
Bagged samples are put in larger sacks in the field and when these are filled they are sealed in the field.
Sample sacks are then securely transported to the sample store. Every Saturday security personnel
transport the sample sacks directly to the SGS Laboratory in Medellin together with the dispatch
documents. The company then communicates with the laboratory who confirm receipt of the samples.
Sampling by the Company's geologists conforms to industry-wide good practice. Chain of custody is
maintained for all samples. Analyses are undertaken by ALS Chemex (gold fire assay plus 35 elements
(ICP; Appendix 4 of the Pavo Real Report) and duplicates analysed by SGS Laboratory (gold fire assay
plus 52 elements (ICP)). Samples are prepared at their laboratories respectively in Medellin and Bogota
and 30 gram pulps forwarded to their laboratories in Lima, Peru for analysis. MMI samples are sent to the
SGS laboratory in Medellin and forwarded their MMI accredited laboratory for preparation and analysis
in Lima, Peru.
008226000-00082763; 17

28
The author of the Pavo Real Report did not conduct a detailed investigative analysis of security, sample
preparation and analyses employed by the Company but he is familiar with the processes and laboratories
employed based upon work with other companies. The author of the Pavo Real Report has, therefore, no
reason to dispute the adequacy of security, sampling and analyses undertaken at this early stage in the
exploration program at the Pavo Real Property.
Data Verification
The Company monitors QA/QC on all analytical work via the use of certified reference materials and
blank samples (both purchased in Canada) and field duplicates in addition to monitoring of internal
laboratory check-analyses. A duplicate, a standard and a blank are included with every 30 samples sent
for analysis. MMI samples are analysed by SGS with a duplicate every 30 samples (no blanks or
standards).
The author of the Pavo Real Report reviewed and verified the results of the reconnaissance exploration
program completed to date and is of the opinion that the QA/QC protocols implemented by the Company
are appropriate for this type of exploration and allow a high level of confidence in the data. The author of
the Report did not take any additional check samples on the property due to the limited nature of the
exploration completed to date.
Adjacent Properties
Properties surrounding the Pavo Real Project concessions are held by various companies and individuals.
No information is available regarding the status of exploration in these properties.
Mineral Processing And Metallurgical Testing
The Company did not conduct any studies on mineral processing nor did they perform any metallurgical
testing mineralized samples during the 2010/2011 exploration program.
Mineral Resource And Mineral Reserve Estimates
The Company did not perform any mineral resource or mineral reserve estimates during the 2010/2011
exploration program.
Other Relevant Data And Information
Restrictions in gaining access to the northern sector of the northern Pavo Real Project tenements (IHT10541 and JLI-10231) where extensive artisanal mining activity and excellent surface sample data exists
has affected scope of work until recently. Access has now been obtained after a successful systematic
legal due process.
Interpretation And Conclusions
Mineralization in the Pavo Real Project area is reported to comprise sandstone and limestone hosted,
mesothermal/orogenic quartz veins that contain gold. Narrow quartz veins and structures were observed
by the author of the Report cutting breccia/conglomerate stratigrahically below sandstones and
limestones. These quartz veins and structures are reported to have returned significant gold assay values.
Small scale artisanal miners are reported to have exploited narrow, high-grade auriferous quartz veins but
this could not be confirmed by the author of the Report for lack of access.

008226000-00082763; 17

29
Skarn deposits and occurrences with base and precious metals values are reported to occur northeast of
the Pavo Real Project area where high copper and gold samples were reported but in similar geological
environment where high copper and gold samples were reported. Only one such deposit was examined
by the author of the Report, Mina Vieja, which is outside the Pavo Real Project area, but under an option
agreement between the Company and local tenement holders.
Exploration at the Pavo Real Project is at a very early stage but it is the Pavo Real Report author's opinion
that the project is prospective for gold veins and base and precious metals skarn mineralization and hence
warrants further exploration.
Recommendations
The following Stage 1 exploration strategy is recommended for the Pavo Real Project:

Detailed geological mapping, especially structural geology, should be extended throughout the
Pavo Real Project area together with sampling and assaying of known gold mineralized quartz
veins and veinlet zones (artisanal mines)

Property wide stream sediment geochemistry should be undertaken across the Pavo Real Project
area and anomalies followed up using grid MMI and/or conventional soil geochemistry

Ground magnetic and closely-spaced electromagnetic geophysics (induced polarization

resistivity/chargeability) should be undertaken to test extensions of known mineralization and to
follow up potentially mineralized geochemistry anomalies

If Stage 1 exploration generates significant potentially mineralized targets then a Stage 2 program of
diamond drilling should be designed and initiated to test these targets.
Stage 1 Exploration cost is US$0.49 million, and includes:
ITEM

COST US$

Detailed geological mapping structures

40,000

Sampling and assaying veins in trenches and adits

40,000

Grid soil MMI and conventional geochemistry

25,000

Detailed ground magnetic and electromagnetic geophysics

40,000

Assays (250 MMI, 250 vein systems, 500 rockchip and adit samples @$35)

35,000

Drafting and plotting

20,000

Consulting geologists

25,000

Field labour

50,000

Transportation and logistics

25,000

Administration

150,000

Capital equipment

40,000

TOTAL

490,000

Should the results of exploration program stage 1 define the expected drill targets, a stage 2 exploration
program consisting of a minimum of 5,250 meters of diamond core drilling will be initiated. The amount
of drilling has been estimated incorporating the difficult terrain and conditions in the selected areas

008226000-00082763; 17

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Stage 2 Exploration cost is US$ 1.56 million, and includes:
ITEM

COST US$

Drill mobilization

20,000

Drill site preparation, roads and access

30,000

Diamond drilling (5,250metres @ $150/metres)

861,000

Assays (6560 @ $32.5)

213,200

Supervision

50,000

Drafting and plotting

20,000

Consulting geologists

50,000

Field labour

75,000

Transportation and logistics

55,000

Administration

180,000

Capital equipment
TOTAL

9,800
1,564,000

The Company has prepared a total budget of US$2,170,050 for 2011. Exploration costs total
US$2,054,000 as detailed above. The balance after stage 1 and 2 exploration programs is US$116,050
which is required for mining title, land use fees and option payments.
Work completed during 2010 and the program for 2011 ensures that the Company fulfills and exceeds its
exploration commitments with respect to the Miranda Gold Corporation-Red Eagle Mining Corporation
earn-in joint venture.
MINA VIEJA PROJECT
On November 27, 2010, the Company entered into an option agreement (the "Mina Vieja Option
Agreement") with Carmen Laserna and Fernando Uribe (the "Mina Vieja Vendors") to acquire up to
100% of the Mina Vieja Project by acquiring 100% of the outstanding shares of MV Colombia, a
Colombian simplified stocks corporation to be incorporated by the Mina Vieja Vendors for the purposes
of the Mina Vieja Option Agreement. As title due diligence is still in progress, the effective date for
making the option payments under the Mina Vieja Option Agreement, has not yet occurred.
Pursuant to the Mina Vieja Option Agreement, the Company has the sole exclusive right to conduct
exploration and development of gold on the Mina Vieja Project by incurring a minimum of US$2 million
on exploration expenditures and making the cash payments totalling an aggregate of US$535,000 over the
initial 30 month option period (the "Mina Vieja Initial Option") as follows:

an initial cash payment of US$5,000 upon successful title due diligence (the "MV Effective
Date");

6 monthly cash payments of US$5,000 per month commencing on the MV Effective Date;

a US$100,000 cash payment on or before 6 months after the MV Effective Date;

a US$200,000 cash payment on or before 18 months after the MV Effective Date; and

008226000-00082763; 17

31

a US$200,000 cash payment on or before 30 months after the MV Effective Date.

Upon completing its obligations under the Mina Vieja Initial Option, the Company will have the right for
a period of 90 days to purchase 80% of the outstanding shares of MV Colombia (the "Mina Vieja Second
Option"). The purchase price will be calculated by taking 80% of the quantity of measured and indicated
gold equivalent ounces (as defined in NI 43-101 and calculated by an independent qualified person) and
multiplying it by US$10 per gold equivalent ounce. The purchase price will be payable in cash. Upon
the 80% interest being acquired by the Company, the parties will enter into a shareholders' agreement to
govern further activities.
Once the Company exercises its right under the Mina Vieja Second Option, the Company has the right to
purchase the remaining 20% of MV Colombia (the "Mina Vieja Third Option"). The purchase price
will be calculated by taking 20% of the quantity of measured and indicated gold equivalent ounces
calculated under the Second Option and multiplying it by US$15 per gold equivalent ounce. The
purchase price will be payable in cash. In the event that the Company does not exercise the Mina Vieja
Third Option, future project expenditures will be funded on a pro-rata basis: 80% by the Company and
20% by the Mina Vieja Vendors. If the Mina Vieja Vendors are unable to meet their 20% funding
obligation on future project expenditures, the remaining 20% interest held in the Mina Vieja Property by
the Mina Vieja Vendors will be transferred to the Company in exchange for a 1% net smelter return"
royalty on the Mina Vieja Property.
The Mina Vieja Option Agreement is terminable by the Company on 30 days notice, and is terminable by
the Mina Vieja Vendors on notice if the Company is in breach of its obligations under the Mina Vieja
Option Agreement.
As at April 15, 2011, title due diligence is still in progress; therefore, the effective date as defined under
the Agreement has not yet been established.
The information in the section below is based on the technical report titled "An Assessment of the Mina
Vieja Project" dated March 31, 2011 (the "Mina Vieja Report"). Reference should be made to the full
text of the Mina Vieja Report which is available for review on SEDAR located at www.SEDAR.com.
Property Description And Location
Property Location
The Mina Vieja Project is located 7km northeast the town of Valle de San Juan in the municipality of San
Luis, approximately 25km southeast of the city of Ibague, in the Department of Tolima, in Colombia,
South America (Figures 1 and 2 of the Mina Vieja Report).
Property Description
The Mina Vieja Project comprises a total area of 951.89ha in one exploitation licence numbered 3126
(130.14ha) and one concession contract numbered 1061 (821.75ha; Table 1 of the Mina Vieja Report).
The properties are almost, but not quite contiguous (Figure 5 below).

008226000-00082763; 17

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Figure 5

008226000-00082763; 17

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Accessibility, Climate, Local Resources, Infrastructure And Physiography

Topography in the Mina Vieja area is moderately rugged and comprises steep sided valleys and hills.
Altitudes range between 850 and 1200 metres.
The principal economic activity in the area is limestone and marble quarrying followed by cultivation and
cattle farming and some tourism. Much of the area is under pasture and cultivated land. Secondary forest
is preserved around Mina Vieja and also in sheltered areas along major streams.
Mina Vieja is accessible from the city of Ibague via the paved road to Bogota road turning left at the
Buenos Aires district (after 23km) then right to the town of Payande (after 10km) then via unpaved roads
(5.5km) to the Mina Vieja mine/ quarry.
Climate in the region is moderately warm (19 - 25oC) but temperatures vary with altitude. Rainfall
averages 1870 mm per annum and humidity 63%. There are no significant climatic restrictions on
working.
Resources and infrastructure in the Mina Vieja district are moderately good. An electrical grid in the area
is can supply connections of 110 and 220 volts. Water is widely available from local rivers and streams
but must be obtained by negotiation with local land owners.
Unskilled labour is available locally. Level valley floors are available in places for tailings storage and
waste disposal, heap leach pads and mineral processing sites.
History
Mina Vieja was previously known as "Rio Frio" and was owned and operated by a Chilean company for
an unknown period up to the early 1970's.
Geological Setting
Regional Geology
The northwest margin of South America comprising Colombia, and adjacent Ecuador and western
Venezuela, is a complex elongated mosaic of Palaeozoic and younger, auto-chthonous and allochthonous
terranes (Figure 4 of the Mina Vieja Report). These terranes were accreted to the South American
continent (Guyana Shield) and subjected to transcurrent tectonics and subduction-related magmatism
along a 2,000km-long segment of the Pacific Rim (Figures 4 and 5 of the Mina Vieja Report). Regionalscale structural geology is characterised by a suite of anastamosing, sub-parallel, Andean- (dominantly
north-northeast-) striking, transcurrent, major faults and shear zones some of which are interpreted to be
terrane boundary sutures (Figure 4 of the Mina Vieja Report). Subduction-related magmatic arcs were
superimposed on the above described terranes during the Jurassic, Cretaceous, Eocene to late Miocene,
and Late Miocene to Recent and are characterised by plutonic batholiths, sub-volcanic intrusions and
associated volcanic rocks (Figure 5 of the Mina Vieja Report Report).
The Andean Cordillera in Colombia comprises three distinct mountain chains, the Western Cordillera
(Occidental), Central Cordillera (Central) and eastern Cordillera (Oriental), separated by broad interAndean valleys. Mina Vieja is located on the east flank of the Central Cordillera within the Mesozoic
Ibague block, part of the central continental subplate realm that dominates the central Cordillera of
Colombia (Figure 4 of the Mina Vieja Report). The Triassic-Jurassic Ibague (and San Lucas) block is
dominated by composite metaluminous calc-alkaline diorite-granodiorite batholiths and associated
volcanics in modified continental basement of the Chicamocha and Cajamarca-Valdivia terranes.

008226000-00082763; 17

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Local Geology
Geology around Mina Vieja comprises a stratigraphic sequence of Lower Triassic red bed siltstones, finegrained arenites, conglomerates and breccias (Luisa formation) overlain by Upper Triassic limestones
with intercalated claystones, siltstones, calcareous shales and arentites (Payande formation) overlain by
Upper Triassic to Lower Jurassic tuffs, agglomerates and lavas occasionally intercalated with red bed
lithic arenites and siltstones (Saldana formation). This sequence is intruded by Jurassic granodiorites
(syenogranite to tonalite and quartz monzonites to quartz monzodiorites) of the Ibague batholith (140-150
Ma) and associated minor intrusions (Figure 6 of the Mina Vieja Report).
Property Geology
Geology at Mina Vieja comprises relatively monotonous, massive, medium grained granular grey-white
marble (Upper Triassic Payande formation) intruded by a diorite-monzodiorite (Jurassic Payande ?) stock
and andesite and trachyte porphyry dikes (Figure 7 of the Mina Vieja Report). Marble close to the
intrusive contact is mineralized with coarse to fine-grained sulphides and magnetite intimately associated
with garnet-pyroxene skarn alteration.
Deposit Types
Mina Vieja is a copper (-gold) skarn deposit. Mineralization of this type commonly occurs where
Andean-type plutons intrude continental margin carbonate sequences (Appendix 2 of the Mina Vieja
Report). Copper is dominant (generally chalcopyrite) with moderate to high sulphide content but can also
contain economic gold, silver, molybdenum, tungsten and magnetite. Mineralization is associated with
skarn gangue (andradite garnet, diopside, wollastonite, tremolite-actinolite, etc.) and occurs as stratiform
and tabular orebodies, vertical pipes, narrow lenses and irregular ore zones near igneous contacts. Skarn
copper deposits average 1 to 2 % copper and range from 1 to 100 Mt and, exceptionally, >300 Mt. Major
copper skarns are known and mined worldwide (Appendix 2 of the Mina Vieja Report).
A recent metallogenic study immediately south of Pavo Real in similar geological terrain, suggests
prospectivity for a range of mineral deposit types including copper skarns (Table 2 of the Mina Vieja
Report).
Exploration Mina Vieja is focussed on discovery of copper-gold skarn mineralization.
Mineralization
Mina Vieja is located at the northeast end of a ten kilometre long, northeast-south-west oriented trend of
mineralized skarn deposits and occurrences with reported base metals, gold and silver values (Figure 8 of
the Mina Vieja Report).
Mina Vieja is reported to have operated until the 1970's as a mid-sized mining, milling and concentrate
processing operation under a Chilean company. Head grade reportedly ran 2.5% copper and 1.5
grams/tonne gold with estimated production of 1.0 to 1.5 Mt of ore (estimate by the Company). The
copper orebody was mined via three adits above the water table and over an estimated vertical distance of
approximately 100 metres.
A Canadian consulting geologist (R. Raby, 1992) hired by the mine owners reportedly mapped and
interpreted the skarn contact and showed it to dip at 57o to the east and to the south. Cross-sections
showed a copper skarn orebody of 20 to 30 metres in thickness approximate 350 metre strike length of
mineralization.

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Mineralization observed by the author of the Mina Vieja Report comprises coarse-grained irregular to
fine-grained disseminated magnetite and sulphides, dominantly chalcopyrite, associated with garnetpyroxene skarn-altered marble.
Exploration
No systematic exploration has been made at Mina Vieja by the Company. Geologists took four grab
samples that returned the following results:
Sample

Au

Ag

Cu

Zn

Pb

Mo

Bi

MVO

2.8

429

446

27

10

MV3

57

42

146

1350

MV1

2.16

67.5

290

64

754

10

MV2

0.22

22.8

1275

33

18

76

50

(all values in ppm; d = below detection limit)

The above samples display highly anomalous to potentially economic grades for precious and base metals
together with high values of molybdenum, bismuth and tungsten typical of copper-gold skarn deposits
(Appendix 2 of the Mina Vieja Report).
Other reported values for Mina Vieja rockchips are as follows (the Company):
1.15 grams/tonne gold,

22 grams/tonne silver

11% copper

0.33 grams/tonne gold

22 grams/tonne silver

4.1% copper

0.72 grams/tonne gold

920 grams/tonne silver

8% copper

26.6 grams/tonne gold

4250 grams/tonne silver

2% copper

2.2 grams/tonne gold

67.5 grams/tonne silver

8% copper

0.22 grams/tonne gold

23 grams/tonne silver

1.3% copper

The limited exploration work done to date at the Mina Vieja Project has been done by experienced
professional geologists employed by the Company. All assay work has been undertaken by international
accredited assay facilities located in South America.
Drilling
Mina Vieja has not been drilled by the Company.
A report by a Canadian geologist, R. Raby, from 1992 claimed that the previous Chilean owners may
have drilled up to 29 holes at Mina Vieja, of which 16 were identified, 12 of which intersected marble
skarn. Raby had been contracted by the current land and title owner to investigate a scope for marble and
limestone exploitation. No information regarding this drilling has been seen by the author of the Mina
Vieja Report.

008226000-00082763; 17

36
Sampling Method And Approach
The Company has not undertaken systematic sampling at the Mina Vieja Project. Preliminary grab
samples have been taken but sampling cannot be considered to be adequate at this time. Sample
collection was partly undertaken by the Company's geologists and partly by the Company's joint venture
partner geologists.
Sample Preparation, Analyses And Security
Rock samples (average 2 kilograms) are placed in a plastic bag marked on both sides and on a piece of
flagging tape inside with the sample number and sealed immediately. The sample and sample location are
then photographed. Bagged samples are put in larger sacks in the field and when these are filled they are
sealed in the field. Sample sacks are then securely transported to the sample store.
Sampling by the Company's geologists conforms to industry-wide good practice. Chain of custody is
maintained for all samples. Analyses are undertaken by ALS Chemex (gold fire assay plus 35 elements
(ICP; Appendix 3 of the Mina Vieja Report). Samples are prepared at their laboratories respectively in
Medellin and Bogota and 30 gram pulps forwarded to their laboratories in Lima, Peru for analysis.
Data Verification
The Company monitors QA/QC on all analytical work via the use of certified reference materials and
blank samples (both purchased in Canada) and field duplicates in addition to monitoring of internal
laboratory check-analyses. A duplicate, a standard and a blank are included with every 30 samples sent
for analysis.
The author of the Mina Vieja Report did not take any additional check samples on the Mina Vieja Project
due to the limited nature of the exploration completed to date.
Adjacent Properties
No information is available regarding the status of exploration in properties surrounding Mina Vieja.
Mineral Processing And Metallurgical Testing
The Company did not conduct any studies on mineral processing nor did they perform any metallurgical
testing mineralized samples during the 2010/2011 exploration program.
Mineral Resource And Mineral Reserve Estimates
The Company did not perform any mineral resource or mineral reserve estimates during the 2010/2011
exploration program.
Other Relevant Data And Information
The author of the Mina Vieja Report is not aware of any other relevant data or information regarding the
Mina Vieja Project.
Interpretation And Conclusions
Mineralization at the Mina Vieja Project is skarn copper type with gold, silver and other metals.

008226000-00082763; 17

37
The deposit was previously drilled and mined on a moderate industrial scale but no previous exploration
results or production figures have been seen by the author of the Mina Vieja Report.
Four grab samples taken by the Company's geologists returned value of below detection to 2.16
grams/tonne gold, below detection to 67.5 grams/tonne silver, 8 to 1275 ppm copper, 33-446 ppm zinc, 4
to 64 ppm lead, 1 to 146 ppm molybdenum, below detection to 754 ppm bismuth and 10 to 1350 ppm
tungsten.
The objectives of exploration of the Mina Vieja Project undertaken by the Company to date have been
met but exploration undertaken and data obtained to date are of insufficient density and reliability to
confirm the occurrence of potentially economic mineralization. More detailed exploration will be
required to advance the project and to confirm or condemn its economic potential. Further exploration
will require detailed geological mapping, geochemistry, geophysics, drilling, sampling and assaying.
In addition, it is critical for the property owners to obtain an extension for exploitation of precious and
base metals in the mining licences from the Colombian mining authorities.
It is the authors opinion that the Mina Vieja Project warrants further exploration.
Recommendations
The following Stage 1 exploration strategy is recommended for the Mina Vieja Project:

Detailed surface and underground geological mapping of skarn mineralization and the intrusivemarble contact together with sampling and assaying for copper, gold and other base and precious
metals;

Property wide geochemistry using grid MMI and/or conventional soil geochemistry; and

Ground magnetic and closely-spaced geophysics (induced polarization resistivity/chargeability)

to test known mineralization and locate extensions.

Stage 1 Exploration Budget

ITEM

COST US$

Detailed geological mapping surface outcrops and old underground workings

15,000

Sampling and assaying outcrips and old underground workings

15,000

Grid soil MMI and conventional geochemistry

10,000

Detailed ground magnetic and electromagnetic geophysics

10,000

Assays (250 MMI, 250 vein systems, 500 underground samples @$35)

35,000

Drafting and plotting

5,000

Field labour

10,000

Transportation and logistics

5,000

Administration

5,000

Capital equipment

10,000

TOTAL

120,000

008226000-00082763; 17

38
If Stage 1 exploration generates significant potentially mineralized targets then a Stage 2 program of
diamond drilling (2,500 metres) should be designed and initiated to test these targets.
Stage 2 Exploration Budget
ITEM

COST US$

Drill mobilization

5,000

Drill site preparation, roads and access

10,000

Diamond drilling (2,500metres @ $125/metre)

312,000

Assays (3125 @ $32.5)

101,000

Supervision

15,000

Drafting and plotting

5,000

Field labour

15,000

Transportation and logistics

5,000

Administration

5,000

Capital equipment

5,000

TOTAL

478,000

The total budget for the two stages of exploration at Mina Vieja is US$ 598,000.
USE OF PROCEEDS
FUNDS AVAILABLE
The Company will receive aggregate net proceeds (after payment of the Agents' Commission and
estimated expenses of the Offering) of $ from the sale of Offered Shares pursuant to this Prospectus,
assuming no exercise of the Over-Allotment Option. These funds will be combined with the Company's
working capital of approximately $5,375,000 as at April 15, 2011 for total available funds of $ upon
completion of the Offering. In the event that the Agents exercise all or a portion of the Over-Allotment
Option, any proceeds received by the Company will be added to its general working capital.
PRINCIPAL PURPOSES
The principal purposes for which the funds available to the Company upon completion of the Offering
will be used are as follows:
PRINCIPAL PURPOSE
To pay the property payments due within the next 12 months under the
Company's Option Agreements as follows:

Santa Rosa (US$3,000,000)

Pavo Real (US$50,000)

Mina Vieja (US$135,000)

008226000-00082763; 17

FUNDS TO BE USED
$(1)

39

PRINCIPAL PURPOSE

FUNDS TO BE USED

Recommended Stage 1 exploration program on the Santa Rosa Project

(US$1,290,000)

$(1)(2)

Recommended Stage 2 exploration program on the Santa Rosa Project

(US$3,243,500)

$(1)

Recommended Stage 1 exploration program on the Pavo Real Project

(US$490,000)

$(1)

Recommended Stage 2 exploration program on the Pavo Real Project

(US$1,564,000)

$(1)(2)

Recommended Stage 1 exploration program on the Mina Vieja Project

(US$120,000)

$(1)(2)

Recommended Stage 2 exploration program on the Mina Vieja Project

(US$478,000)

$(1)(2)

For future acquisitions in order to consolidate the districts surrounding the

Pavo Real and Santa Rosa Projects

$4,700,000

To provide funding sufficient to meet administrative costs for 12 months

$1,200,000

To provide general working capital to fund ongoing operations

Total:

1.
2.

Converted from US$ at US$ = CDN$, being the noon exchange rate reported by the Bank of Canada on .
The Company will only expend these funds if the results of the Stage 1 exploration program warrant.

Upon completion of the Offering, the Company's working capital available to fund ongoing operations
will be sufficient to meet its administrative costs and exploration expenditures for twelve months.
Administrative expenditures for the following twelve months are comprised of the following:
Administrative Costs for 12 months

Budget

Salaries and consulting fees

$650,000

Office costs (Vancouver and Colombia)

$400,000

Legal, Exchange, auditors and other professional fees

$150,000

TOTAL:

$1,200,000

The Company intends to spend the funds available to it as stated in this Prospectus. There may be
circumstances however, where, for sound business reasons, a reallocation of funds may be necessary.
STATED BUSINESS OBJECTIVES AND MILESTONES
The Company's business objectives using the available funds are to:

008226000-00082763; 17

40
(a)

obtain a listing of its Common Shares on the Exchange;

(b)

complete the acquisition of the interests in its properties;

(c)

conduct the recommended work programs in its properties;

(d)

working capital requirements; and

(e)

seek out acquisition opportunities in areas surrounding existing projects.

The listing of the Company on the Exchange is anticipated to occur shortly after completion of the
Offering, subject to the Company fulfilling all of the requirements of the Exchange. Upon completion of
the Offering, the various exploration programs are expected to commence shortly thereafter and are
estimated to be completed by December 31, 2011.
DIVIDENDS OR DISTRIBUTIONS
The Company has not paid dividends since its incorporation. While there are no restrictions precluding
the Company from paying dividends, it has no source of cash flow, and anticipates using all available
cash resources toward its stated business objectives. As such the Company does not anticipate the
payment of dividends in the foreseeable future. At present, the Company's policy is to retain earnings, if
any, to finance its business operations. The payment of dividends in the future will depend upon, among
other factors, the Company's earnings, capital requirements and operating financial conditions.
SELECTED FINANCIAL INFORMATION AND MANAGEMENT'S DISCUSSION AND
ANALYSIS
SUMMARY OF FINANCIAL INFORMATION
The following table sets forth summary financial information for the Company for the period from
incorporation on January 4, 2010 to December 31, 2010, and should be read in conjunction with the
financial statements and related notes attached to and forming part of this Prospectus, and "Management
Discussion and Analysis", as included elsewhere in this Prospectus.
Period from January 4,
2010 to December 31,
2010
Total Revenues

Nil

Expenses

$1,622,707

Net Loss

$1,617,707

Current Assets

$5,990,991

Total Assets

$6,582,216

Current Liabilities

$125,722

Working Capital

$5,865,269

Shareholders' Equity

$6,679,962

008226000-00082763; 17

41

Period from January 4,

2010 to December 31,
2010
Net Loss Per Share
Number of Shares Outstanding

$0.13
22,712,093

Management Discussion and Analysis:

The following management discussion and analysis ("MD&A") included financial information as at
December 31, 2010 and should be read in conjunction with the Company's audited financial statements
for the period from January 4, 2010 (date of inception) to December 31, 2010, appearing elsewhere in this
Prospectus, as well as the disclosure contained throughout this Prospectus. Included herein are certain
forward-looking statements that involve various risks, uncertainties and other factors. The forwardlooking statements are not historical facts, but rather are based on the current plans, objectives, goals,
strategies, estimates, assumptions and projections about the Company's industry, business and future
financial results. Actual results could differ materially from the results contemplated by these forwardlooking statements due to a number of factors, including those discussed in other sections of this
Prospectus. See "Caution Regarding Forward-Looking Statements" and "Risk Factors".
Overall Performance and Results of Operations
The Company was inactive from incorporation on January 4, 2010 until June 25, 2010 when the
Company entered into the Pavo Real Option Agreement and Pavo Real Shareholder Agreement with
Miranda and other parties. Pursuant to the Pavo Real Option Agreement, Miranda assigned 70% of the
shares of MAD III, a wholly-owned subsidiary of Miranda to the Company. The activities of MAD III
are governed by the Pavo Real Shareholders Agreement. To maintain its 70% shareholding in MAD III,
effectively representing a 70% interest in the Pavo Real Project, the Company must make an aggregate
US$4 million contribution to MAD III within the next four years.
Subsequent to entering into the Pavo Real Option Agreement, the Company signed three additional option
agreements, including the Santa Rosa Option Agreement. Since then, the Company's sole business focus
has been to (i) raise sufficient funds to carry out initial exploration on the Colombian projects; and (ii)
complete the process of obtaining a listing on the Exchange.
To date, the Company has issued an aggregate 24,378,759 Common Shares, of which 23,858,000 were
issued for cash consideration ($9,127,847). A preliminary exploration program has been carried out on
the Company's Pavo Real and Santa Rosa Projects for a total cost of approximately $900,000, and in
March of 2011, NI 43-101 technical reports were prepared on the work completed on the Santa Rosa and
Pavo Real Projects. Upon completion of the Offering, the Company intends to carry out the recommended
exploration programs on each Project.
Liquidity and Capital Resources
As at December 31, 2010 the Company had working capital of approximately $5.8 million with current
assets of $6.0 million and current liabilities of $200,000.
It is expected that the Company plans to use its existing working capital and the proceeds from the
offering in 2011 as follows:

008226000-00082763; 17

42

US$3.2 million payable to the vendors under the various purchase agreements entered into in
fiscal 2010; and

US$7.2 million in exploration programs, which includes planned expenditures of approximately

US$4.53 million in connection with the Santa Rosa Project and approximately US$2.1 million in
connection with the Pavo Real Project;

US$4.7 million in potential acquisitions in order to consolidate the districts surrounding the Santa
Rosa and Pavo Real Projects; and

$1.2 million to meet administrative costs for the next twelve months.

After listing on the Exchange, the Company may require additional funds to support working capital
requirements or for other purposes and may seek to raise additional funds through public or private equity
funding, bank debt financing or from other sources. Notwithstanding success to date in acquiring equity
financing on acceptable terms, there can be no assurance that the Company will be successful in obtaining
any additional required funding necessary to conduct additional exploration, if warranted, on the
properties or to develop mineral resources on the properties, if commercially mineable quantities of such
resources are located thereon.
Off Balance Sheet Arrangements
The Company has no off balance sheet arrangements other than already disclosed.
Proposed Transactions
There are no proposed transactions of a material nature being considered by the Company. However, the
Company continues to evaluate properties and other entities and opportunities that may be acquired or
pursued in the future.
Contractual Obligations
As of the date of this MD&A, the Company had the following options payments remaining on the various
projects.:
Payments Due by Period
Contractual Obligations

Total

Less than 1 year

1 3 years

4 5 years

After 5 years

Santa Rosa

$7,500,000

$3,000,000

$4,500,000

$-

$-

Pavo Real

$360,000

$50,000

$210,000

$100,000

$-

Mina Vieja

$535,000

$135,000

$400,000

$-

$-

$8,395,000

$3,185,000

$5,010,000

$100,000

$-

Total Contractual
Obligations

008226000-00082763; 17

43
Transactions with Related Parties
The aggregate value of transactions and outstanding balances relating to key management personnel and
entities over which they have control or significant influence were as follows:
Short-term employee benefits(1)
All other compensation(2)

December 31, 2010

$153,209
195,200
$348,409

Notes:
1)

Salary paid to an officer of the Company.

Consulting fees ($31,200) paid to a partnership in which the CFO of the Company is an incorporated partner; office,
rent and related costs ($144,000) paid to a company controlled by the directors of the Company; legal fees ($20,000) paid to a
partnership in which one of the directors of the Company is a partner.

2)

The balance in accounts payable and accrued liabilities as at December 31, 2010 was $20,000 to these
related parties.
The Company's CEO is a director common to both the Company and Miranda, which entered into various
agreements on the Pavo Real Project (refer to Note 8 of the Company's annual audited financial
statements for the period ended December 31, 2010).
Critical Accounting Policies and the Use of Estimates
A detailed summary of the Company's significant accounting policies, including the use of estimates, is
included in note 3 of the Company's annual audited financial statements for the period from inception
(January 4, 2010) to December 31, 2010.
Financial Instruments
The Company's significant accounting policies regarding its financial instruments are set out in Note 3 to
the financial statements included in this Prospectus. The only financial instruments consist of cash,
receivables, accounts payable and accrued liabilities. The Company is of the opinion that it is not
exposed to significant interest, currency or credit risks arising from these financial instruments.
Disclosure of Outstanding Share Data
As at December 31, 2010, and as at the date of this Prospectus, the Company had one class of authorized
shares, being Common Shares without par value. As at the date of this Prospectus, 24,378,759 Common
Shares are issued and outstanding.
Subsequent Events
On January 6, 2011, the Company issued 1,666,666 units at a price of $0.75 per unit for gross proceeds of
$1,250,000 to a strategic investor. Each unit consisted of one common share and one-half common share
purchase warrant. Each whole warrant entitles the holder to purchase one Common Share of the
Company for $1.25 per share for up to two years subsequent to the Closing Date.
On February 14, 2011, the Company made a US$400,000 annual payment pursuant to the Santa Rosa
Agreement.

008226000-00082763; 17

44
On April 15, 2011, the Company signed a final purchase agreement for the Santa Rosa Project as
described in Note 8 of the Company's annual audited financial statements for the period ended December
31, 2010.
New Accounting Standards and Interpretations
Standards issued but not yet effective up to the date of issuance of the Company's financial statements are
listed below. This listing is of standards and interpretations issued, which the Company reasonably
expects to be applicable at a future date. The Company intends to adopt those standards when they
become effective. The Company does not expect the impact of such changes on the financial statements
to be material.
IAS 24 Related Party Disclosures (Amendment)
The amended standard is effective for annual periods beginning on or after January 1, 2011. It clarified
the definition of a related party to simplify the identification of such relationships and to eliminate
inconsistencies in its application. The revised standard introduces a partial exemption of disclosure
requirements for government-related entities. The Company does not expect any impact on its financial
position or performance. Early adoption is permitted for either the partial exemption for governmentrelated entities or for the entire standard.
IAS 32 Financial Instruments: Presentation Classification of Rights Issues (Amendment)
The amendment to IAS 32 is effective for annual periods beginning on or after February 1, 2010 and
amended the definition of a financial liability in order to classify rights issues (and certain options or
warrants) as equity instruments in cases where such rights are given pro rata to all of the existing owners
of the same class of an entitys non-derivative equity instruments, or to acquire a fixed number of the
entitys own equity instruments for a fixed amount in any currency. This amendment will have no impact
on the Company after initial application.
IFRS 9 Financial Instruments: Classification and Measurement
IFRS 9 as issued reflects the first phase of the International Accounting Standards Board ("IASB") work
on the replacement of IAS 39 and applies to classification and measurement of financial assets as defined
in IAS 39. The standard is effective for annual periods beginning on or after January 1, 2013. In
subsequent phases, the IASB will address classification and measurement of financial liabilities, hedge
accounting and derecognition. The completion of this project is expected in early 2011. The adoption of
the first phase of IFRS 9 will have an effect on the classification and measurement of the Companys
financial assets. The Company will quantify the effect in conjunction with the other phases, when issued,
to present a comprehensive picture.
IFRIC 14 Prepayments of a minimum funding requirement (Amendment)
The amendment to IFRIC 14 is effective for annual periods beginning on or after January, 1 2011 with
retrospective application. The amendment provides guidance on assessing the recoverable amount of a net
pension asset. The amendment permits an entity to treat the prepayment of a minimum funding
requirement as an asset. The amendment is deemed to have no impact on the financial statements of the
Company.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
IFRIC 19 is effective for annual periods beginning on or after July 1, 2010. The interpretation clarifies
that equity instruments issued to a creditor to extinguish a financial liability qualify as consideration paid.
008226000-00082763; 17

45
The equity instruments issued are measured at their fair value. In case that this cannot be reliably
measured, the instruments are measured at the fair value of the liability extinguished. Any gain or loss is
recognised immediately in profit or loss. The adoption of this interpretation will have no effect on the
financial statements of the Company.
DESCRIPTION OF SECURITIES DISTRIBUTED
COMMON SHARES
The authorized share capital of the Company consists of an unlimited number of Common Shares without
par value and an unlimited number of preferred shares. As of the date of this Prospectus, 24,378,759
Common Shares are issued and outstanding as fully paid and non-assessable and no Preferred Shares are
outstanding. The holders of the Common Shares are entitled to receive notice of and to attend and vote at
all meetings of the shareholders of the Company and each Common Share confers the right to one vote in
person or by proxy at all meetings of the shareholders of the Company. The holders of the Common
Shares, subject to the prior rights, if any, of any other class of shares of the Company, are entitled to
receive such dividends in any financial year as the board of directors of the Company may by resolution
determine. In the event of the liquidation, dissolution or winding-up of the Company, whether voluntary
or involuntary, the holders of the Common Shares are entitled to receive, subject to the prior rights, if any,
of the holders of any other class of shares of the Company, the remaining property and assets of the
Company.
AGENTS' WARRANTS
The Company has also agreed to grant the Agents' Warrants to the Agents entitling the Agents to
purchase that number of Common Shares as is equal to 3% of the number of Shares sold pursuant to the
Offering. See "Plan of Distribution".
CONSOLIDATED CAPITALIZATION
The following table summarizes the changes in the Company's capitalization as at December 31, 2010,
(based on the audited financial statements of the Company included in this Prospectus), and as at such
date assuming completion of the Offering and after giving effect to the Offering. The table should be
read in conjunction with the financial statements appearing elsewhere in this Prospectus:
Designation of
Security

Authorized
Amount

Amount
Outstanding as of
December 31, 2010

Amount
Outstanding at Date
of the Prospectus

Amount Outstanding
Assuming Completion of
the Offering

Common Shares

Unlimited

22,712,093

24,378,759

(1)

Preferred Shares

Unlimited

Nil

Nil

Nil

Common Share
Purchase Warrants(2)

N/A

4,500,000

5,333,333

5,333,333

Long Term Debt

N/A

Nil

Nil

Nil

Agents' Warrants

N/A

Nil

Nil

Notes:
(1)

Does not include any Common Shares issuable on exercise of the Over-Allotment Option, the Agents' Warrants or on exercise of
stock options, or existing share purchase warrants.

008226000-00082763; 17

46
(2)

Does not include the Agents' Warrants.

OPTIONS TO PURCHASE SECURITIES

STOCK OPTION PLAN
The Stock Option Plan was adopted by the Company's board of directors on April 27, 2011. The purpose
of the Stock Option Plan is to advance the interests of the Company and its shareholders and subsidiaries
by attracting, retaining and motivating the performance of selected directors, officers, employees or
consultants of the Company of high caliber and potential and to encourage and enable such persons to
acquire and retain a proprietary interest in the Company by ownership of its stock. The Stock Option
Plan provides that, subject to the requirements of the Exchange, the aggregate number of securities
reserved for issuance, set aside and made available for issuance under the Stock Option Plan may not
exceed 10% of the issued and outstanding shares of the Company at the time of granting of options
(including all options granted by the Company to date, if applicable). The number of Common Shares
which may be reserved in any 12 month period for issuance to any one individual upon exercise of all
stock options held by that individual may not exceed 5% of the issued and outstanding Common Shares
of the Company unless the Company has obtained disinterested shareholder approval. The number of
Common Shares which may be reserved in any 12 month period for issuance to any one consultant, or to
any one employee or consultant engaged in investor relations activities may not exceed 2% of the issued
and outstanding Common Shares of the Company. The Stock Option Plan provides that options issued to
consultants performing investor relations activities will vest in stages over 12 months with no more than
of the options vesting in any three month period.
The Stock Option Plan will be administered by the board of directors of the Company, which will have
full and final authority with respect to the granting of all options thereunder. Options may be granted
under the Stock Option Plan to such directors, officers, employees or consultants of the Company and its
affiliates, if any, as the board of directors may from time to time designate. Options may also be granted
to employees of management companies providing management services to the Company. The exercise
price of any options granted under the Stock Option Plan shall be determined by the board of directors,
but may not be less than the market price of the Company's shares on the Exchange on the date of the
grant (less any discount permissible under Exchange rules) subject to a minimum price of $0.10. The
term of any options granted under the Stock Option Plan shall be determined by the board of directors at
the time of grant but, subject to earlier termination in the event of dismissal for cause, termination other
than for cause or in the event of death, the term of any options granted under the Stock Option Plan may
not exceed ten years. If desired by the board of directors of the Company, options granted under the
Stock Option Plan may be subject to vesting. Options granted under the Stock Option Plan are not to be
transferable or assignable other than by will or other testamentary instrument or pursuant to the laws of
succession. Subject to certain exceptions, in the event that a director or officer ceases to hold office,
options granted to such director or officer under the Stock Option Plan will expire 90 days after such
director or officer ceases to hold office or such longer period as determined by the board of directors of
the Company. Subject to certain exceptions, in the event that an employee, consultant or management
company employee ceases to act in that capacity in relation to the Company, options granted to such
employee, consultant or management company employee under the Stock Option Plan will expire 90 days
after such individual or entity ceases to act in that capacity in relation to the Company or such longer
period as determined by the board of directors of the Company. In the event of death of an option holder,
options granted under the Stock Option Plan expire six months from the date of the death of the option
holder, subject to the board of directors of the Company having the authority to extend the expiry date to
a maximum of twelve months from the date of death of the option holder.

008226000-00082763; 17

47
OUTSTANDING OPTIONS
The Company currently has 3,710,000 stock options outstanding. The following table summarizes the
options of the Company that will be outstanding as of the Listing Date pursuant to the Stock Option Plan.

Optionee

Designation and
number of
Securities Under
Option

Expiry Date

Purchase Price
per Common
Share

Market Value of
Common Shares as
of the date of this
Prospectus(4)

Executive Officers of the

Company(2)

1,800,000 Common
Shares

5 years(1)

Offering Price

N/A

Directors (five) of the

Company (other than
Executive Officers)(3)

1,475,000 Common
Shares

5 years(1)

Offering Price

N/A

435,000 Common
Shares

5 years (1)

Offering Price

N/A

Employees of the Company

Notes:
1.

The options are exercisable from the Listing Date to the date which is five (5) years from the Listing Date.

2.

Ian Slater, Chairman and CEO as to 700,000 options, and Tim Petterson, Director and VP Corporate Development, as to 700,000
options, Paul Robertson, the CFO, as to 150,000 options, and Alejandro Kakarieka, Vice-President Exploration, as to 250,000 options.

3.

Robert Bell as to 700,000 options; and Jeffrey Mason as to 175,000 options, and Jay Sujir as to 175,000 options; Ken Cunningham as
to 175,000 options, and Robert Pease as to 250,000 options.

4.

As the Company's shares were not listed on any stock exchange on the date of grant of the options, the market value of the Common
Shares cannot be ascertained.

AGENTS' WARRANTS
The Company has also agreed to issue to the Agents Agents' Warrants for the purchase of up to that
number of Common Shares as is equal to 3% of the Shares of the Company sold pursuant to the Offering,
exercisable at the Offering Price per Common Share for a period of eighteen months from the Closing
Date.
PRIOR SALES
The following table summarizes the sales of securities of the Company within the twelve months prior to
the date of this Prospectus.
Date

Price per Security

Number of Common
Shares

Reason for Issuance

April 30, 2010

$0.25

2,675,000

Private Placement

June 14, 2010

$0.25

1,588,000

Private Placement

July 5, 2010

$0.25

1,737,000

Private Placement

August 16, 2010

N/A

100,000

Property Option
Agreement

008226000-00082763; 17

48

Date

Price per Security

Number of Common
Shares

Reason for Issuance

October 25, 2010

$0.25

600,000

Private Placement

November 25, 2010

$0.25

338,000

Private Placement

December 16, 2010

$0.75

7,853,333

Private Placement

December 16, 2010

$0.75

320,759

Finder's Fee

December 23, 2010

N/A

100,000

Property Option
Agreement

January 25, 2011

$0.75

1,666,666

Private Placement

ESCROWED SECURITIES AND SECURITIES SUBJECT

TO CONTRACTUAL RESTRICTION ON TRANSFER
ESCROWED SECURITIES
Under the applicable policies and notices of the Canadian Securities Administrators, securities held by
Principals (as defined below) are required to be held in escrow in accordance with the national escrow
regime applicable to initial public distributions. Equity securities owned or controlled by Principals,
including Common Shares are subject to the escrow requirements.
Principals ("Principals") include all persons or companies that, on completion of the Offering, fall into
one of the following categories:
(a)

Directors and senior officers of the Company, as listed in this Prospectus;

(b)

Promoters of the Company during the two years preceding this Offering;

(c)

Those who own and/or control more than 10% of the Company's voting securities
immediately after completion of this Offering if they also have appointed or have the
right to appoint a director or senior officer of the Company or of a material operating
subsidiary of the Company;

(d)

Those who own and/or control more than 20% of the Company's voting securities
immediately after completion of this Offering; and

(e)

Associates and affiliates of any of the above.

Pursuant to the Escrow Agreement to be entered into between the Company, Computershare Investor
Services Inc. (the "Escrow Agent") and various Principals of the Company, the Principals agree to
deposit in escrow the Shares held by them (the "Escrowed Securities") with the Escrow Agent. The
Escrow Agreement will provide that the Escrowed Securities will be released from escrow in equal blocks
of 25% of a Principal's Escrowed Securities at six month intervals over the 24 months following the
Listing Date, with 25% of each Principal's holdings being first released on the date which is six months
after the Listing Date.

008226000-00082763; 17

49
Pursuant to the terms of the Escrow Agreement, the securities held in escrow may not be transferred or
otherwise dealt with during the term of the Escrow Agreement unless the transfers or dealings within the
escrow are:
1.

transfers to continuing or, upon their appointment, incoming directors and senior officers of the
Company or of a material operating subsidiary, with approval of the board of directors of the
Company;

2.

transfers to a registered retirement savings plan or similar trustee plan provided that the only
beneficiaries are the transferor or the transferor's spouse or children;

3.

transfers upon bankruptcy to the trustee in bankruptcy; and

4.

pledges to a financial institution as collateral for a bona fide loan, provided that upon a realization
the securities remain subject to escrow. Tenders of Escrowed Securities to a take-over bid are
permitted provided that, if the tenderer is a Principal of the successor corporation upon
completion of the take-over bid, securities received in exchange for tendered Escrowed Securities
are substituted in escrow on the basis of the successor corporation's escrow classification.

The complete text of the Escrow Agreement will be available for inspection at the offices of the
Company's legal counsel, Suite 1600, 609 Granville Street, Vancouver, British Columbia, V7Y 1C3.
The following table sets forth details of the issued and outstanding Common Shares of the Company that
are subject to the Escrow Agreement as of the date of this Prospectus:

Common Shares

Number of
Common
Shares
Escrowed

Percentage of
Common Shares of
the Company Prior
to Giving Effect to
the Offering

Percentage of
Common Shares of
the Company After
Giving Effect to the
Offering(1)

Ian P. Slater
Vancouver, BC

2,013,334

2,013,334

8.26%

Robert Bell
Perth, Australia

2,013,333

2,013,333

8.26%

Jeffrey Mason
Vancouver, BC

2,012,002

2,012,002

8.25%

Tim Petterson
Vancouver, BC

2,013,333

2,013,333

8.26%

Jay Sujir
Vancouver, BC

400,000

400,000

1.64%

Name and Municipality

of Residence of
Shareholder

Notes:
(1)

Based on 24,378,759 Common Shares outstanding as at the date of this Prospectus.

(2)

Assumes Common Shares are outstanding on completion of the Offering.

008226000-00082763; 17

50
SECURITIES SUBJECT TO A VOLUNTARY HOLD
Pursuant to the Agency Agreement, the Company has agreed to use its reasonable best efforts to (i)
arrange for shareholders who acquired Common Shares of the Company at a price of $0.25 per Common
Share, to agree not to sell any such Common Shares for a period of four months from the Closing Date,
and to not sell in excess of one-fifth of such Common Shares in any subsequent three month period; and
(ii) arrange shareholders who acquired Common Shares at a price of $0.75 per Common Share to agree
not to sell such Common Shares for a period of four months from the Closing Date.
PRINCIPAL SECURITYHOLDERS
To the knowledge of the directors and officers of the Company, as of the date of this Prospectus no person
beneficially owns or exercises control or direction over Common Shares carrying more than 10% of the
votes attached to the Common Shares and no person is anticipated to own more than 10% of the votes
attached to the Common Shares outstanding on completion of the Offering.
DIRECTORS AND EXECUTIVE OFFICERS
The following table provides the names, municipalities of residence, position, principal occupations and
the number of voting securities of the Company that each of the directors and executive officers
beneficially owns, directly or indirectly, or exercises control over, as of the date hereof:
Name and Municipality of Residence
and Position with the Company
Ian Slater(1)
Vancouver, BC
Chairman, CEO and Director
Robert Bell
Perth, Australia

Director/ Officer Since

Principal Occupation for the Past

Five Years

Director since January 4, 2010

Chief Executive Officer of Slater

Mining Corporation and Red Eagle
Mining Corporation

Chairman and CEO since January

4, 2010
Director since January 4, 2010

Mining Engineer

Director since January 4, 2010

Chartered Accountant

Director since January 4, 2010

Mining Engineer

Director
Jeffrey Mason(1)
Vancouver, BC
Director
Tim Petterson
Vancouver, BC
VP Corporate Development and Director
Jay Sujir(1)
Vancouver, BC

VP Corporate Development since

July 6, 2010
Director since January 4, 2010
Secretary since July 6, 2010

Corporate Secretary and Director

008226000-00082763; 17

Lawyer

51

Name and Municipality of Residence

and Position with the Company
Ken Cunningham
Reno, Nevada

Director/ Officer Since

Principal Occupation for the Past

Five Years

Director since March 28, 2011

Geologist and President, Miranda Gold

Corp.

Director since
April 14, 2011

Geologist

CFO since July 6, 2010

Chartered Accountant

Director
Robert Bruce Pease
Surrey, BC
Director
Paul Robertson
Vancouver, BC
Chief Financial Officer
Notes:
1.
Denotes a member of the Audit Committee of the Company.

The term of office of the directors expires annually at the time of the Company's annual general meeting.
The term of office of the officers expires at the discretion of the Company's directors. None of the
Company's directors or officers have entered into non-competition or non-disclosure agreements with the
Company.
As at the date of this Prospectus, the directors and officers of the Company as a group owned beneficially,
directly or indirectly or exercised control or discretion over an aggregate of 8,202,002 Common Shares
(33.64%).
Ian Slater, age 39, has been a Director, Chairman and CEO of the Company since incorporation.
Previously, Mr. Slater was the President and CEO of Fortress Minerals Corp., a Lundin Group company,
focused on gold exploration and development in Russia. Mr. Slater is currently a director of Slater
Mining Corporation and Miranda Gold Corp. From 2003 to 2007 Mr. Slater was the Managing Partner of
Ernst & Youngs Canadian mining practice. Previously, Mr. Slater was the Managing Partner of Arthur
Andersens Central Asian practice. Mr. Slater is a Canadian Chartered Accountant (1995) and holds a
BBA from Simon Fraser University (1994). Mr. Slater will devote approximately three-quarters of his
time to the affairs of the Company.
Robert Bell, age 64, has been a Director of the Company since incorporation. Mr. Bell has worked
internationally in the mining industry for over forty years. Earlier in his career he was employed as a
Mine Manager and Mine Superintendent on numerous projects. Mr. Bell was one of the founding
partners of Minproc Engineers Mining Division and was responsible for a large number of bankable
feasibility studies. Most recently, he was General Manager of the Chelopech Mine in Bulgaria. Mr. Bell
has accumulated a wealth of experience in the construction of numerous mines around the world. Mr. Bell
is a graduate Mining Engineer from the Western Australian School of Mines. Mr. Bell will devote
approximately one-half of his time to the affairs of the Company.
Tim Petterson, age 45, has been a Director and Vice President Corporate Development of the Company
since incorporation. Mr. Petterson worked for fifteen years in both Mining Consultancy and Investment
Banking in London. He has held several senior positions including Head of Global Mining Research at
HSBC and more latterly ABN AMRO, before becoming ABN AMROs Head of Pan European Equity
Research. After moving to Canada in 2004 Mr. Petterson was Managing Director Mining at Kingsdale

008226000-00082763; 17

52
Capital Markets. Mr. Petterson is a graduate Mining Engineer. Mr. Petterson will devote approximately
one-half of his time to the affairs of the Company.
Paul Robertson, age 38, is the Chief Financial Officer of the Company. Mr. Robertson was appointed
Chief Financial Officer of the Company on July 6, 2010. Mr. Robertson has over fifteen years of
accounting, auditing, and tax experience including working with Ernst & Young from 1999 to 2005.
Currently, he is the managing partner of Quantum Advisory Partners LLP, a professional services firm
dedicated to assisting publicly listed companies with their financial reporting, taxation and regulatory
requirements. Mr. Robertson holds a BA from the University of Western Ontario (1993) and obtained his
Chartered Accountant designation from the British Colombian Institute of Chartered Accountants (1997).
Mr. Robertson will devote approximately one-third of his time to the affairs of the Company.
Alejandro Kakarieka, age 53, will be Vice President Exploration of the Company from June 15, 2011.
Mr. Kakarieka was formerly with IAMGOLD Corporation where he held senior exploration roles,
including most recently Exploration Manager and Country Manager for Colombia. He joined IAMGOLD
in mid-2008 after working for eleven years with Breakwater Resources where he served as Exploration
Manager Latin America. Mr. Kakarieka has over 27 years of experience as an Exploration Geologist
throughout Latin America. He has contributed directly to the discovery of several gold deposits including
the Furioso mine in Patagonia, the Aserradero gold skarn and the Porvenir zinc-gold skarn deposits at the
Toqui district in Chile. He completed a BSc in Geology studies at the Universidad of Chile. He is a
member of the Society of Economic Geologists (SEG), the Geological Society of America (GSA) and the
Association of Applied Geochemists (AAG).
Jefferey Mason, age 54, has been a Director of the Company since incorporation. Jeffrey Mason holds a
Bachelor of Commerce degree from the University of British Columbia (1980) and obtained his Chartered
Accountant designation from the Institute of Chartered Accountants, BC in August 1982 while at the
international accounting firm of Deloitte & Touche. Following comptrollership positions at Homestake
Mining Group of companies. Mr. Mason has spent the last several years as a corporate officer and
director to a number of publicly-traded mineral exploration companies. Since December, 1996, Mr.
Mason has also been employed as Chief Financial Officer of Hunter Dickinson Inc. and his principal
occupation was the financial administration of the public companies to which Hunter Dickinson Inc.
provides services.
Jay Sujir, age 52, has been a Director of the Company since incorporation and Corporate Secretary since
July 2010. Mr. Sujir is a securities and natural resources lawyer who has extensive experience in advising
and assisting public companies. He has been a partner with Anfield Sujir Kennedy & Durno and its
predecessor firms since 1991. Mr. Sujir obtained his Bachelor of Arts degree from the University of
Victoria in 1981 with a double major in Economics and Philosophy and obtained his Bachelor of Law
degree from the University of Victoria in 1985. He is a member of the Law Society of British Columbia,
the Canadian Bar Association, and the British Columbia Advisory Committee of the TSX Venture
Exchange.
Ken Cunningham, age 62 was appointed a Director of the Company on March 28, 2011. Mr.
Cunningham has 36 years of worldwide mineral exploration experience, been involved in gold, copper
and uranium discoveries, and is currently President and CEO of Miranda Gold Corp. Prior to joining
Miranda he held executive positions with Nevada North Resources, Uranerz U.S.A., Inc. and Tenneco
Minerals Company. Mr. Cunningham is a Registered Professional Geologist and holds a BSc. degree in
Geology from Oregon State University and a MSc. in Geology from Texas Christian University.
Robert Pease, age 53, was appointed a Director of the Company on April 14, 2011. Mr. Pease is a
consultant to the mineral exploration and development business. He is currently a Director and active
strategic advisor for Richfield Ventures, a mineral exploration and development company focused on the

008226000-00082763; 17

53
Blackwater Gold project in central British Columbia, Canada. Richfield is currently subject to a friendly
proposed acquisition by New Gold Inc. Mr. Pease was previously the founder, President, CEO and a
Director of Terrane Metals Corp. from its inception in 2006 until its acquisition in 2010 by Thompson
Creek Metals Company. Terrane was a mineral exploration and development company focused on the
development of the Mt Milligan Gold/Copper project. Mr. Pease guided the company through
development studies and permitting, and initiated construction prior to the acquisition by Thompson
Creek. Previously, he was employed by Placer Dome group for 25 years. From 2002 to 2006, Mr. Pease
was the General manager, Canada Exploration and Global Major Projects, where he was responsible for
managing all aspects of Placer Dome's Canadian exploration, and overseeing the geological aspects of
world-wide advanced stated, major exploration and developments projects. Mr. Pease holds a B.Sc.
degree in Earth Science from the University of Waterloo, a Professional Geologist (British Columbia)
certification and is a Fellow of the Geologic Association of Canada. He is also a past Chairman of the
Association for Mineral Exploration British Columbia. Mr. Pease has agreed to provide geological,
exploration and technical support to the Company from time to time, as may be required.
None of the directors or officers of the Company have entered into non-competition or non-disclosure
agreements with the Company. The board of directors of the Company has constituted an audit
committee. The audit committee is comprised of Messrs. Slater, Sujir and Mason.
Corporate Cease Trade Orders
To the Company's knowledge, other than as specified below, no director or executive officer of the
Company, is as at the date of this Prospectus or has within the 10 years before the date of this Prospectus
been a director or executive officer of any issuer that:
(a)

was subject to a cease trade order or similar order or an order that denied the company
access to any statutory exemptions, that was in effect for a period of more than 30
consecutive days, and that was issued while the director or executive officer was acting in
such capacity as director, chief executive officer or chief financial officer; or

(b)

was subject to a cease trade order or similar order or an order that denied the company
access to any statutory exemptions, that was in effect for a period of more than 30
consecutive days, and that was issued after the director or executive officer ceased to be a
director, chief executive officer or chief financial officer and which resulted from an
event that occurred while that person was acting in the capacity as director, chief
executive officer or chief financial officer.

Jay Sujir is currently a director of Escape Gold Inc. and a former director of American Bullion
Minerals Limited, both of which companies have been subject to cease-trade orders in Alberta
and British Columbia for extended periods of time for failure to file financial statements. Mr.
Sujir had no association with these companies whatsoever at the time the financial statements
became overdue or when the cease trade orders were made, and he became a director solely to
assist in the resurrection of such companies.
Bankruptices
To the Company's knowledge, other than as set forth below, no director or executive officer of the
Company or a shareholder holding a sufficient number of securities of the Company to affect materially
the control of the Company:
(a)

is, as at the date of this Prospectus, or has been within the 10 years before the date hereof,
a director or executive officer of any company (including the Company) that, while that
person was acting in that capacity, or within a year of that person ceasing to act in that

008226000-00082763; 17

54
capacity, became bankrupt, made a proposal under any legislation relating to bankruptcy
or insolvency or was subject to or instituted any proceedings, arrangement or
compromise with creditors or had a receiver, receiver manager or trustee appointed to
hold its assets; or
(b)

has, within the 10 years before the date of this Prospectus, become bankrupt, made a
proposal under any legislation relating to bankruptcy or insolvency, or become subject to
or instituted any proceedings, arrangement or compromise with creditors, or had a
receiver, receiver manager or trustee appointed to hold assets of the director, executive
officer or shareholder.

Penalties or Sanctions
To the Company's knowledge, no director or executive officer of the Company or a shareholder holding a
sufficient number of securities of the Company to affect materially the control of the Company, has been
subject to:
(a)

any penalties or sanctions imposed by a court relating to securities legislation or by a

securities regulatory authority or has entered into a settlement agreement with a securities
regulatory authority; or

(b)

any other penalties or sanctions imposed by a court or regulatory body that would likely
be considered important to a reasonable investor making an investment decision.

Conflicts of Interest
The directors of the Company are required by law to act honestly and in good faith with a view to the best
interests of the Company and to disclose any interests, which they may have in any project or opportunity
of the Company. If a conflict of interest arises at a meeting of the board of directors of the Company, any
director or officer in a conflict is required to disclose his interest and any director in a conflict is required
to abstain from voting on such matter.
Other than disclosed herein, there are no known existing or potential conflicts of interest among the
Company, its promoters, directors and officers or other members of management of the Company or of
any proposed promoter, director, officer or other member of management as a result of their outside
business interests except that certain of the directors and officers serve as directors and officers of other
companies, and therefore it is possible that a conflict may arise between their duties to the Company and
their duties as a director or officer of such other companies. See ''Risk Factors''.
EXECUTIVE COMPENSATION
COMPENSATION DISCUSSION AND ANALYSIS
The Company's approach to executive compensation has been to provide suitable compensation for
executives that is internally equitable, externally competitive and reflects individual achievement. The
Company attempts to maintain compensation arrangements that will attract and retain highly qualified
individuals who are able and capable of carrying out the objectives of the Company.
The Company's compensation arrangements for the NEOs (as hereinafter defined) may, in addition to
salary, include compensation in the form of bonuses and, over a longer term, benefits arising from the
grant of stock options. Given the stage of development of the Company, compensation of the NEOs to
date has emphasized meaningful stock option awards to attract and retain management, and to a certain
extent, to conserve cash. This policy may be re-evaluated in the future to instead emphasize increased
008226000-00082763; 17

55
base salaries and cash bonuses with a reduced reliance on option awards, depending upon the future
development of the Company and other factors which may be considered relevant by the Board of
Directors from time to time.
During the financial year ended December 31, 2010, (i) the President and Chief Executive Officer of the
Company was paid a salary of $150,000; and (ii) the Chief Financial Officer of the Company received
$31,200. The Company has not established a Compensation Committee. The Board of Directors as a
whole, establishes and reviews the Company's overall compensation philosophy and its general
compensation policies with respect to executive officers, including the corporate goals and objectives and
the annual performance objectives relevant to such officers. The Board evaluates each officer's
performance in light these goals and objectives and, based on its evaluation, approved the salary, bonus,
options and other benefits for such officers. In determining compensation matters, the Board may
consider a number of factors, including the Company's performance, the value of similar incentive awards
to officers performing similar functions at comparable companies, the awards given in past years and
other factors it considers relevant. The current overall objectives of the Company's compensation strategy
is to reward management for their efforts, while seeking to conserve cash. With respect to any bonuses or
incentive plan grants which may be awarded to executive officers in the future, the Company has not
currently set any objective criteria and will instead rely upon any recommendations and discussions at the
board level with respect to the above-noted considerations and any other matters which the Board of
Directors may consider relevant on a going-forward basis, including the cash position of the Company.
The Company currently anticipates that following the Offering, (i) Ian Slater will be paid an annual salary
of approximately $250,000; (ii) Alejandro Kakarieka will be paid an annual salary of approximately
$200,000; and (iii) Robert Bell and Tim Petterson will each be paid an annual salary of approximately
$100,000.
Existing options held by management at the time of subsequent option grants are taken into consideration
in determining the quantum or terms of any such subsequent option grants. Options have been granted to
directors, management, employees and certain service providers as long-term incentives to align the
individual's interests with those of the Company. The size of the option awards is in proportion to the
deemed ability of the individual to make an impact on the Company's success. See "Options to Purchase
Securities".
In the last financial year of the Company ended December 31, 2010, the Company had two executive
officers, Ian Slater, the Chairman and CEO of the Company and Paul Robertson, the CFO (each a
"NEO"). The following table sets out certain information respecting the compensation paid to the NEOs
for the most recently completed fiscal year of the Company ended December 31, 2010:

008226000-00082763; 17

56
Summary Compensation Table
Name and
principal
position

Year

Salary
($)

Sharebased
awards
($)

Optionbased
awards
($)

Non-equity incentive
plan compensation
($)

Pension value
($)

All other
compensation
($)

Total
Compensation
($)

(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

Annual
Incentive
Plans

Long-term
incentive
plans

(f1)

(f2)

Ian Slater
Chairman/CEO

2010

150,000

Nil

Nil

Nil

Nil

Nil

3,209

$153,209(2)

Paul Robertson
CFO

2010(1)

31,200

Nil

Nil

Nil

Nil

Nil

Nil

$31,200

(1)

Mr. Robertson was appointed CFO of the Company on July 6, 2010.

(2)

Pursuant to a management services agreement with SB Management Ltd. dated January 1, 2010, the Company has agreed to reimburse
SB Management Ltd. for management and administrative services, including rent, telephone, etc. provided to the Company. SB
Management Ltd. is controlled by three directors of the Company. See "Interest of Management and Others in Material Transactions".

INCENTIVE PLAN AWARDS

Common Share Purchase Plan
The Company has in effect the Stock Option Plan in order to provide effective incentives to directors,
officers, senior management personnel and employees of the Company and to enable the Company to
attract and retain experienced and qualified individuals in those positions by permitting such individuals
to directly participate in an increase in per share value created for the Company's shareholders. The
Company has no equity incentive plans other than the Stock Option Plan.
Outstanding Share-Based Awards and Option-Based Awards
The following table sets forth particulars of all outstanding share-based and option-based awards granted
to the Named Executive Officers and which were outstanding at December 31, 2010:
Option-based Awards

Share-based Awards

Number of
securities
underlying
unexercised
options
(#)

Option
exercise
price
($)

Option
expiration date

Value of
unexercised inthe-moneyoptions(1)
($)

Number of
shares or units
of shares that
have not
vested
(#)

Market or
payout value
of share-based
awards that
have not
vested
($)

(b)

(c)

(d)

(e)

(f)

(g)

Ian Slater

Nil

N/A

N/A

Nil

N/A

N/A

Paul Robertson

Nil

N/A

N/A

Nil

N/A

N/A

Name

(a)

008226000-00082763; 17

57
Incentive Plan Awards Value Vested Or Earned During The Year
The following table sets forth particulars of the value vested or earned during the year ended December
31, 2010, in respect of incentive awards to the Named Executive Officers:
Name

Option-based awards
Value vested during the
year
($)

Share-based awards
Value vested during the
year
($)

Non-equity incentive plan

compensationValue earned
during the year
($)

Ian Slater

Nil

Nil

Nil

Paul Robertson

Nil

Nil

Nil

TERMINATION AND CHANGE OF CONTROL BENEFITS

During the year ended December 31, 2010, the Company did not have any contracts, agreements, plans or
arrangements in place with any NEO that provides for payment following or in connection with any
termination (whether voluntary, involuntary or constructive), resignation, retirement, a change of control
of the Company or a change in an NEO's responsibilities.
COMPENSATION OF DIRECTORS
NARRATIVE DISCUSSION
Directors Compensation
The only arrangements the Company has pursuant to which directors are compensated by the Company
for their services in their capacity as directors, or for committee participation, involvement in special
assignments or for services as consultant or expert during the most recently completed financial year or
subsequently, are by the issuance of incentive stock options pursuant to the Company's Stock Option
Plan.
The purpose of granting such options is to assist the Company in compensating, attracting, retaining, and
motivating the directors of the Company and to closely align the personal interests of such persons to that
of the shareholders.
Director Compensation Table
The Company paid no compensation to its directors who were not named executive officers during the
year ended December 31, 2010. Pursuant to a management services agreement with SB Management Ltd.
dated January 1, 2010, the Company has agreed to reimburse SB Management Ltd. for management and
administrative services, including, rent, telephone, etc., provided to the Company. Three of the directors
of the Company are shareholders of SB Management Ltd.
Outstanding Share-Based Awards and Option-Based Awards
There were no share-based and option-based awards granted to the directors during the year ended
December 31, 2010.

008226000-00082763; 17

58
Incentive Plan Awards Value Vested Or Earned During The Year
No incentive plan awards vested or were earned during the period ended December 31, 2010 in respect of
incentive awards to the directors.
INDEBTEDNESS OF DIRECTORS AND EXECUTIVE OFFICERS
No individual who is, or at any time since the incorporation of the Company was, a director, executive
officer or employee of the Company or any associate of any of them, is or has been indebted to the
Company or has any indebtedness to another entity which has been the subject of a guarantee, support
agreement, letter of credit or similar arrangement by the Company.
AUDIT COMMITTEE
The charter of the Company's audit committee and the other information required to be disclosed by Form
52-110F2 is attached to this Prospectus as Schedule "A".
CORPORATE GOVERNANCE
The information required to be disclosed by National Instrument 58-101 Disclosure of Corporate
Governance Practices is attached to this Prospectus as Schedule "B".
PLAN OF DISTRIBUTION
Pursuant to the Agency Agreement, the Company has appointed the Agents to offer for sale to the public
on a "best efforts" basis, without underwriter liability, and the Company has agreed to issue and sell,
Offered Shares at the Offering Price for aggregate gross proceeds of $, payable in cash to the Company
against delivery of certificates representing the Offered Shares, all subject to the terms and conditions
contained in the Agency Agreement. The distribution will not continue for a period of more than 90 days
after the date of receipt for the (final) prospectus if subscriptions representing the entire Offering are not
obtained within that period, unless each of the persons who subscribed during that period has consented to
the continuation and an amendment to the prospectus has been filed and a receipt obtained from the
Securities Commissions in the Selling Provinces. Funds received in connection with subscriptions during
this 90 day period will be held by the Agents as depository and if the entire Offering is not achieved
during this period, the funds will be returned to the subscribers unless the subscribers have otherwise
instructed the Agents. The Offering Price was determined by negotiation between the Company and the
Agents, based upon several factors, including the history of, and prospects for, the Company's business
and the industry in which it competes and an assessment of the Company's management, operations and
financial results and may bear no relationship to the price that will prevail in the public market.
The Company has also granted the Agents an Over-Allotment Option, exercisable not later than 30 days
after the Closing Date, to sell up to such number of Additional Shares as is equal to 15% of the aggregate
number of Offered Shares sold under the Offering. The Over-Allotment Option is exercisable in whole or
in any part, at the Agents' sole discretion, only for the purpose of covering over-allotments, if any, made
by the Agents in connection with the Offering and for market stabilization purposes. In the event that the
Agents exercise the Over-Allotment Option in full, the number of Shares issued under the Offering will
be , the price to the public will be $, the Agents' Commission will be $ and the net proceeds to the
Company (excluding estimated expenses of the Offering) will be $. This prospectus also qualifies the
grant of the Over-Allotment Option and the distribution of the Additional Shares issuable on exercise
of the Over-Allotment Option. A purchaser that acquires Shares forming part of the Agents' overallotment position acquires the Additional Shares under this Prospectus, regardless of whether the over-

008226000-00082763; 17

59
allocation position is ultimately filled through the exercise of the Over-Allotment Option or secondary
market purchases.
In consideration for the services provided by the Agents in connection with the Offering and pursuant to
the terms of the Agency Agreement, the Company has agreed to pay the Agents the Agents' Fee, equal to
6% of the aggregate gross proceeds of the Offering ($ per Share), for an aggregate commission of $
(or $ in the event of the full exercise of the Over-Allotment Option). As additional consideration, the
Agents (and any selling group members) will also be granted the Agents' Warrants to acquire that number
of Common Shares as is equal to 3% of the aggregate number of Shares sold pursuant to the Offering at
the Offering Price for a period of 18 months from the date of issuance thereof. The Company will also
pay certain expenses of the Agents in connection with the Offering as set forth in the Agency Agreement.
This prospectus qualifies the distribution of the Agents' Warrants.
The Agents are acting as agents of the Company in connection with the Offering pursuant to the Agency
Agreement and subject to certain legal matters to be passed on behalf of the Company, by Anfield Sujir
Kennedy & Durno LLP, and on behalf of the Agents, by Blake, Cassels & Graydon LLP.
Subscriptions will be received subject to rejection or allotment in whole or in part and the Agents reserve
the right to close the subscription books at any time without notice. Other than the Shares offered or sold
in the United States, which will be represented by individual certificates, registration of interests in and
transfers of Shares held through CDS or its nominee will be made electronically through the NCI system
of CDS. Shares registered to CDS or its nominee will be deposited electronically with CDS on an NCI
basis on the closing of the Offering. A purchaser of Shares (other than a purchaser of Shares in the
United States) will receive only a customer confirmation from a registered dealer that is a CDS participant
and from or through which the Shares are purchased.
The Offering is being made concurrently in each of the Selling Provinces. The Shares will be offered
through the Agents directly. Subject to applicable law, the Agents may offer the Shares outside of
Canada. The obligations of the Agents under the Agency Agreement may be terminated at their
discretion on the basis of their assessment of the state of the financial markets and may also be terminated
upon the occurrence of certain stated events, including any material adverse change in the business or
financial condition of the Company. The Agents are not obligated, directly or indirectly, to advance their
own funds to purchase any of the Shares. The Agents may offer selling group participation to other
registered dealers, with compensation to be negotiated between the Agents and such selling group
participants, but at no additional cost to the Company.
The Company has agreed to indemnify the Agents and their affiliates and the respective directors,
officers, agents and employees thereof against certain liabilities pursuant to the Agency Agreement,
including liabilities under Canadian securities legislation.
Under the terms of the Agency Agreement, the Company has agreed not to issue or announce the issue of
any Common Shares or any securities convertible into or exchangeable for or exercisable to acquire
Common Shares for a period of 180 days following the Closing Date, without the prior written consent of
Raymond James Ltd., such consent not to be unreasonably withheld or delayed, other than: (a) pursuant to
the Offering, including the exercise of the Over-Allotment Option; (b) pursuant to the grant or exercise of
stock options and other similar issuances pursuant to the Plan and other existing share compensation
arrangements; (c) pursuant to the exercise of outstanding options and warrants; and (d) in connection with
any arm's-length property acquisitions or existing property agreements.
In addition, as a condition to the closing of the Offering, each of the directors, officers and employees of
the Company and their respective associates (as such term is defined in the Securities Act (Ontario)) will
be required to execute and deliver an undertaking in favour of the Agents in which they will covenant and
agree that, for a period of six months following the Closing Date, they will not directly or indirectly,
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offer, sell, contract to sell, lend, swap, or enter into any agreement to transfer the economic consequences
of or otherwise dispose of or deal with, or publicly announce any initiation to do so, any equity securities
of the Company owned or controlled, directly or indirectly by them, and subsequent to such six month
period will not sell in excess of 1/4 of such securities in any six month period without the prior written
consent of Raymond James Ltd., such consent not to be unreasonably withheld or delayed.
The Agency Agreement also provides that if the Offering is not completed as a result of the Company
entering into an alternative business transaction (defined to include an alternative financing, or sale of all
or a portion of the Company or a subsidiary or a material asset), then the Company will pay to Raymond
James Ltd. an amount equal to one-half of the Agents' Commission.
The Shares offered hereby have not been and will not be registered under the U.S. Securities Act or any
state securities laws and, subject to registration under the U.S. Securities Act and applicable state
securities laws or certain exemptions therefrom, may not be offered, sold, transferred, delivered or
otherwise disposed of, directly or indirectly, within the United States. Each Agent has agreed that, except
as permitted under the Agency Agreement, it will not offer, sell, transfer, deliver or otherwise dispose of,
directly or indirectly, the Shares at any time within the United States. The Agency Agreement permits the
Agents to offer the Shares for sale directly by the Company to certain ''accredited investors'' (within the
meaning of Rule 501(a) of Regulation D under the U.S. Securities Act), provided that such offers and
sales are made in accordance with the exemption from the registration requirements of the U.S. Securities
Act provided by Rule 506 of Regulation D under the U.S. Securities Act, and similar exemptions under
applicable state securities laws. Moreover, the Agency Agreement provides that the Agents will offer and
sell the Shares outside the United States only in accordance with Rule 903 of Regulation S under the U.S.
Securities Act. The Shares sold in the United States will be "restricted securities" within the meaning of
Rule 144 under the U.S. Securities Act. The certificates representing the Shares which are offered or sold
in the United States will contain a legend to the effect that the Shares have not been registered under the
U.S. Securities Act or applicable state securities laws and may only be offered, sold or otherwise
transferred pursuant to certain exemptions from the registration requirements of the U.S. Securities Act
and applicable state securities laws.
This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the Shares in
the United States. In addition, until 40 days after the commencement of the Offering, an offer or sale of
the Shares within the United States by any dealer (whether or not participating in the Offering) may
violate the registration requirements of the U.S. Securities Act if such offer or sale is made otherwise than
in accordance with an exemption from registration under the U.S. Securities Act.
There is currently no market through which any of the securities of the Company, including the Shares,
may be sold and purchasers hereunder may not be able to resell or dispose of any of the securities
purchased, distributed or qualified under this prospectus.
LISTING OF COMMON SHARES
The Company has applied to list its Common Shares, and any Shares issued or issuable pursuant to the
Agency Agreement on the Exchange. Listing will be subject to the Company fulfilling all the listing
requirements of the Exchange.
As at the date of this Prospectus, the Company does not have any of its securities listed or quoted,
has not applied to list or quote any of its securities, and does not intend to apply to list or quote any
of its securities on The Toronto Stock Exchange, a U.S. marketplace, or a marketplace outside
Canada and the United States of America other than the Alternative Investment Market of the
London Stock Exchange of The Plus Markets operated by The Plus Markets Group PLC.

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RISK FACTORS
Investing in the Shares is speculative and involves a high degree of risk due to the business and present
stage of exploration of the Company's mineral properties. The Company has identified below certain
significant risks to potential investors in the Company, but it has not identified all of the risks associated
with an investment in securities of the Company. If any of these risks materialize into actual events or
circumstances or other possible additional risks and uncertainties of which the Company is currently
unaware actually occur, the Company's assets, liabilities, financial condition, results of operations
(including future results of operations), business and business prospects, are likely to be material and
adversely affected. In such circumstances, the price of the Company's securities could decline and
investors may lose all or part of their investment. Readers should carefully consider the following risks
described below.
Exploration, Development and Operations
Exploration and development of mineral deposits involves a high degree of risk which even a
combination of careful evaluation, experience and knowledge may not eliminate. Few properties which
are explored are ultimately developed into producing properties. Any potential determination as to
whether a mineral deposit will be commercially viable can be affected by such factors as: deposit size,
grade, unusual or unexpected geological formations and metallurgy; proximity to infrastructure; metal
prices which are highly cyclical; environmental factors; unforeseen technical difficulties; work
interruptions; and government regulations, including regulations relating to permitting, prices, taxes,
royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The
exact effect of these factors cannot be accurately predicted.
The long term profitability of the Company's operations will be in part directly related to the cost and
success of its exploration programs, which may be affected by a number of factors. Substantial
expenditures are required to establish reserves through drilling, to develop processes to extract the
resources and, in the case of new properties, to develop the extraction and processing facilities and
infrastructure at any site chosen for extraction. Although substantial benefits may be derived from the
discovery of a major deposit, no assurance can be given that any such deposit will be commercially viable
or that the funds required for development can be obtained on a timely basis.
Mining operations generally involve a high degree of risk. The Company's operations will be subject to
all the hazards and risks normally encountered in the exploration, development and production of gold
and copper, including unusual and unexpected geologic formations, seismic activity, rock bursts, caveins, flooding and other conditions involved in the drilling and removal of material, any of which could
result in damage to, or destruction of, the mine and other producing facilities, damage to life or property,
environmental damage and possible legal liability. Although appropriate precautions to mitigate these
risks are taken, operations are subject to hazards such as equipment failure or failure of structures which
may result in environmental pollution and consequent liability. Even though the Company intends to
obtain liability insurance in an amount which it considers adequate, the nature of these risks is such that
liabilities might exceed policy limits, the liabilities and hazards might not be insurable, or the Company
might not elect to insure itself against such liabilities due to high premium costs or other reasons, in
which event the Company could incur significant costs that could have a material adverse effect upon its
financial condition.
Risks with Title to Mineral Properties
Title to the properties comprising the Santa Rosa Project and the Pavo Real Project is subject to the terms
of the applicable Option Agreements which require the Company to make certain payments in order to
retain its interest in the properties. The Company may fail to, or may choose not to, make such payments,
in which case it will forfeit its interests in such properties. The Company's right to acquire an interest in
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the Mina Vieja project is subject to certain conditions, including the current owners first transferring their
title in the properties to MV Columbia, a Colombian simplified stocks corporation. If the current owners
fail to satisfy the conditions of their agreement with the Company, the Company will not be able to secure
its indirect interest in the Mina Vieja properties and will not be able to proceed with its planned
exploration activities. Any failure by the Company to obtain or retain title to properties which comprise
its projects could have material adverse effect on the Company and the value of the Common Shares.
The Company does not maintain insurance against title. Title on mineral properties and mining rights
involves certain inherent risks due to the difficulties of determining the validity of certain claims as well
as the potential for problems arising from the frequently ambiguous conveyance history of many mining
properties. The Company has diligently investigated and continues to diligently investigate and validate
title to its mineral claims; however, this should not be construed as a guarantee of title. The Company is
continuously in the process of establishing the certainty of the title of mineral concessions which it holds
either directly or through its equity interest in its subsidiaries or will be seeking to consolidate those titles
through a government-sanctioned process. The Company cannot give any assurance that title to
properties it acquired individually or through historical share acquisitions will not be challenged or
impugned and cannot guarantee that the Company will have or acquire valid title to these mining
properties.
The Company Has No Mineral Properties in Production or Under Development
The Company does not currently have mineral properties under development. The future development of
properties found to be economically feasible, and the development of which is approved by the Board,
will require the construction and operation of mines, processing plants and related infrastructure. As a
result, the Company is and will continue to be subject to all of the risks associated with establishing new
mining operations, including:

the timing and cost, which can be considerable, of the construction of mining and processing
facilities;

the availability and cost of skilled labour and mining equipment;

the need to obtain necessary environmental and other governmental approvals and permits and
the

timing of the receipt of those approvals and permits;

the availability of funds to finance construction and development activities;

potential opposition from non-governmental organizations, environmental groups or locals;

groups which may delay or prevent development activities; and

potential increases in construction and operating costs due to changes in the cost of fuel, power,
materials and supplies.

The costs, timing and complexities of developing the Company's projects may be greater than anticipated
because the majority of such property interests are not located in developed areas, and, as a result, the
Company's property interests may not be served by appropriate road access, water and power supply and
other support infrastructure. Cost estimates may increase as more detailed engineering work is completed
on a project. It is common in new mining operations to experience unexpected costs, problems and
delays during construction, development and mine start-up. In addition, delays in the early stages of

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mineral production often occur. Accordingly, the Company cannot provide assurance that its activities
will result in profitable mining operations at its mineral properties.
Metal Price Volatility
The Company's business is strongly affected by the world market price of gold. If the world market price
of gold were to drop and the prices realized by the Company on gold sales were to decrease significantly
and remain at such a level for any substantial period, the Company's profitability and cash flow would be
negatively affected.
Gold prices can be subject to volatile price movements, which can be material and can occur over short
periods of time and are affected by numerous factors, all of which are beyond the Company's control.
Industry factors that may affect the price of gold include: industrial and jewellery demand; the level of
demand for gold as an investment; central bank lending, sales and purchases of gold; speculative trading;
and costs of and levels of global gold production by producers of gold. Gold prices may also be affected
by macroeconomic factors, including: expectations of the future rate of inflation; the strength of, and
confidence in, the U.S. dollar, the currency in which the price of gold is generally quoted, and other
currencies; interest rates; and global or regional, political or economic uncertainties.
Depending on the market price of gold, the Company may determine that it is not economically feasible
to continue some or all of its operations or the development of some or all of the its projects, as
applicable, which could have an adverse impact on the Company's financial performance and results of
operations. In such a circumstance, the Company may also curtail or suspend some or all of its
exploration activities.
History of Losses and No Immediate Foreseeable Earnings
The Company has a history of losses and there can be no assurance that it will ever be profitable. The
Company expects to continue to incur losses unless and until such time as it develops its properties and
commences mining operations on its properties. The development of the properties will require the
commitment of substantial financial resources. The amount and timing of expenditures will depend on a
number of factors, some of which are beyond the Company's control, including the progress of ongoing
exploration, studies and development, the results of consultant analysis and recommendations, the rate at
which operating losses are incurred and the execution of any joint venture agreements with any strategic
partners, if any. There can be no assurance that the Company will ever achieve profitability.
Mining Risks and Insurance Risks
The mining industry is subject to significant risks and hazards, including environmental hazards,
industrial accidents, unusual or unexpected geological conditions, labour force disruptions, civil strife,
unavailability of materials and equipment, weather conditions, pit wall failures, rock bursts, cave-ins,
flooding, seismic activity, water conditions and gold bullion losses, most of which are beyond the
Company's control. These risks and hazards could result in: (i) damage to, or destruction of, mineral
properties or producing facilities; personal injury or death; environmental damage; (ii) delays in mining;
and (iii) monetary losses and possible legal liability. As a result, production may fall below historic or
estimated levels and the Company may incur significant costs or experience significant delays that could
have a material adverse effect on the Company's financial performance, liquidity and results of operation.
The Company does not maintain insurance to cover these risks and hazards. The lack of, or insufficiency
of, insurance coverage could adversely affect the Company's cash flow and overall profitability.

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Permitting Approvals
The operations of the Company and the exploration agreements into which it has entered require
approvals, licenses and permits from various regulatory authorities, governmental and otherwise
(including project specific governmental decrees) that are by no means guaranteed. The Company
believes that it holds or will obtain all necessary approvals, licenses and permits under applicable laws
and regulations in respect of its main projects and, to the extent that they have already been granted,
believes it is presently complying in all material respects with the terms of such approvals, licenses and
permits. However, such approvals, licenses and permits are subject to change in various circumstances
and further project-specific governmental decrees and/or legislative enactments may be required. There
can be no guarantee that the Company will be able to obtain or maintain all necessary approvals, licenses
and permits that may be required and/or that all project-specific governmental decrees and/or required
legislative enactments will be forthcoming to explore and develop the properties on which it has
exploration rights, commence construction or operation of mining facilities or to maintain continued
operations that economically justify the costs involved.
Changes in Legislation
The mining industry in Colombia is subject to extensive controls and regulations imposed by various
levels of government. All current legislation is a matter of public record and the Company will be unable
to predict what additional legislation or amendments may be enacted. Amendments to current laws,
regulations and permits governing operations and activities of mining companies, including
environmental laws and regulations which are evolving in Colombia, or more stringent implementation
thereof, could have a material adverse impact on the Company and cause increases in expenditures and
costs, affect the Company's ability to expand or transfer existing operations or require the Company to
abandon or delay the development of new properties.
Economic and Political Factors in Colombia
Although Colombia has a long-standing tradition respecting the rule of law, which has been bolstered in
recent years by the present and former government's policies and programs, no assurances can be given
that the Company's plans and operations will not be adversely affected by future developments in
Colombia. The Company's property interests and proposed exploration activities in Colombia are subject
to political, economic and other uncertainties, including the risk of expropriation, nationalization,
renegotiation or nullification of existing contracts, mining licenses and permits or other agreements,
changes in laws or taxation policies, currency exchange restrictions, and changing political conditions and
international monetary fluctuations. Future government actions concerning the economy, taxation, or the
operation and regulation of nationally important facilities such as mines, could have a significant effect on
the Company. Colombia is home to South America's largest and longest running insurgency. While the
situation has improved dramatically in recent years, there can be no guarantee that the situation will not
again deteriorate. Any increase in kidnapping, gang warfare, homicide and/or terrorist activity in
Colombia generally may disrupt supply chains and discourage qualified individuals from being involved
with the Company's operations.
Additionally, the perception that matters have not improved in Colombia may hinder the Company's
ability to access capital in a timely or cost effective manner. Any changes in regulations or shifts in
political attitudes are beyond the Company's control and may adversely affect the Company's business.
Exploration may be affected in varying degrees by government regulations with respect to restrictions on
future exploitation and production, price controls, export controls, foreign exchange controls, income
and/or mining taxes, expropriation of property, environmental legislation and mine and/or site safety.
Presidential elections for the 2010-2014 term were held in Colombia on May 30, 2010 (first round) and
June 20, 2010 (second round, since no one candidate reached 50% of the vote in the first round). The
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elected president, Mr. Juan Manuel Santos, took office on August 7, 2010 and it is anticipated that the
current government will not materially change polices regarding resource development and investment
policies in a way that could adversely affect the Company's business.
Competition
The mineral exploration and mining business is competitive in all of its phases. The Company competes
with numerous other parties with greater financial, technical and other resources than the Company, in the
search for and acquisition of exploration and development rights on attractive mineral properties. The
Company's ability to acquire exploration and development rights on properties in the future will depend
not only on its ability to develop the properties on which it currently has exploration and development
rights, but also on its ability to select and acquire exploration and development rights on suitable
properties for exploration and development. There is no assurance that the Company will continue to be
able to compete successfully in acquiring exploration and development rights on such properties.
Changes to Environmental Laws
The Company's operations are subject to the extensive environmental risks inherent in the gold mining
industry. The current or future operations of the Company, including development activities,
commencement of production on its properties, potential mining and processing operations and
exploration activities require permits from various governmental authorities and such operations are and
will be governed by laws and regulations governing prospecting, development, mining, production,
exports, taxes, labor standards, occupational health, waste disposal, toxic substances, land use,
environmental protection, mine safety and other matters.
Companies engaged in the development and operation of mines and related facilities generally experience
increased costs, and delays in production and other schedules as a result of the need to comply with
applicable laws, regulations and permits. Existing and possible future environmental legislation,
regulations and actions could cause significant additional expense, capital expenditures, restrictions and
delays in the activities of the Company. Although the Company believes that it is in substantial
compliance in all material respects with applicable material environmental laws and regulations, there are
certain risks inherent in its activities such as accidental spills, leakages or other unforeseen circumstances,
which could subject the Company to extensive liability. In addition, the Company cannot assure that the
illegal miners operating on its properties are in compliance with applicable environmental laws and
regulations.
Failure to comply with applicable laws, regulations, and permitting requirements may result in
enforcement actions thereunder, including orders issued by regulatory or judicial authorities causing
operations to cease or be curtailed, and may include corrective measures requiring capital expenditures,
installation of additional equipment, or remedial actions. Parties engaged in mining operations may be
required to compensate those suffering loss or damage by reason of the mining activities and may have
civil or criminal fines or penalties imposed for violations of applicable laws or regulations. Amendments
to current laws, regulations and permits governing operations and activities of mining companies, or more
stringent implementation thereof, could have a material adverse impact on the Company and cause
increases in capital expenditures or production costs or reduction in levels of production at producing
properties or require abandonment or delays in development of new mining properties.
Shortage of Experienced Personnel and Equipment
The ability to identify, negotiate and consummate transactions that will benefit the Company is dependent
upon the efforts of the Company's management team. The loss of the services of any member of
management could have a material adverse effect on the Company. The Company's future drilling
activities may require significant investment in additional personnel and capital equipment. Given the
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current level of demand for equipment and experienced personnel within the mining industry, there can be
no assurance that the Company will be able to acquire the necessary resources to successfully implement
its business plan.
Furthermore, certain of the directors and officers of the Company are directors and officers of other
reporting issuers and, as such, will devote only a portion of their time to the affairs of the Company.
Conflicts of Interest
Certain of the Company's directors and officers serve as directors or officers of other companies or have
significant shareholdings in other resource companies and, to the extent that such other companies
participate in ventures in which the Company may participate, the directors of the Company will have a
conflict of interest in negotiating and concluding terms respecting the extent of such participation. In the
event that such a conflict of interest arises, a director or officer who has such a conflict will disclose that
conflict and will abstain from voting for or against the approval of such participation or such terms. In
determining whether or not the Company will participate in a particular program and the interest therein
to be acquired by it, the directors will consider, among other things, the degree of risk to which the
Company may be exposed and its financial position at that time.
Possible Volatility of Stock Price
The market price of the Common Shares can be subject to wide fluctuations in response to factors such as
actual or anticipated variations in the Company's results of operations, changes in financial estimates by
securities analysts, general market conditions, the issuance of Common Shares in connection with
acquisitions made by the Company or otherwise, and other factors. Market fluctuations, as well as
general economic, political and market conditions such as recessions, interest rate changes or
international currency fluctuations may adversely affect the market price of the Common Shares.
Repatriation of Earnings Risk
There are currently no restrictions on the repatriation from Colombia of earnings to foreign entities.
However, there can be no assurance that restrictions on repatriations of earnings from Colombia will not
be imposed in the future. Exchange control regulations require that any proceeds in foreign currency
originated on exports of goods from Colombia (including minerals) be repatriated to Colombia.
However, purchase of foreign currency is allowed through any Colombian authorized financial entities for
the purpose of payments to foreign suppliers, repayment of foreign debt, payments of dividends to foreign
stockholders and other foreign expenses.
Financing Risks
Additional funding may be required to complete the proposed or future exploration and other programs on
the properties. There is no assurance that any such funds will be available. Failure to obtain additional
financing, if required, on a timely basis, could cause the Company to reduce or delay its proposed
operations.
The majority of sources of funds currently available to the Company for its acquisition and development
projects are in large portion derived from the issuance of equity. While the Company has been successful
in the past in obtaining equity financing to undertake its currently planned exploration and development
programs, there is no assurance that it will be able to obtain adequate financing in the future or that such
financing will be on terms advantageous to the Company.

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Enforcement of Civil Liabilities
Substantially all of the Company's assets are located outside of Canada and certain of the directors and
officers of the Company are resident outside of Canada. As a result, it may be difficult or impossible to
enforce judgments granted by a court in Canada against the assets of the Company or any of the
Company's directors and officers residing outside of Canada.
Dividends
Any payments of dividends on the Common Shares will be dependent upon the financial requirements of
the Company to finance future growth, the financial condition of the Company and other factors which
the Board may consider appropriate in the circumstance. It is unlikely that the Company will pay
dividends in the immediate or foreseeable future.
Infrastructure
Mining, processing, development and exploration activities depend, to one degree or another, on adequate
infrastructure. Reliable roads, bridges, power sources and water supply are important determinants,
which effect capital and operating costs. Unusual or infrequent weather phenomena, terrorism, sabotage,
community, government or other interference in the maintenance or provision of such infrastructure could
adversely affect the Company's operations, financial condition and results of operations.
Joint Ventures
The Company is party to the Pavo Real Shareholder Agreement and may enter into other joint ventures in
the future, including on the Mina Vieja Project, if the Company does not exercise the Mina Vieja Third
Option. Any failure of a joint venture partner to meet its obligations to the Company or third parties, or
any disputes with respect to the parties' respective rights and obligations could have a material adverse
effect on such joint ventures. In addition, the Company may be unable to exert influence over strategic
decisions made in respect of properties that are the subject of such joint ventures and could suffer dilution
of its interest in the properties if it is not able to meet its funding obligations under the terms of the joint
venture.
Currency Risk
The Company maintains its accounts in U.S. dollars and the market for gold is principally denominated in
U.S. dollars. The Company's operations in Colombia make it subject to foreign currency fluctuations and
such fluctuations may materially affect the Company's financial position and results. Colombia has a free
and unrestricted supply and demand market. The Company is exposed to foreign exchange risk from the
exchange rate of Colombian pesos relative to the Canadian and U.S. dollars. Foreign exchange risk is
mainly derived from assets and liabilities stated in Colombian pesos. The Company limits its foreign
exchange risk by the acquisition of short-term financial instruments and, when possible, minimizes its
Colombian peso monetary asset positions.
Dilution
The offering price of the Shares issuable under this Offering significantly exceeds the net tangible book
value per Common Share, and accordingly, investors will suffer immediate and substantial dilution of
their investment in the amount of or $ per Share.

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Price Volatility of Publicly Traded Securities
In recent years, the securities markets in the United States and Canada have experienced a high level of
price and volume volatility, and the market prices of securities of many companies have experienced wide
fluctuations in price which have not necessarily been related to the operating performance, underlying
asset values or prospects of such companies. There can be no assurance that continual fluctuations in
price will not occur. It may be anticipated that any quoted market for the Common Shares will be subject
to market trends generally, notwithstanding any potential business of the Company. The value of the
Shares distributed hereunder will be affected by such volatility. There is no public market for the
Company's Common Shares. An active public market for the Common Shares might not develop or be
sustained after the Offering. The initial public offering price of the Common Shares has been determined
by negotiations between the Company and representatives of the Agents and this price will not
necessarily reflect the prevailing market price of the Common Shares following the Offering. If an active
public market for the Common Shares does not develop, the liquidity of a shareholder's investment may
be limited and the share price may decline below the initial public offering price.
Conflicts of Interest
Some of the directors and officers are engaged and will continue to be engaged in the search for
additional business opportunities on behalf of other corporations, and situations may arise where these
directors and officers will be in direct competition with the Company. Conflicts, if any, will be dealt with
in accordance with the relevant provisions of the Business Corporations Act (British Columbia).
Stress in the Global Economy
Reduction in credit, combined with reduced economic activity and the fluctuations in the United States
dollar, may adversely affect businesses and industries that purchase commodities, affecting commodity
prices in more significant and unpredictable ways than the normal risks associated with commodity
prices. The availability of services such as drilling contractors and geological service companies and/or
the terms on which these services are provided may be adversely affected by the economic impact on the
service providers. The adverse effects on the capital markets generally make the raising of capital by
equity or debt financing much more difficult and the Company is dependent upon the capital markets to
raise financing. Any of these events, or any other events caused by turmoil in world financial markets,
may have a material adverse effect on the Companys business, operating results, and financial condition.
Current Global Financial Condition
Current global financial conditions have been subject to increased volatility. Access to financing has
been negatively impacted by both sub-prime mortgages in the United States and elsewhere and the
liquidity crisis affecting the asset-backed commercial paper market. As such, the Company is exposed to
various counterparty risks including, but not limited to: (i) through financial institutions that hold the
Companys cash; (ii) through companies that have payables to the Company; and (iii) through the
Companys insurance providers. The Company is also exposed to liquidity risks in meeting its operating
expenditure requirements in instances where cash positions are unable to be maintained or appropriate
financing is unavailable. These factors may impact the ability of the Company to obtain loans and other
credit facilities in the future and, if obtained, on terms favourable to the Company. If these increased
levels of volatility and market turmoil continue, the Companys operations could be adversely impacted
and the trading price of the Common Shares could be adversely affected.

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PROMOTERS
Mr. Ian Slater, the Chairman, CEO and a director of the Company, is the promoter of the Company. Mr.
Slater owns 2,013,334 Common Shares, warrants to acquire 1,000,000 Common Shares and options to
acquire 700,000 common shares see "Directors and Officers" and "Options to Purchase Securities".
INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL TRANSACTIONS
Other than fees paid to directors and officers of the Company (or entities controlled by them) as disclosed
below, no person who is:
(a)

A director or executive officer of the Company;

(b)

A person or company that beneficially owns, or controls or directs, directly or indirectly,

more than 10 percent of any class or series of the Company's outstanding voting
securities;

(c)

An associate or affiliate of any of the persons or companies referred to in paragraphs (a)

or (b)

has any material interest, direct or indirect, in any material transaction since incorporation or in any
proposed transaction that has materially affected or will materially affect the Company. Fees paid to
these parties are as follows:
Pursuant to a Management Services Agreement dated January 1, 2010 with SB Management Ltd.
("SBM"), a company controlled by three directors of the Company, the Company has agreed to reimburse
SBM for management and administrative services including rent, telephone, etc. provided to the
Company. During the period from incorporation to December 31, 2010, the Company paid $144,000 to
SBM. The current monthly cost is $25,000. In addition, the Company paid consulting fees of $31,200 to
a partnership in which the CFO of the Company is a partner, and paid legal fees of $20,000 to a
partnership in which one of the directors is a partner.
RELATIONSHIP BETWEEN THE COMPANY AND AGENTS
The Company is not a "related issuer" or "connected issuer" to the Agents as such terms are utilized in
National Instrument 33-105 Underwriting Conflicts of the Canadian Securities Administrators.
AUDITORS, TRANSFER AGENT AND REGISTRAR
The auditors of the Company are Ernst & Young LLP, Chartered Accountants, 700 West Georgia Street,
Vancouver, British Columbia, Canada V7Y 1C7.
The registrar and transfer agent of the Company is Computershare Investor Services, Inc. 3rd Floor, 510
Burrard Street, Vancouver, British Columbia, Canada V6C 3B9.
MATERIAL CONTRACTS
Except for contracts made in the ordinary course of business, the following are the only material contracts
entered into by the Company since its incorporation, which are currently in effect and considered to be
currently material:

008226000-00082763; 17

70
1.

Santa Rosa Agreement referred to under "General Development of the Business".

2.

Pavo Real Option Agreement referred to under "General Development of the Business".

3.

Pavo Real Shareholder Agreement referred to under "General Development of the Business".

4.

Mina Vieja Option Agreement referred to under "General Development of the Business".

5.

Agency Agreement between the Company and the Agents dated , 2011 referred to under "Plan
of Distribution".

6.

Escrow Agreement referred to under "Escrowed Shares".

7.

Management Services Agreement between the Company and SB Management Ltd. dated January
4, 2010.

A copy of any material contract and the Technical Reports with respect to the Santa Rosa, Pavo Real and
Mina Vieja Projects may be inspected during distribution of the Shares being offered under this
Prospectus and for a period of 30 days thereafter during normal business hours at the Company's offices
at Suite 920 1030 West Georgia Street, Vancouver, British Columbia, Canada, V6B 2Y3.
EXPERTS
Certain legal matters related to the Offering have been passed upon on behalf of the Company by Anfield
Sujir Kennedy & Durno LLP and on behalf of the Agents by Blake Cassels & Graydon LLP.
Ernst & Young, Chartered Accountants, have audited the Company's financial statements and report that
they are independent of the Company in accordance with the rules of professional conduct of the Institute
of Chartered Accountants of British Columbia as at the date of their audit report.
No person or company whose profession or business gives authority to a report, valuation, statement or
opinion and whom is named as having prepared or certified a report or valuation described or included in
this Prospectus holds or is to hold any beneficial or registered interest, direct or indirect, in any securities
or property of the Company or any associate of the Company.
RELATIONSHIP BETWEEN THE COMPANY'S PROFESSIONAL PERSONS AND EXPERTS
There is no beneficial interest, direct or indirect, in any securities in excess of one percent of the
Company's issued capital or property of the Company or of an associate or affiliate of the Company, held
by a professional person as referred to in section 106(1) of the Rules under the Securities Act (British
Columbia), a responsible solicitor or any partner of a responsible solicitor's firm or by any person or
company whose profession or business gives authority to a statement made by the person or company and
who is named as having prepared or certified a part of this Prospectus or prepared or certified a report or
valuation described or included in this Prospectus. Mr. Jay Sujir, a director of the Company, is a lawyer
at the firm of Anfield Sujir Kennedy & Durno LLP, counsel to the Company.
PURCHASERS' STATUTORY RIGHTS OF WITHDRAWAL AND RESCISSION
Securities legislation in the Provinces of British Columbia , Alberta and Ontario provides purchasers with
the right to withdraw from an agreement to purchase securities. This right may be exercised within two
business days after receipt or deemed receipt of a prospectus and any amendment. The securities
legislation further provides a purchaser with remedies for rescission or damages if the prospectus and any
amendment contains a misrepresentation or is not delivered to the purchaser, provided that the remedies

008226000-00082763; 17

71
for rescission or damages are exercised by the purchaser within the time limit prescribed by the securities
legislation of the purchaser's province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser's province or territory for the particulars of these
rights or consult with a legal adviser.
LIST OF EXEMPTIONS
The Company has made a pre-filing application with the Securities Commissions pursuant to Part 8 of
National Policy 11-202 Process for Prospectus Reviews in Multiple Jurisdictions ("NP 11-202") in the
relevant jurisdictions for relief from the requirements in section 3.1 of National Policy Instrument 52 107
Acceptable Accounting Principles, Auditing Standards and Reporting Currency that financial
statements included in the Prospectus, other than acquisition statements, must be prepared in accordance
with Canadian GAAP as applicable to public enterprises. The Company sought this relief to permit it to
prepare its financial statements for inclusion in this Prospectus in accordance with IFRS as issued by the
International Accounting Standards Board. In accordance with NP 11-202, the receipt for the final long
form prospectus will constitute evidence of receipt of such aforementioned relief for the purpose of the
financial statements contained in the final long form prospectus.

008226000-00082763; 17

72

GLOSSARY
"Additional Shares"

means up to Common Shares issuable pursuant to the Over-Allotment

Option;

"Agency Agreement"

means the Agency Agreement dated , 2011 between the Agents and the
Company relating to the Offering;

"Agents'"

means Raymond James Ltd., BMO Nesbitt Burns Ltd., Canaccord Genuity
Corp. and Salman Partners Inc.;

Agents' Commission"

means the cash fee equal to 6% of the gross proceeds from the sale of Shares
under the Offering payable to the Agents by the Company;

"Agents' Warrants"

means the share purchase warrants to be granted to the Agents as partial

consideration in connection with the Offering each entitling the holder to
acquire one Common Share at the Offering Price until the date which is 18
months following the Closing Date, all pursuant to the Agency Agreement;

"Agents' Warrant Shares"

means the Common Shares to be issued to the Agents upon exercise of the
Agents' Warrants;

"CDS"

means CDS Clearing and Depository Services Inc.;

"CEO"

means Chief Executive Officer;

"CFO"

means Chief Financial Officer;

"Closing"

means the closing of the Offering;

"Closing Date"

means such date or dates that the Company and the Agents mutually
determine to close the sale of the Offered Shares offered pursuant to this
Prospectus;

"Colombia"

means the Republic of Colombia;

"Common Share"

means a common share in the capital of the Company, as constituted on the

date hereof;

"Company" or "Red Eagle"

means Red Eagle Mining Corporation;

"Escrow Agreement"

means the escrow agreement dated between the Company, Computershare

Investor Services Inc. and various Principals of the Company ;

"Exchange" or "TSXV"

means the TSX Venture Exchange;

"Expogold"

means Expogold Colombia S.A., the original owner of the Pavo Real
Project;

008226000-00082763; 17

73
"ha"

means hectares;

"IFRS"

means International Financial Reporting Standards;

"Indicated Mineral Resource"

means that part of a mineral resource for which quantity, grade or quality,
densities, shape and physical characteristics, can be estimated with a level of
confidence sufficient to allow the appropriate application of technical and
economic viability of the deposit. The estimate is based on detailed and
reliable exploration and testing information gathered through appropriate
techniques from locations such as outcrops, trenches, pits, workings and drill
holes that are spaced closely enough for geological and grade continuity to
be reasonably assumed;

"km"

means kilometers;

"Listing Date"

means the date on which the Common Shares of the Company are first listed
for trading on the Exchange following the Offering;

"MAD I"

means Miranda Gold Colombia I Ltd., a wholly owned subsidiary of

Miranda;

"MAD II"

means Miranda Gold Colombia II Ltd., a wholly owned subsidiary of

Miranda;

"MAD III"

means Rovira Mining Limited, formerly known as Miranda Gold Colombia

III Ltd.;

"Mina Vieja Option Agreement"

means the agreement dated November 27, 2011 among the Company and the
Mina Vieja Vendors pursuant to which the Company was granted the option
to acquire 100% interest in the Mina Vieja Project;

"Mina Vieja Project"

means exploration license 3126 on concession contract 1061, comprising of

a total area of 951.89 ha in the Department of Tolima, Colombia;

"Mina Vieja Vendors"

means Carmen Laserna and Fernando Uribe;

"Miranda"

means Miranda Gold Corp.;

"NI 43-101"

means National Instrument 43-101 Standards of Disclosure for Mineral

Projects of the Canadian Securities Administration;

"Offered Shares"

means the up to Common Shares offered for sale under this Prospectus;

"Offering"

means the Offering of Shares of the Company as described in this

Prospectus;

"Offering Period"

means the 90 day period following the date of issuance of the receipt for the
final prospectus;

"Offering Price"

means $ per Share;

"Option Agreements"

means the Santa Rosa Agreement, the Pavo Real Option Agreement and the

008226000-00082763; 17

74
Mina Vieja Option Agreement;
"Over-Allotment Option"

means the option granted by the Company to the Agents to purchase or

arrange for the purchase of Common Shares equal to 15% of the number of
Offered Shares sold pursuant to the Offering at the Offering price within 30
days of the Closing Date for market stabilization purposes and to cover overallotments, if any;

"Pavo Real Agreement"

means the share purchase agreement dated June 25, 2010 among the
Company, Miranda and MAD I in respect of the Pavo Real Project;

"Pavo Real Option Agreement"

means the option agreement dated June 24, 2010 among Expogold, Miranda,
Miranda Gold Colombia II Ltd. (Sucursal Colombia) and Miranda Gold
Colombia III Ltd. (Sucursal Colombia relating to the Pavo Real Project;

"Pavo Real Project"

means concession contracts IHT-10541 and IHT-10542X and three

concession agreements KG3-14191, JLI-10231 and JLI-10601, covering a
total of 2,594.12 ha in the Department of Tolima, Colombia;

"Pavo Real Shareholder

Agreement"

means the shareholder agreement dated June 25, 2010 among the Company,
MAD I and MAD III;

"Prospectus"

means this prospectus and any appendices, schedules or attachments hereto;

"Santa Rosa Agreement"

means the agreement dated April 15, 2011 among the Company and the
Santa Rosa Vendors pursuant to which the Company was granted an option
to acquire up to a 100% interest in the Santa Rosa Project;

"Santa Rosa Project"

means concession contract numbers B7560005, B7171005, H5791005,

H5790005 and the application for concession agreement LDM 08061, which
are the subject of the Santa Rosa Agreement;

"Santa Rosa Vendors"

means Miguel Angel Perez Villa, Luis Carlos Perez Villa, and Carlos
Augusto Escobarr;

"Securities Commissions"

means the British Columbia Securities Commission, the Alberta Securities

Commission and the Ontario Securities Commission;

"Selling Provinces"

means British Columbia, Alberta, Ontario and any other provinces in which
this Prospectus has been filed and in which the Shares will be offered for
sale.

"Stock Option Plan"

means the Company's stock option plan adopted on by the Company's

board of directors and providing for the granting of incentive options to the
Company's directors, officers, employees and consultants in accordance with
the rules and policies of the Exchange; and

"Subscriber"

means a person or other entity that subscribes for Shares under the Offering.

008226000-00082763; 17

FINANCIAL STATEMENTS
Attached to and forming part of this Prospectus are the audited financial statements of the Company for
the period from incorporation on January 4, 2010 to December 31, 2010 together with the Auditor's
Report thereon.

008226000-00082763; 17

AUDITORS CONSENT
We have read the prospectus of Red Eagle Mining Corporation (the Company) dated relating
to the issue and sale of common shares of the Company. We have complied with Canadian
generally accepted standards for an auditor's involvement with offering documents.
We consent to the use in the above-mentioned prospectus of our report to the directors of the
Company on the consolidated statement of financial position of the Company as at December 31,
2010 and the consolidated statements of comprehensive loss, changes in equity and cash flows
for the period from inception (January 4, 2010) to December 31, 2010. Our report is dated .

Vancouver, Canada
, 2011

008226000-00082763; 17

Chartered Accountants

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)
ConsolidatedFinancialStatements
PeriodfromInceptionJanuary4,2010toDecember31,2010


INDEPENDENTAUDITORSREPORT

TotheDirectorsof
RedEagleMiningCorporation
(anexplorationstageenterprise)
WehaveauditedtheaccompanyingconsolidatedfinancialstatementsofRedEagleMiningCorporation,whichcomprisethe
consolidatedstatementoffinancialpositionasatDecember31,2010,andtheconsolidatedstatementsofcomprehensiveloss,
changesinequityandcashflowsforthe periodfrominception(January4,2010)toDecember31,2010,andasummaryof
significantaccountingpoliciesandotherexplanatoryinformation.
Management'sresponsibilityfortheconsolidatedfinancialstatements
Managementisresponsibleforthepreparationandfairpresentationoftheseconsolidatedfinancialstatementsinaccordance
with International Financial Reporting Standards, and for such internal control as management determines is necessary to
enablethepreparationofconsolidatedfinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudor
error.
Auditorsresponsibility
Ourresponsibilityistoexpressanopinionontheseconsolidatedfinancialstatementsbasedonouraudit.Weconductedour
auditinaccordancewithCanadiangenerallyacceptedauditingstandards.Thosestandardsrequirethatwecomplywithethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial
statementsarefreefrommaterialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated
financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk
assessments, the auditors consider internal control relevant to the entity's preparation and fair presentation of the
consolidatedfinancialstatementsinordertodesignauditproceduresthatareappropriateinthecircumstances,butnotfor
thepurposeofexpressinganopinionontheeffectivenessoftheentity'sinternalcontrol.Anauditalsoincludesevaluatingthe
appropriatenessofaccountingpoliciesusedandthereasonablenessofaccountingestimatesmadebymanagement,aswellas
evaluatingtheoverallpresentationoftheconsolidatedfinancialstatements.
Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforourauditopinion.
Opinion
Inouropinion,theconsolidatedfinancialstatementspresentfairly,inallmaterialrespects,thefinancialpositionofRedEagle
MiningCorporationasatDecember31,2010,anditsfinancialperformanceanditscashflowsfortheperiodfrominception
(January4,2010)toDecember31,2010inaccordancewithInternationalFinancialReportingStandards.

Vancouver,Canada
,2011

Charteredaccountants

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

ConsolidatedStatementofComprehensiveLoss
(ExpressedinCanadianDollars)

ForThePeriodFromInception
January4,2010to
December31,2010
EXPENSES
Depreciation
Officeandgeneraladministration(note11)
Professionalfees
Projectevaluation
Resourcepropertyexpenditures(note8)
Salariesandbenefits(note11)
Travel
OTHEREXPENSES(INCOME)
Foreignexchangegain
Interestandmiscellaneousincome
NETLOSSFORPERIODFROMINCEPTION(JANUARY4,2010)
TODECEMBER31,2010

$10,746
192,948
147,211
128,731
941,725
153,208
48,138
1,622,707
(4,943)
(57)
$1,617,707

OTHERCOMPREHENSIVELOSS
Foreigncurrencytranslationdifferencesfor
foreignoperations
TOTALCOMPREHENSIVELOSSFORTHEYEAR
FORPERIODFROMINCEPTION(JANUARY4,2010)TO
DECEMBER31,2010
Attributableto:
Equityholdersoftheparent
Noncontrollinginterests

Basicanddilutedlosspersharebasic,forprofitforthe
yearattributabletoordinaryequityholdersofthe
parent(warrantsnotincludedastheimpactwouldbe
antidilutive)
Weightedaveragenumberofcommon
sharesoutstanding

15,799

1,633,506

$1,410,038
223,468
$1,633,506

$0.13

10,917,759

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

Page3of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

ConsolidatedStatementofFinancialPosition
(ExpressedinCanadianDollars)

Asat
ASSETS
Noncurrentassets
Equipment(note7)
Resourceproperties(note8)

December31,2010

$107,508
483,717
591,225

Currentassets
Cashandcashequivalents
Otherfinancialassets(note9)
Amountsreceivable
Prepaidexpenses

1,537,583
4,400,000
36,612
16,796
5,990,991

TOTALASSETS

$6,582,216

SHAREHOLDERS'EQUITY
Sharecapital(note10)
Warrants(note10)
Foreignexchangereserve
Deficit
Noncontrollinginterests
TOTALEQUITY

$7,967,847
122,153
(12,695)
(1,397,343)
6,679,962
(223,468)
6,456,494

LIABILITIES
CurrentLiabilities
Accountspayableandaccruedliabilities(note11)

125,722

TOTALLIABILITIES

125,722

TOTALEQUITYANDLIABILITIES

$6,582,216

Natureandcontinuanceofoperations(note1)
Segmentedinformation(note13)
Subsequentevents(note15)
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.
TheseconsolidatedfinancialstatementsareauthorizedforissuebytheBoardof
DirectorsonApril,2011
TheyaresignedontheCompany'sbehalfby:
/s/JeffreyMason Director /s/IanSlater Director

Page4of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

ConsolidatedStatementofChangesinEquity
(ExpressedinCanadianDollars)

Note
ShareissueduponinceptiononJanuary4,2010

Numberof
sharesissued

Sharecapital

Warrants

Foreign
exchange
reserve

Attributableto
equityholders Noncontrolling
Deficit oftheparent
interests

Total

Privateplacements

10

22,191,333

7,877,847

122,153

8,000,000

8,000,000

Sharesissuedforfinder'sfees

10

320,759

240,569

240,569

240,569

200,000

100,000

100,000

100,000

10

(250,569)

(250,569)

(250,569)

(12,695)

(1,397,343)

(1,410,038)

(223,468)

(1,633,506)

Sharesissuedforresourceproperties
Shareissuecosts
Totalcomprehensivelossfortheperiodfrom
inception(January4,2010)toDecember31,
2010
BalanceasatDecember31,2010

22,712,093 $7,967,847 $122,153 $(12,695) $(1,397,343) $6,679,962 $(223,468) $6,456,494

Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

Page5of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

ConsolidatedStatementofCashFlows
(ExpressedinCanadianDollars)

ForThePeriodFrom
InceptionJanuary4,
2010to
December31,2010
Cashflowsprovidedfrom(usedby):
OPERATINGACTIVITIES
Netlossfortheperiod
Adjustmentsforitemnotaffectingcash:
Depreciation

$(1,617,707)
22,397
(1,595,310)

Netchangesinnoncashworkingcapitalitems:
Amountsreceivable
Prepaidexpenses
Accountspayableandaccruedliabilities

(36,612)
(16,796)
125,722
(1,522,996)

FINANCINGACTIVITIES
Issuanceofcommonsharesandwarrantsforcash,
netofshareissuecosts

7,990,000
7,990,000

INVESTINGACTIVITIES
Expendituresonresourceproperties
Purchaseofshortterminvestments
Purchaseofequipment

(383,717)
(4,400,000)
(137,532)
(4,921,249)

Effectsofexchangeratechangesoncashandcashequivalents

(8,172)

Netincreaseincashandcashequivalents
Cash,beginningofperiod
Cashandcashequivalents,endofperiod

1,537,583

$1,537,583

Cashpaidduringtheperiodforinterest

Cashpaidduringtheperiodforincometaxes

Supplementalcashflowinformation(Note12)
Theaccompanyingnotesareanintegralpartoftheseconsolidatedfinancialstatements.

Page6of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
1.CORPORATEINFORMATIONANDCONTINUANCEOFOPERATIONS

TheconsolidatedfinancialstatementsofRedEagleMiningCorporationallitssubsidiaries(theGroup)fortheyearended
31December2010wereauthorisedforissueinaccordancewitharesolutionoftheboardofdirectorsonApril,2011.
RedEagleMiningCorporationwasincorporatedundertheBusinessCorporationsActinBritishColumbiaonJanuary4,2010
andisengagedintheacquisitionandexplorationofresourcepropertieslocatedinColombia.
The address and domicile of the Groups registered office and its principal place of business is Suite 920 1030 West
GeorgiaStreet,Vancouver,BritishColumbia,Canada,V6E2Y3.
TheGroupisengagedintheidentification,acquisition,explorationanddevelopmentofmineralresourcesinColombian.
TheGroupisconsideredtobeintheexplorationstageasithasnotplacedanyofitsmineralpropertiesintoproduction.
Theseconsolidatedfinancialstatementshavebeenpreparedonagoingconcernbasis,whichassumestherealizationof
assetsandliquidationofliabilitiesinthenormalcourseofbusiness.Theseconsolidatedfinancialstatementsdonotinclude
anyadjustmentstotherecoverabilityandclassificationofrecordedassetamountsandclassificationofliabilitiesthatmight
benecessary,shouldtheGroupbeunabletocontinueasagoingconcern.
The Group has entered into mineral property acquisition agreements that will require future outlays of cash in order to
maintainthepropertiesingoodstandingorinordertofulfillcontractualobligations.TheGroupscontinuingoperationsas
intendedaredependentuponmanagementsabilitytoraiserequiredfundingthroughdebt,assetsalesoracombination
thereof.

2.BASISOFPRESENTATION

The consolidated financial statements of the Group have been prepared in accordance with International Financial
ReportingStandards(IFRS)asissuedbytheInternationalAccountingStandardsBoard(IASB).
Theconsolidatedfinancialstatementshavebeenpreparedonahistoricalcostbasis.Theconsolidatedfinancialstatements
arepresentedinCanadiandollars.
Basisofconsolidation
TheconsolidatedfinancialstatementscomprisethefinancialstatementsoftheGroupasat31December2010.
Subsidiariesarefullyconsolidatedfromthedateofacquisition,beingthedateonwhichtheGroupobtainscontrol,and
continuetobeconsolidateduntilthedatewhensuchcontrolceases.
Thefinancialstatementsofthesubsidiariesarepreparedforthesamereportingperiodastheparentcompany,using
consistentaccountingpolicies.
Allintragroupbalances,transactions,unrealisedgainsandlossesresultingfromintragrouptransactionsanddividendsare
eliminatedinfull.
Wheretheownershipofasubsidiaryislessthan100%,andthereforeanoncontrollinginterest/sexists,anylossesofthat
subsidiaryareattributedtothenoncontrollinginterest/sevenifthatresultsinadeficitbalance.

Page7of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
3.PRINCIPALACCOUNTINGPOLICIES

Theprincipalaccountingpoliciesadoptedinthepreparationofthefinancialstatementsaresetoutbelow.
a) Foreigncurrencytranslation
Functionalandpresentationcurrency
Items included in the financial statements of each of the Group's entities are measured using the currency of the
primary economic environment in which the entity operates ('the functional currency'). The consolidated financial
statementsarepresentedinCanadiandollars,whichistheGroup'sfunctionalandpresentationcurrency.
Transactionsandbalances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and
fromthetranslationatyearendexchangeratesofmonetaryassetsandliabilitiesdenominatedinforeigncurrencies
arerecognisedincomprehensiveloss.
IncomestatementsandcashflowsofforeignentitiesaretranslatedintotheGroup'spresentationcurrencyataverage
exchange rates for the year while their balance sheets are translated at the year end exchange rates. Exchange
differences arising from thetranslation are taken tothecurrencytranslation reserve within equity.Ondisposal of a
foreignentity,suchexchangedifferencesaretransferredoutofthisreserveandarerecognisedincomprehensiveloss
aspartofthegainorlossonsale.

b) Equipment
Items of equipment are initially recognized at cost. As well as the purchase price, cost includes directly attributable
costs and the estimated present value of any future costs of dismantling and removing items. The corresponding
liability is recognized within provisions. All items of equipment are subsequently carried at depreciated cost less
impairmentlosses,ifany.
Depreciationisprovidedonallitemsofequipmenttowriteoffthecarryingvalueofitemsovertheirexpecteduseful
economiclives.Itisappliedusingthedecliningbalancemethodatthefollowingrates:

Computers30%perannum

Software100%perannum

FieldEquipment30%perannum

OfficeFurniture20%perannum

Materialresidualvalueestimatesandestimatesofusefullifeareupdatedasrequired,butatleastannually.

Page8of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
3.PRINCIPALACCOUNTINGPOLICIES(continued)

c)

Resourceproperties
Alldirectcostsincludingtheoptionpaymentsrelatedtotheacquisitionofresourcepropertyinterestsarecapitalized
into intangible assets on a property by property basis. Exploration costs, net of incidental revenues, are charged to
operations in the period incurred until such time as it has been determined that a property has economically
recoverable resources, in whichcase subsequent exploration costsandthecosts incurred todevelop aproperty are
capitalizedintoResourcesproperties.Onthecommencementofcommercialproduction,depletionofeachmining
propertywillbeprovidedonaunitofproductionbasisusingestimatedresourcesasthedepletionbase.

d) Impairmentofnonfinancialassets
The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any
indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets
recoverable amount. An assets recoverable amount is the higher of an assets or cashgenerating units (CGU) fair
valuelesscoststosellanditsvalueinuseandisdeterminedforanindividualasset,unlesstheassetdoesnotgenerate
cash inflows that are largely independent of those from other assets or groups of assets, in which case the asset is
tested as part of a larger CGU. Where thecarrying amount of an asset or CGU exceeds its recoverable amount, the
assetisconsideredimpairedandiswrittendowntoitsrecoverableamount.Inassessingvalueinuse,theestimated
future cash flows are discounted to their present value using a pretax discount rate that reflects current market
assessmentsofthetimevalueofmoneyandtherisksspecifictotheasset.Indeterminingfairvaluelesscoststosell,
recentmarkettransactionsaretakenintoaccount,ifavailable.Ifnosuchtransactionscanbeidentified,anappropriate
valuationmodelisused.Thesecalculationsarecorroboratedbyvaluationmultiples,quotedsharepricesforpublicly
tradedsubsidiariesorotheravailablefairvalueindicators.
The Group bases its impairment calculation on detailed budgets and forecast calculations which are prepared
separately foreach ofthe Groupscashgenerating unitsto whichthe individual assets are allocated. These budgets
andforecastcalculationsaregenerallycoveringaperiodoffiveyears.Forlongerperiods,alongtermgrowthrateis
calculatedandappliedtoprojectfuturecashflowsafterthefifthyear.
Impairmentlossesofcontinuingoperations,includingimpairmentofinventories,arerecognisedincomprehensiveloss
inthoseexpensecategoriesconsistentwiththefunctionoftheimpairedasset.

e) Cashandcashequivalents
Cashandcashequivalentscomprisecashonhand,depositsheldoncallwithbanks,highlyliquidinvestmentsthatare
readilyconvertibleintoknownamountofcashandwhicharesubjecttoinsignificantriskofchangesinvalue,netof
bankoverdraftswhicharerepayableondemand.Cashandcashequivalentsnormallyhaveatermtomaturityofthree
monthsorlessfromthedateofacquisition.

Page9of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
3.PRINCIPALACCOUNTINGPOLICIES(continued)

f)

Financialinstruments
Financialassets
All financial assets are initially recorded at fair value and designated upon inception into one of the following four
categories:heldtomaturity,availableforsale,loansandreceivablesorfairvaluethroughprofitorloss(FVTPL).
Financial assets classified as FVTPL are measured at fair value with unrealized gains and losses recognized through
profitandloss.
Financial assets classified as loans and receivables and held to maturity are measured at amortized cost using the
effectiveinterestmethodlessanyallowanceforimpairment.Theeffectiveinterestmethodisamethodofcalculating
theamortizedcostofafinancialassetandofallocatinginterestincomeovertherelevantperiod.Theeffectiveinterest
rateistheratethatexactlydiscountsestimatedfuturecashreceipts(includingallfeesandpointspaidorreceivedthat
form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the
expectedlifeofthefinancialasset,or,whereappropriate,ashorterperiod.
Financialassetsclassifiedasavailableforsalearemeasuredatfairvaluewithunrealizedgainsandlossesrecognizedin
othercomprehensiveincome(loss)exceptforlossesinvaluethatareconsideredotherthantemporaryorasignificant
orprolongeddeclineinthefairvalueofthatinvestmentbelowitscost.
TransactionscostsassociatedwithFVTPLfinancialassetsareexpensedasincurred,whiletransactioncostsassociated
withallotherfinancialassetsareincludedintheinitialcarryingamountoftheasset.

Page10of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
3.PRINCIPALACCOUNTINGPOLICIES(continued)

f)

Financialinstruments(continued)
Financialliabilities
All financial liabilities are initially recorded at fair value and designated upon inception as FVTPL or other financial
liabilities.
Financial liabilities classified as other financial liabilities are initially recognized at fair value less directly attributable
transactioncosts.Afterinitialrecognition,otherfinancialliabilitiesaresubsequentlymeasuredatamortizedcostusing
theeffectiveinterestmethod.Theeffectiveinterestmethodisamethodofcalculatingtheamortizedcostofafinancial
liabilityandofallocatinginterestexpenseovertherelevantperiod.Theeffectiveinterestrateistheratethatexactly
discountsestimatedfuturecashpaymentsthroughtheexpectedlifeofthefinancialliability,or,whereappropriate,a
shorterperiod.
Financial liabilities classified as FVTPL include financial liabilities held for trading and financial liabilities designated
uponinitialrecognitionasFVTPL.Derivatives,includingseparatedembeddedderivatives,arealsoclassifiedasheldfor
tradingunlesstheyaredesignatedaseffectivehedginginstruments.Transactioncostsonfinancialliabilitiesclassified
asFVTPLareexpensedasincurred.FairvaluechangesonfinancialliabilitiesclassifiedasFVTPLarerecognizedthrough
thestatementofcomprehensiveincome.
Attheendofeachreportingperiodsubsequenttoinitialrecognition,financialliabilitiesatFVTPLaremeasuredatfair
value,withchangesinfairvaluerecognizeddirectlyincomprehensivelossintheperiodinwhichtheyarise.Thenet
gainorlossrecognizedincomprehensivelossexcludesanyinterestpaidonthefinancialliabilities.
Impairmentoffinancialassets
TheGroupassessesattheendofeachreportingperiodwhetherafinancialassetisimpaired.
Assetscarriedatamortizedcost
Ifthereisobjectiveevidencethatanimpairmentlossonassetscarriedatamortizedcosthasbeenincurred,the
amountofthelossismeasuredasthedifferencebetweentheassetscarryingamountandthepresentvalueof
estimatedfuturecashflowsdiscountedatthefinancialassetsoriginaleffectiveinterestrate.Thecarryingamount
of the asset is then reduced by the amount of the impairment. The amount of the loss is recognized in
comprehensiveloss.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related
objectivelytoaneventoccurringaftertheimpairmentwasrecognized,thepreviouslyrecognizedimpairmentloss
isreversedtotheextentthatthecarryingvalueoftheassetdoesnotexceedwhattheamortizedcostwouldhave
been had the impairment not been recognized. Any subsequent reversal of an impairment loss is recognized in
comprehensiveloss.
Inrelationtotradeandotherreceivables,aprovisionforimpairmentismadeandanimpairmentlossisrecognized
in profit and loss when there is objective evidence (such as the probability of insolvency or significant financial
difficultiesofthedebtor)thattheGroupwillnotbeabletocollectalloftheamountsdueundertheoriginalterms
oftheinvoice.Thecarryingamountofthereceivableisreducedthroughuseofanallowanceaccount.Impaired
debtsarewrittenoffagainsttheallowanceaccountwhentheyareassessedasuncollectible.

Page11of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
3.PRINCIPALACCOUNTINGPOLICIES(continued)

f)

Financialinstruments(continued)
Availableforsale
Ifanavailableforsaleassetisimpaired,anamountcomprisingthedifferencebetweenitscostanditscurrentfair
value, less any impairment loss previously recognized in comprehensive loss, is transferred from equity to
comprehensiveloss.Reversalsinrespectofequityinstrumentsclassifiedasavailableforsalearenotrecognizedin
comprehensiveloss.
Derecognitionoffinancialassetsandliabilities
A financial asset (or, where applicable a part of a financial asset or part of a group of similar financial assets) is
derecognisedwhen:

Therightstoreceivecashflowsfromtheassethaveexpired

TheGrouphastransferreditsrightstoreceivecashflowsfromtheassetorhasassumedanobligationtopay
thereceivedcashflowsinfullwithoutmaterialdelaytoathirdpartyunderapassthrougharrangement;and
either(a)theGrouphastransferredsubstantiallyalltherisksandrewardsoftheasset,or(b)theGrouphas
neithertransferrednorretainedsubstantiallyalltherisksandrewardsoftheasset,buthastransferredcontrol
oftheasset.

Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisdischargedorcancelledorexpires.
Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthe
termsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasaderecognition
oftheoriginalliabilityandtherecognitionofanewliability,andthedifferenceintherespectivecarryingamountsis
recognisedinthestatementofcomprehensiveloss.

g)

Taxation
Tax expense recognized in comprehensive loss comprises the sum of deferred tax and current tax not recognized
directlyinequity.
Deferredincometaxisprovidedusingtheliabilitymethodontemporarydifferencesatthereportingdatebetweenthe
carryingamountsofassetsandliabilitiesandtheirtaxbases.
Deferredtaxassetsandliabilitiesarecalculated,withoutdiscounting,attaxratesthatareexpectedtoapplytotheir
respectiveperiodofrealizationorsettlement,providedtheyareenactedorsubstantivelyenactedbytheendofthe
reportingperiod.
Deferredtaxassetsarerecognizedtotheextentthatitisprobablethattheywillbeabletobeutilizedagainstfuture
taxableincome.
DeferredtaxassetsandliabilitiesareoffsetonlywhentheGrouphasalegallyenforceablerighttosetoffcurrenttax
assetsandliabilitiesandthedeferredincometaxesrelatedtothesametaxableentityandthesametaxationauthority.
Changesindeferredtaxassetsorliabilitiesarerecognizedasacomponentoftaxincomeorexpenseincomprehensive
loss, except where they relate to items that are recognized in other comprehensive income or directly in equity, in
whichcasetherelateddeferredtaxisalsorecognizedinothercomprehensiveincomeorequity,respectively.

Page12of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
3.PRINCIPALACCOUNTINGPOLICIES(continued)

h) Managementjudgementsandkeysourcesofestimationuncertainty
The preparation of financial statements in conformity with IFRS requires management to make estimates and
assumptionsthataffectthereportedamountsofassets,liabilitiesanddisclosureofcontingentassetsatthedateofthe
financialstatementsandthereportedamountsofrevenuesandexpensesduringthereportingperiod.Actualresults
coulddifferfromthoseestimates.Informationaboutsignificantjudgments,estimatesandassumptionsthathavethe
mostsignificanteffectonrecognitionandmeasurementofassets,liabilities,incomeandexpensesarediscussedbelow.
Impairment
The Group assesses each cash generating unit annually to determine whether any indication of impairment exists.
Whereanindicatorofimpairmentexists,aformalestimateoftherecoverableamountismade,whichisconsideredto
bethehigherofthefairvaluelesscoststosellandvalueinuse.Theseassessmentsrequiretheuseofestimatesand
assumptions such as longterm commodity prices, discount rates, future capital requirements, exploration potential
andoperatingperformance.Fairvalueisdeterminedastheamountthatwouldbeobtainedfromthesaleoftheasset
in an arms length transaction between knowledgeable and willing parties. Fair value for mineral assets is generally
determined as the present value of estimated future cash flows arising from the continued use of the asset, which
includes estimates such as the cost of future expansion plans and eventual disposal, using assumptions that an
independentmarketparticipantmaytakeintoaccount.Cashflowsarediscountedtotheirpresentvalueusingapre
tax discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset.Managementhasassesseditscashgeneratingunitsasbeinganindividualminesite,whichisthelowestlevelfor
whichcashinflowsarelargelyindependentofthoseofotherassets.
Usefullivesofdepreciableassets
Managementreviewstheusefullivesofdepreciableassetsateachreportingdate.
Fairvalueoffinancialinstruments
Management uses valuation techniques in measuring the fair value of financial instruments, where active market
quotesarenotavailable.Detailsoftheassumptionsusedaregiveninthenotesregardingfinancialassetsandliabilities.
Inapplyingthevaluationtechniquesmanagementmakesmaximumuseofmarketinputswhereverpossible,anduses
estimatesandassumptionsthatare,asfaraspossible,consistentwithobservabledatathatmarketparticipantswould
useinpricingtheinstrument.Whereapplicabledataisnotobservable,managementusesitsbestestimateaboutthe
assumptionsthatmarketparticipantswouldmake.Suchestimatesincludeliquidityrisk,creditriskandvolatilitymay
varyfromtheactualpricesthatwouldbeachievedinanarm'slengthtransactionatthereportingdate.

Page13of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
4.NEWACCOUNTINGSTANDARDSANDINTERPRETATIONS

StandardsissuedbutnotyeteffectiveuptothedateofissuanceoftheGroupsfinancialstatementsarelistedbelow.This
listingisofstandardsandinterpretationsissued,whichtheGroupreasonablyexpectstobeapplicableatafuturedate.The
Group intends to adopt those standards when they become effective. The Group does not expect the impact of such
changesonthefinancialstatementstobematerial.
IAS24RelatedPartyDisclosures(Amendment)
Theamendedstandardiseffectiveforannualperiodsbeginningonorafter1January2011.Itclarifiedthedefinitionofa
related party to simplify the identification of such relationships and to eliminate inconsistencies in its application. The
revised standard introduces a partial exemption of disclosure requirements for governmentrelated entities. The Group
does not expect any impact on its financial position or performance. Early adoption is permitted for either the partial
exemptionforgovernmentrelatedentitiesorfortheentirestandard.
IAS32FinancialInstruments:PresentationClassificationofRightsIssues(Amendment)
TheamendmenttoIAS32iseffectiveforannualperiodsbeginningonorafter1February2010andamendedthedefinition
ofafinancialliabilityinordertoclassifyrightsissues(andcertainoptionsorwarrants)asequityinstrumentsincaseswhere
suchrightsaregivenproratatoalloftheexistingownersofthesameclassofanentitysnonderivativeequityinstruments,
ortoacquireafixednumberoftheentitysownequityinstrumentsforafixedamountinanycurrency.Thisamendment
willhavenoimpactontheGroupafterinitialapplication.
IFRS9FinancialInstruments:ClassificationandMeasurement
IFRS9asissuedreflectsthefirstphaseoftheIASBsworkonthereplacementofIAS39andappliestoclassificationand
measurementoffinancialassetsasdefinedinIAS39.Thestandardiseffectiveforannualperiodsbeginningonorafter1
January 2013. In subsequent phases, the IASB will address classification and measurement of financial liabilities, hedge
accountingandderecognition.Thecompletionofthisprojectisexpectedinearly2011.Theadoptionofthefirstphaseof
IFRS9willhaveaneffectontheclassificationandmeasurementoftheGroupsfinancialassets.TheGroupwillquantifythe
effectinconjunctionwiththeotherphases,whenissued,topresentacomprehensivepicture.
IFRIC14Prepaymentsofaminimumfundingrequirement(Amendment)
The amendment to IFRIC 14 is effective for annual periods beginning on or after 1 January 2011 with retrospective
application. The amendment provides guidance on assessing the recoverable amount of a net pension asset. The
amendmentpermitsanentitytotreattheprepaymentofaminimumfundingrequirementasanasset.Theamendmentis
deemedtohavenoimpactonthefinancialstatementsoftheGroup.
IFRIC19ExtinguishingFinancialLiabilitieswithEquityInstruments
IFRIC19iseffectiveforannualperiodsbeginningonorafter1July2010.Theinterpretationclarifiesthatequityinstruments
issued to a creditor to extinguish a financial liability qualify as consideration paid. The equity instruments issued are
measuredattheirfairvalue.Incasethatthiscannotbereliablymeasured,theinstrumentsaremeasuredatthefairvalue
of the liability extinguished. Any gain or loss is recognised immediately in comprehensive loss. The adoption of this
interpretationwillhavenoeffectonthefinancialstatementsoftheGroup.

Page14of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
5.CAPITALMANAGEMENT

TheGroup'sobjectiveswhenmanagingcapitalare:
to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for
shareholdersandbenefitsforotherstakeholders;and
to provide anadequate return to shareholders bypricing products and services commensurately with the level of
risk.
The Group sets the amount of capital in proportion to risk. The Group manages the capital structure and makes
adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In
order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,
returncapitaltoshareholders,issuenewshares,orsellassetstoreducedebt.

6.FINANCIALINSTRUMENTS

The Group has designated its cash and shortterm investments as heldfortrading; receivables as loans and receivables;
andaccountspayableasotherfinancialliabilities.
a) Fairvalue
The fair value of these financial instruments equals their carrying value, due to the shortterm nature of these
instruments.
ThefairvalueoffinancialinstrumentsatDecember31,2010issummarizedasfollows:
December31,2010
Carryingamount
Fairvalue
FinancialAssets
Heldfortrading
Cashandcashequivalents
Otherfinancialassets
Loansandreceivables
Receivables(excludingHarmonizedSales
Taxreceivable)
FinancialLiabilities
Accountspayable

$1,537,583
$4,400,000

$1,537,583
$4,400,000

$1,662

$1,662

$125,722

$125,722

Page15of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
6.FINANCIALINSTRUMENTS(continued)

a) Fairvalue(continued)
The IFRS establishes a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair
value.Thehierarchygivesthehighestprioritytounadjustedquotedpricesinactivemarketsforidenticalassetsor
liabilitiesandthelowestprioritytounobservableinputs.Thethreelevelsofthefairvaluehierarchyareasfollows:
Level1:

Unadjustedquotedpricesinactivemarketsforidenticalassetsorliabilities;

Level2:

Inputs other than quoted prices that are observable for the asset or liability either directly
(i.e.,asprices)orindirectly(i.e.,derivedfromprices);and

Level3:

Inputsthatarenotbasedonobservablemarketdata.

Thefairvalueofallthefinancialinstrumentsismeasuredbyusingtheunadjustedquotedpriceinactivemarketsfor
identicalassetsandliabilities(Level1).
b) Financialriskmanagement
Creditrisk
The Group is exposed to credit risk with respect to its cash and short term investments. Cash and short term
investmentshavebeenplacedondepositwithamajorCanadianfinancialinstitutionandamajorColombianfinancial
institution.
Theriskarisesfromthenonperformanceofcounterpartiesofcontractualfinancialobligations.TheGroupmanages
credit risk, in respect of cash and cash equivalents, by purchasing highly liquid, shortterm investmentgrade
securitiesheldatamajorCanadianfinancialinstitution.
ConcentrationofcreditriskexistswithrespecttotheGroupscashandshortterminvestmentsasthemajorityofthe
amountsareheldatasingleCanadianfinancialinstitution.TheGroupsconcentrationofcreditriskandmaximum
exposuretheretoisasfollows:
December31,2010
HeldatmajorCanadianfinancialinstitution:
Cash
Shorttermmoneymarketinstruments

$1,424,502
4,400,000
5,824,502

HeldatmajorColombianfinancialinstitution:
Cash
Totalcashandshortterminvestments

113,081
$5,937,583

Thecreditriskassociatedwithcashisminimizedbyensuringthemajorityofthesefinancialassetsareheldwitha
majorCanadianfinancialinstitutionwithstronginvestmentgraderatingsbyaprimaryratingagency.
Interestraterisk
TheGrouphascashbalances,investmentgradeshorttermdepositcertificatesissuedbyitsbankinginstitutionand
no interestbearing debt. Interest income is not material to the Group. The Group is not exposed to significant
interestraterisk.

Page16of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
6.FINANCIALINSTRUMENTS(continued)

b) Financialriskmanagement(continued)
Foreigncurrencyrisk
TheGroupisexposedtocurrencyrisktotheextentthatmonetaryassetsandliabilitiesheldbytheGrouparenot
denominatedinCanadiandollars.TheGrouphasnotenteredintoanyforeigncurrencycontractstomitigatethisrisk.
CertainoftheGroupscashandcashequivalents,andaccountspayableandaccruedliabilitiesareheldinColombian
Peso(COP);therefore,COPamountsaresubjecttofluctuationagainsttheCanadiandollar(CAD).
TheGrouphadthefollowingbalancesinforeigncurrencyasatDecember31,2010:
Cash
Accountspayableandaccruedliabilities

inCOP
$220,516,537
$(139,073,423)
$81,443,114

EquivalenttoCAD

$41,764

Ratetoconvertto$1.00Canadian

0.00051

BasedontheabovenetexposureasatDecember31,2010,andassumingthatallothervariablesremainconstant,a
10%appreciationordepreciationoftheCOPagainsttheCADwouldresultinadecreaseorincreaseofapproximately
$2,200intheGroupsnetloss.
TheGroupalsohastransactionalcurrencyexposures.Suchexposuresarisefrompurchasesincurrenciesotherthan
therespectivefunctionalcurrencies.TheGroupmanagesthisriskbymatchingreceiptsandpaymentsinthesame
currencyandmonitoring.
Otherpricerisk
Otherpriceriskistheriskthatthefairvalueorfuturecashflowsofafinancialinstrumentwillfluctuatebecauseof
changesinmarketprices,otherthanthosearisingfrominterestrateriskorcurrencyrisk.TheGroupisnotexposed
tosignificantotherpricerisk.
Liquidityrisk
LiquidityriskistheriskthattheGroupwillnotbeabletomeetitsfinancialobligationsastheyfalldue.TheGroup
anticipatesthatthereissufficientcapitalandliquiditytomeetliabilitieswhendue.
The Group maintained sufficient cash and shortterm investments at December 31, 2010 in the amount of
$1,537,583and$4,400,000,respectively,inordertomeetshorttermbusinessrequirements.AtDecember31,2010,
theGrouphadaccountspayableof$125,722,whichwillberepaidwithinthreemonths.

Page17of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
7.EQUIPMENT

Computer
hardware

Field
equipment

Office
equipment

Software

Vehicles

Total

Cost
DuringtheyearendedDecember31,2010
Additions
BalanceasatDecember31,2010

$2,096 $13,618 $25,070 $8,131 $88,617 $137,532

$2,096 $13,618 $25,070 $8,131 $88,617 $137,532

Deprecation
DuringtheyearendedDecember31,2010
Depreciationchargedfortheperiod
BalanceasatDecember31,2010

$(305) $(2,043) $(2,398) $(4,066) $(13,585) $(22,397)

$(305) $(2,043) $(2,398) $(4,066) $(13,585) $(22,397)

Effectofmovementsinexchangerates

$(56) $ $(2,522) $(52) $(4,997) $(7,627)

NetbookvalueasatDecember31,2010

$1,735 $11,575 $20,150 $4,013 $70,035 $107,508

8.RESOURCEPROPERTIES

Followingisacontinuityoftheacquisitioncostsoftheresourceproperties:
PavoReal

SantaRosa

Total

Acquisitioncosts

$177,331

$306,386

$483,717

BalanceasatDecember31,2010

$177,331

$306,386

$483,717

Following is a summary of the exploration costs of the resource properties which were expensed when incurred for the
periodfrominception(January4,2010)toDecember31,2010:
PavoReal

SantaRosa

Others

Total

Resourcepropertyexpenditures:
Assaysandsampling

$22,789

$ $ $22,789

Depreciation

9,608

681

1,362

11,651
135,426

Fieldandcampexpenses

124,713

4,131

6,582

Geophysics

140,461

92,171

232,632

Salariesandconsultingfees

317,787

99,684

18,445

435,916

75,651
$691,009

27,293
$223,960

367
$26,756

103,311
$941,725

Travel
BalanceasatDecember31,2010

Page18of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
8.RESOURCEPROPERTIES(continued)

PavoRealProject(Colombia)
On June 25, 2010 the Group entered into a share purchase agreement (SPA) and shareholder agreement (SA) with
MirandaGoldCorp.(Miranda).PursuanttotheSPA,Mirandaassigned70%ofthesharesofMirandaGoldColombiaIII
Ltd.(MADIII),awhollyownedsubsidiaryofMiranda,totheGroup.TheactivitiesofMADIIIwillbegovernedbytheSA.
Tomaintainits70%shareholdinginMADIII,effectivelyrepresentinga70%interestinthePavoOptionandthePavoReal
mininginterest,theGroupmustmakeanaggregateUS$4,000,000contribution(FirstContribution)toMADIIIwithinthe
nextfouryearsasfollows:
Explorationexpenditures:
OnorbeforeJune25,2011(paid)
OnorbeforeJune25,2012
OnorbeforeJune25,2013
OnorbeforeJune25,2014

USD500,000
750,000
1,000,000
1,750,000
USD4,000,000

ThesefundswillbeusedtofundexplorationworkatthePavoRealproject.IftheGroupfailstomakeanyofthecapital
contributionswithinthestatedtimeperiods,RedEaglewillforfeititssharesofMADIIItoMiranda.
AftermakingtheFirstcontribution,theGroupshallmakefurthercontributionstothecontributedsurplusofMADIIIas
follows(SecondContribution):
a)

Acontributionofatleast$1,000,000peryearintheeventthatMADIIIelectstoundertakeafeasibilityprogramto
prepare a positive feasibility study in a form acceptable for the purpose of financing mine construction, which
annual minimum contribution shall be made by the Group until the completion of such feasibility study, which
feasibilitystudymustbecompletedwithineightyearsfromJune25,2010;or
b) IfMADIIIdoesnotundertakeafeasibilityprogram,orifMADIIIcommencesafeasibilityprogrambutdoesnot
complete a feasibility study, the Group shall contribute a minimum of $10,000,000 in excess of the First
Contribution at a rate of not less than $1,000,000 per year, all of which shall be expended on exploration
operations, development operations,concession fees and payments made to acquire and maintainapplications,
concessions and land (excluding payments in the Groups shares issued pursuant to the Pavo Real Option
Agreement)andmustbeexpendedwithin10yearsfromJune30,2010.ExpendituresmadebytheGrouponan
uncompletedfeasibilitystudymaybeappliedtotheseadditionalexpenditurerequirements.

After making the Second Contribution, if the board of directors of MAD III has approved a feasibility study and a mine
constructionprogram,theGroupwillhavetheoption,butnottheobligation,toelecttoacquireanadditional10%interest
inMADIIIbycommittingtosolefundallcostsassociatedwithachievingthecommencementofcommercialproduction.
The Group may exercise this option (the Additional 10% Option) by providing notice in writing to MAD III and MAD I
within30daysofthedateofsuchboardofdirectorsofMADIIIapproval.IftheGroupexercisestheAdditional10%Option,
MADIIIwillissueadditionalsharesfromtreasurywithoutpaymenttoincreasetheGroupsownershippercentageto80%.
Inaddition,MADIIIwillpaytheGroupafeeof10%ofthecostsincurredbyMADIIIincarryingoutapprovedexploration
programsandimplementingaproductiondecision.

Page19of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
8.RESOURCEPROPERTIES(continued)

PavoRealProject(Colombia)(continued)
OnJune24,2010,Mirandaexecutedanoptionagreement(thePavoOption)byandamongExpoGold,Miranda,andMAD
III, and the Colombian branch of MAD III to acquire the Pavo Real mining interest. The commitments under the Pavo
OptionwillbetheresponsibilityoftheGrouppursuanttotheSA.UnderthetermsofthePavoOption,theGrouphasto
makethefollowingcashpaymentsandissuetheGroupscommonsharestoMiranda:
Cashpayments:
OnorbeforeJune24,2010(paid)
OnorbeforeDecember24,2010(paid)
OnorbeforeJune24,2011
OnorbeforeJune24,2012
OnorbeforeJune24,2013
OnorbeforeJune24,2014
OnorbeforeJune24,2015

USD20,000
20,000
50,000
60,000
70,000
80,000
100,000
USD400,000

Numberof
commonshares
100,000
100,000
100,000
100,000
100,000
100,000
100,000
700,000

Commonsharestobeissued:
OnorbeforeJune24,2010(issuedonAugust16,2010)
OnorbeforeDecember24,2010(issued)
OnorbeforeJune24,2011
OnorbeforeJune24,2012
OnorbeforeJune24,2013
OnorbeforeJune24,2014
OnorbeforeJune24,2015

Inaddition,commencingonJune25,2016,andpayableoneachsucceedinganniversary,MADIIImustpayUS$100,000and
deliver100,000commonsharesofMirandatoExpogolduntilthedateonwhichthereisadefinedmeasuredandindicated
mineralresourcewithinadefinedareaofinterestonthePavoRealpropertyofgreaterthan250,000totalouncesofgoldor
gold equivalent, which complies with an independent NI 43101 compliant technical report (the "Pavo Real Defined
Resource").OncethereisaPavoRealDefinedResource,MADIIIwillberequiredtomakeoneofthefollowingadditional
paymentstoExpogold:
a)

IfthePavoRealDefinedResourceisgreaterthan250,000ounces,butlessthan500,000ounces,MADIIIshallpay
US$100,000;or
b) IfthePavoRealDefinedResourceisequaltoorgreaterthan500,000ounces,MADIIIshallpayUS$250,000.

Page20of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
8.RESOURCEPROPERTIES(continued)

PavoRealProject(Colombia)(continued)
Inaddition,MADIIIshallpaytoExpogold:
a)
b)
c)
d)
e)

US$250,000uponcompletionofafeasibilitystudy;
US$500,000uponachievingcommercialproduction;
US$500,000uponproducing250,000ouncesofgoldorgoldequivalentounces;
US$750,000uponproducing500,000ouncesofgoldorgoldequivalentounces;and
US$1,000,000uponproducing1millionouncesofgoldorgoldequivalentounces.

EachoftheabovepaymentsmaybeincashorcommonsharesofMiranda.Thereafter,MADIIIshallpayUS$1millionfor
each1millionouncesofgoldorgoldequivalentouncesproduced.

SantaRosaProject(Colombia)
OnOctober6,2010,theGroupenteredintoaLetterAgreementtoacquire100%oftheSantaRosaProject,whichis
comprisedofvariousconcessioncontractsinColombia.TheGroupmadeaninitialpaymentofUS$300,000onOctober
18,2010.TheGroupcanacquire100%ofthepropertybymakingthefollowingpayments:
Cashpayments:
OnorbeforeFebruary28,2011(paidseeNote15)
Upontitletransfer
OnorbeforeNovember30,2013

USD400,000
3,000,000
4,500,000
USD7,900,000

The Group also has to pay to the original owners the greater of US$2,000,000 or US$15 per gold equivalent ounce
multipliedbythequantityofMeasuredandIndicatedgoldequivalentounces(asdefinedinNationalInstrumentPolicy
43101andcalculatedbyanindependentqualifiedperson)onapredefined20hectareareaoftheproject.

Page21of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
8.RESOURCEPROPERTIES(continued)

MinaViejaProject(Colombia)
OnNovember27,2010,theGroupenteredintoanoptionagreementtoacquireupto100%oftheMinaViejaproject.
TheGroupcanthenearntherighttoacquireupto100%oftheprojectbyfirstspendingaminimumofUS$2,000,000
on exploration expenditures and making the following cash payments over the initial 30 month option period (the
InitialOption):

aninitialcashpaymentofUS$5,000uponsuccessfultitleduediligence;
6monthlycashpaymentsofUS$5,000permonthcommencingontheeffectivedateoftheagreement;
aUS$100,000cashpaymentonorbefore6monthsaftertheeffectivedateoftheagreement;
aUS$200,000cashpaymentonorbefore18monthsaftertheeffectivedateoftheagreement;and,
aUS$200,000cashpaymentonorbefore30monthsaftertheeffectivedateoftheagreement.

UponcompletingitsobligationsundertheInitialOption,theGroupwillhavetherighttopurchase80%oftheproject
foraperiodof90days(theSecondOption).Thepurchasepricewillbecalculatedbytaking80%ofthequantityof
MeasuredandIndicatedgoldequivalentounces(asdefinedinNationalInstrumentPolicy43101andcalculatedbyan
independent qualified person) and multiplying it by US$10 per gold equivalent ounce. The purchase price will be
payableincash.
OncetheGroupexercisesitsrightundertheSecondOption,theGrouphastherighttopurchasetheremaining20%of
theproject(theThirdOption).Thepurchasepricewillbecalculatedbytaking20%ofthequantityofMeasuredand
IndicatedgoldequivalentouncescalculatedundertheSecondOptionandmultiplyingitbyUS$15pergoldequivalent
ounce.Thepurchasepricewillbepayableincash.IntheeventthattheGroupdoesnotexercisetheirrighttopurchase
the remaining 20% of the project under the Third Option, future project expenditures will be funded on a prorata
basis:80%bytheGroupand20%bytheVendors.IftheVendorsareunabletomeettheir20%fundingobligationon
futureprojectexpenditures,theremaining20%interestheldintheprojectbytheownerswillbetransferredtothe
Groupinexchangefora1%NetSmelterReturnroyaltyontheproject.AsatDecember31,2010,titleduediligenceis
stillinprogress;therefore,theeffectivedateasdefinedundertheAgreementhasnotyetbeenestablished.

9.OTHERFINANCIALASSETS

Interestrate
December31,2010
GuaranteedInvestmentCertificate
GuaranteedInvestmentCertificate

Maturitydate

0.85%
1.00%

Amount

December28,2011 1,400,000
December28,2011 3,000,000
$4,400,000

Page22of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
10.SHARECAPITAL

a) Authorizedsharecapital
Unlimitednumberofcommonshareswithoutparvalue.

b) IssuedduringtheperiodendedDecember31,2010
Detailsofcommonsharesissuedin2010areasfollows:

OnJanuary8,2010,theGroupissued1,550,000commonsharesforgrossproceedsof$15,500.

OnJanuary25,2010,theGroupissued1,350,000commonsharesforgrossproceedsof$67,500.

OnFebruary12,2010,theGroupissued4,500,000unitsforgrossproceedsof$292,500.Eachunitconsistsof
one common share and one common share purchase warrant. Each whole warrant entitles the holder to
purchaseonecommonshareatanexercisepriceof$0.25pershareuntilFebruary12,2015.
For accounting purposes, the Group calculated the fair value of warrants issued, using the BlackScholes
optionpricingmodelwiththefollowingassumption:riskfreeinterestrateof2.24%,expectedannualvolatility
of125%,expectedlifeof5yearsandexpecteddividendyieldof0%,whichtotalled$122,153,andrecorded
thesevaluesasreserves.Thevalueattributedtothewarrantswasbasedontheirfairvaluewiththeresidual
balanceof$170,347beingallocatedtocommonshares.

OnAugust16,2010,theGroupissued100,000commonshareswithafairvalueof$25,000fortheresource
properties(seeNote8).

The Group issued 6,938,000 common shares for aggregate gross proceeds of $1,734,500, in five different
tranchesdatedApril30th,June14th,July8th,October25thandNovember25th.

On December 16, 2010, the Group issued 7,853,333 common shares for gross proceeds of $5,890,000. In
connection with the financing, the Group also issued 320,759 common shares with a value of $240,569 as
findersfeesandincludedinshareissuecosts.

On December 23, 2010, the Group issued 100,000 common shares with a fair value of $75,000 for the
resourceproperties(seeNote8).

In connection with the above transactions, the Group also incurred $10,000 of legal fees that have been
recordedasshareissuecosts.

Page23of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
10.SHARECAPITAL(continued)

c)

Warrants
AsummaryofthestatusofwarrantsasofDecember31,2010andchangesfortheperiodfrominception(January4,
2010)thenendedareasfollows:
Weighted
Number AverageExercise
Outstanding
Price
BalanceatinceptionJanuary4,2010
Issued(seeNote10(b))
Balance,December31,2010

4,500,000

$0.25

4,500,000

$0.25

ThefollowingsummarizesthesharepurchasewarrantsoutstandingatDecember31,2010:

Warrants
Outstanding
ExercisePrice
4,500,000 $0.25

ExpiryDate
February12,2015

Weighted
Average
Remaining
ContractualLife
(inYears)
4.12

Page24of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
11.RELATEDPARTYTRANSACTIONS

Name
Principalsubsidiaries
RedEagleMiningdeColombiaLimited
MirandaGoldColombiaIIILtd.

Countryof
incorporation

%ofordinary
sharesheld&
votingrights

Principalactivities

Canada
Canada

Explorationcompany
Explorationcompany

100%
70%

The aggregate value of transactions and outstanding balances relating to key management personnel and entities over
whichtheyhavecontrolorsignificantinfluencewereasfollows:
December31,2010
Shorttermemployeebenefits

(1)

$153,208

Allothercompensation

(2)

195,200
$348,408

1)
2)

SalarypaidtoanofficeroftheGroup.
Consultingfees($31,200)paidtoapartnershipinwhichtheCFOoftheGroupisapartner;office,rentand
relatedcosts($144,000)paidtoacompanycontrolledbythedirectorsoftheGroup;legalfees($20,000)
paidtoapartnershipinwhichoneofthedirectorsoftheGroupisapartner.

TheGroupsCEOisadirectorcommontoboththeGroupandMirandaGoldCorp.,whichenteredintoaSPAandSAonthe
PavoRealProjectdescribedinNote8.
ThebalanceinaccountspayableandaccruedliabilitiesasatDecember31,2010was$20,000totheserelatedparties.

12.SUPPLEMENTALCASHFLOWINFORMATION

Supplementalcashflowinformationfortheperiodfrominception(January4,2010)toDecember31,2010isasfollows:

Fortheyearsended
December31,2010
Sharesissuedforresourcesproperties

$100,000

Page25of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
13.SEGMENTEDINFORMATION

TheGrouphasoneoperatingsegment,whichistheexplorationanddevelopmentofresourceproperties.TheGroupsnet
assetsaredistributedintwogeographicregions:CanadaandColombia,asfollows:

AsatDecember31,2010
Cashandcashequivalents
Otherfinancialassets
Receivables
Prepaidexpenses
Propertyandequipment
Resourceproperties
Accountspayable

Lossfortheyear

Canada

Colombia

Total

$1,414,653
4,400,000
35,715
3,713

5,854,081
(44,171)
$5,809,910

$122,930

897
13,083
107,508
483,717
728,135
(81,551)
$646,584

$1,537,583
4,400,000
36,612
16,796
107,508
483,717
6,582,216
(125,722)
$6,456,494

$1,097,221

$520,486

$1,617,707

Page26of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
14.TAXES

TheGroupinCanadaaresubjecttoCanadianfederalandprovincialtaxfortheestimatedassessableprofitfortheperiod
endedDecember31,2010atarateof28.5%.TheGrouphadnoassessableprofitinCanadafortheperiodendedDecember
31,2010.

The Groups branches in Colombia are subject to tax for the period ended December 31, 2010 at a rate of 33%. No
ColombiantaxwasprovidedforastheGrouphadnoassessableprofitarisinginorderivedfromColombiaintheperiod
endedDecember31,2010.

The tax expense for the Group can be reconciled to the loss for the period per the Consolidated Statement of
ComprehensiveLossasfollows:
Periodended
December31,2010
NetLossandComprehensiveLossforthePeriod

$1,633,506

Statutorytaxrate

28.5%

Recoveryofincometaxesbasedoncombined
Canadianfederalandprovincialstatutoryrates

$465,549

Netimpactofchangesinincometaxrates

(48,971)

Taxeffectoftaxlossesandtemporarydifferences
notrecognized
Nondeductibleexpenses
Taxrecoveryfortheperiod

(388,818)
(27,760)
$

TheGroupsunrecognizeddeferredincometaxassetsareasfollows:
Asat
December31,2010
Resourceproperties
Property,plantandequipment
Shareissuecosts
Taxlosscarryforwards
Totalunrecognizeddeferred
incometaxassets

$181,922
8,557
57,180
163,316
$410,975

AtDecember31,2010,theGrouphaveunrecognizednoncapitallossesforCanadianincometaxpurposesofapproximately
$573,000thatmaybeusedtooffsetfuturetaxableincomeandexpireinthe2030taxationyear.

Page27of28

REDEAGLEMININGCORPORATION
(anexplorationstageenterprise)

NotestotheConsolidatedFinancialStatementsfortheperiodendedDecember31,2010
15.SUBSEQUENTEVENTS

OnJanuary6,2011,theGroupissued1,666,666unitsatapriceof$0.75perunitforgrossproceedsof$1,250,000to
a strategic investor. Each unit consists of one common share and onehalf commonshare purchase warrant.Each
wholewarrantentitlestheholdertopurchaseonecommonshareoftheGroupfor$1.25pershareforuptotwo
yearssubsequenttothedateoftheinitialpublicoffering.

OnFebruary14,2011,theGroupmadeaUS$400,000annualpaymentonSantaRosaProjectpursuanttotheterms
oftheLetterAgreementdescribedinNote8.

OnApril15,2011,theGroupsignedafinalpurchaseagreementfortheSantaRasaProjectasdescribedinNote8.

On April 27, 2011, a stock option plan was adopted by the Board of Directors. The Group issued 3,710,000 stock
optionswhichwillhaveanexercisepriceequaltotheofferingpriceoftheGroupsinitialpublicoffering.

Page28of28

CERTIFICATE OF RED EAGLE MINING CORPORATION

Dated: April 28, 2011

This Prospectus constitutes full, true and plain disclosure of all material facts relating to the securities
offered by this Prospectus as required by the securities legislation of British Columbia, Alberta and
Ontario.

"Ian Slater"
Ian Slater, Chairman and Chief Executive
Officer

"Paul Robertson"
Paul Robertson, Chief Financial Officer

ON BEHALF OF THE BOARD OF DIRECTORS

"Jeffrey Mason"
Jeffrey Mason, Director

008226000-00082763; 17

"Jay Sujir"
Jay Sujir, Director

CERTIFICATE OF PROMOTER

Dated: April 28, 2011

This Prospectus constitutes full, true and plain disclosure of all material facts relating to the securities
offered by this Prospectus as required by the securities legislation of British Columbia, Alberta and
Ontario.
PROMOTER:
"Ian Slater"
Ian Slater

008226000-00082763; 17

CERTIFICATE OF THE AGENTS

Dated: April 28, 2011

To the best of our knowledge, information and belief, this Prospectus constitutes full, true and plain
disclosure of all material facts relating to the securities offered by this Prospectus as required by the
securities legislation of British Columbia, Alberta and Ontario.
RAYMOND JAMES LTD.

"John Murphy"
Name: John Murphy
Title: Managing Director

BMO NESBITT BURNS INC.

"Jamie Rogers"
Name: Jamie Rogers
Title: Managing Director

CANACCORD GENUITY CORP.

SALMAN PARTNERS INC.

"Ali Pejman"
Name: Ali Pejman
Title: Managing Director

"Doug McDonald"
Name: Doug McDonald
Title: VP Corporate Finance

008226000-00082763; 17

SCHEDULE "A" to the Preliminary Prospectus of

RED EAGLE MINING CORPORATION dated April 28, 2011

ITEM 1:

THE AUDIT COMMITTEE'S CHARTER

INSERT AUDIT COMMITTEE CHARTER

ITEM 2:

COMPOSITION OF THE AUDIT COMMITTEE

The current members of the Committee are Messrs. Slater, Sujir and Mason. All of the members are
financially literate. "Independent" and "financially literate" have the meaning used in Multilateral
Instrument 52-110 Audit Committees ("NI 52-110" or the "Instrument") of the Canadian Securities
Administrators.
ITEM 3:

RELEVANT EDUCATION AND EXPERIENCE

The relevant education and/or experience of each member of the Audit Committee is as follows:
Mr. Ian Slater
Mr. Slater is the Chairman and Chief Executive Officer of the Company. Previously, Mr. Slater was the
President and CEO of Fortress Minerals Corp., a Lundin Group company, focused on gold exploration
and development in Russia. Mr. Slater is currently a director of Slater Mining Corporation and Miranda
Gold Corp. From 2003 to 2007 Mr. Slater was the Managing Partner of Ernst & Youngs Canadian
mining practice. Previously, Mr. Slater was the Managing Partner of Arthur Andersens Central Asian
practice. Mr. Slater is a Canadian Chartered Accountant (1995) and holds a BBA from Simon Fraser
University (1994).
Mr. Jeffrey Mason
Mr. Mason is a Director of the Company. Mr. Mason holds a Bachelor of Commerce degree from the
University of British Columbia (1980) and obtained his Chartered Accountant designation from the
Institute of Chartered Accountants, BC in August 1982 while at the international accounting firm of
Deloitte & Touche. Following comptrollership positions at Homestake Mining Group of companies. Mr.
Mason has spent the last several years as a corporate officer and director to a number of publicly-traded
mineral exploration companies. Until early 2008, Mr. Mason was employed as Chief Financial Officer of
Hunter Dickinson Inc. and his principal occupation was the financial administration of the public
companies to which Hunter Dickinson Inc. provides services.
Mr. Jay Sujir
Mr. Sujir is a Director of the Company. Mr. Sujir is a securities and natural resources lawyer who has
extensive experience in advising and assisting public companies. He has been a partner with Anfield
Sujir Kennedy & Durno and its predecessor firms since 1991. Mr. Sujir obtained his Bachelor of Arts
degree from the University of Victoria in 1981 with a double major in Economics and Philosophy and
obtained his Bachelor of Law degree from the University of Victoria in 1985. He is a member of the Law
Society of British Columbia, the Canadian Bar Association, and the British Columbia Advisory
Committee of the TSX Venture Exchange.

008226000-00082763; 17

-2ITEM 4:

AUDIT COMMITTEE OVERSIGHT

At no time since the commencement of the Company's most recently completed financial year was a
recommendation of the Committee to nominate or compensate an external auditor (currently, Ernst &
Young LLP, Chartered Accountants) not adopted by the Board.
ITEM 5:

RELIANCE ON CERTAIN EXEMPTIONS

Since the effective date of NI 52-110, the Company has not relied on the exemptions contained in sections
2.4 or 8 of the Instrument. Section 2.4 provides an exemption from the requirement that the audit
committee must pre-approve all non-audit services to be provided by the auditor, where the total amount
of fees related to the non-audit services are not expected to exceed 5% of the total fees payable to the
auditor in the fiscal year in which the non-audit services were provided. Section 8 permits a company to
apply to a securities regulatory authority for an exemption from the requirements of NI 52-110, in whole
or in part.
ITEM 6:

PRE-APPROVAL POLICIES AND PROCEDURES

Formal policies and procedures for the engagement of non-audit services have yet to formulated and
adopted. Subject to the requirements of the Instrument, the engagement of non-audit services is
considered by the Company's Board of Directors, and where applicable by the Audit Committee, on a
case by case basis.
ITEM 7:

EXTERNAL AUDITOR SERVICE FEES (BY CATEGORY)

The aggregate fees charged to the Company by the external auditor the last fiscal year is as follows:
FYE 2010
Audit fees for the year ended
All other fees:
Total Fees:
ITEM 8:

$35,000
Nil
$35,000

EXEMPTION

In respect of the most recently completed financial year, the Company is relying on the exemption set out
in section 6.1 of the Instrument with respect to compliance with the requirements of Part 3 (Composition
of the Audit Committee) and Part 5 (Reporting Obligations) of the Instrument.

008226000-00082763; 17

SCHEDULE "B" to the Preliminary Prospectus of

RED EAGLE MINING CORPORATION dated April 28, 2011

Pursuant to National Instrument 58-101 Disclosure of Corporate Governance Practices of the Canadian
Securities Administrators the Company is required to and hereby discloses its corporate governance
practices as follows.
ITEM 1.

BOARD OF DIRECTORS

The Board of Directors of the Company facilitates its exercise of independent supervision over the
Companys management through frequent meetings of the Board. The Board reviews its procedures on
an ongoing basis to ensure it is functioning independently of management. As circumstances require, the
Board meets without management present, and convenes meetings, as deemed necessary, of the
independent directors, at which meetings non-independent directors and members of management are not
in attendance. When conflicts arise, interested parties are precluded from voting on matters in which they
may have an interest.
Mr. Ian Slater is a director and is the Chairman and Chief Executive Officer of the Company and is
therefore not independent.
Mr. Robert Bell, a director of the Company, is "independent" in that he is independent and free from any
interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the directors ability to act with the best interests of the Company, other than the
interests and relationships arising from shareholdings.
Mr. Jeffrey Mason, a director of the Company, is "independent" in that he is independent and free from
any interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the directors ability to act with the best interests of the Company, other than the
interests and relationships arising from shareholdings.
Mr. Tim Petterson, a director of the Company, and is the Vice-President Corporate Development and is
therefore not independent.
Mr. Jay Sujir, a director of the Company, is "independent" in that he is independent and free from any
interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the directors ability to act with the best interests of the Company, other than the
interests and relationships arising from shareholdings.
Mr. Ken Cunningham, a director of the Company, is "independent" in that he is independent and free
from any interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the directors ability to act with the best interests of the Company, other than the
interests and relationships arising from shareholdings.
Mr. Robert Pease, a director of the Company, is "independent" in that he is independent and free from any
interest and any business or other relationship which could, or could reasonably be perceived to,
materially interfere with the directors ability to act with the best interests of the Company, other than the
interests and relationships arising from shareholdings.

008226000-00082763; 17

2
ITEM 2.

DIRECTORSHIPS

The directors of the Company are currently directors of the following other reporting issuers:
Name of Director
Ian P. Slater

Slater Mining Corporation

Miranda Gold Corp.
IBC Advanced Alloys Corp.
Amarc Resources Ltd.
Coastal Contacts Inc.
Slater Mining Corporation
AMI Resources Inc.
Slater Mining Corporation
Sunward Resources Ltd.
Crosshair Exploration & Mining Corp.
Escape Gold Inc.
Santa Fe Metals Corporation
Midasco Capital Corp.
Cannon Point Resources Ltd.
Uracan Resources Ltd.
Excelsior Mining Corp.
Norwood Resources Ltd.
Slater Mining Corporation
Slater Mining Corporation
Miranda Gold Corp.
Pilot Gold Inc.
Richfield Ventures Corp.

Jeffrey Mason
Jay Sujir

Robert Bell
Tim Petterson
Ken Cunningham
Robert Pease

ITEM 3.

Name of Reporting Issuer

ORIENTATION AND CONTINUING EDUCATION

The Board of Directors of the Company brief all new directors with the policies of the Board of Directors,
and other relevant corporate and business information.
ITEM 4.

ETHICAL BUSINESS CONDUCT

The Board has found that the fiduciary duties placed on individual directors by the Companys governing
corporate legislation and the common law and the restrictions placed by applicable corporate legislation
on an individual directors participation in decisions of the Board in which the director has an interest
have been sufficient to ensure that the Board operates independently of management and in the best
interests of the Company.
Under the corporate legislation, a director is required to act honestly and in good faith with a view to the
best interests of the Company and exercise the care, diligence and skill that a reasonably prudent person
would exercise in comparable circumstances, and disclose to the board the nature and extent of any
interest of the director in any material contract or material transaction, whether made or proposed, if the
director is a party to the contract or transaction, is a director or officer (or an individual acting in a similar
capacity) of a party to the contract or transaction or has a material interest in a party to the contract or
transaction. The director must then abstain from voting on the contract or transaction unless the contract
or transaction (i) relates primarily to their remuneration as a director, officer, employee or agent of the
Company or an affiliate of the Company, (ii) is for indemnity or insurance for the benefit of the director
in connection with the Company, or (iii) is with an affiliate of the Company. If the director abstains from
voting after disclosure of their interest, the directors approve the contract or transaction and the contract
or transaction was reasonable and fair to the Company at the time it was entered into, the contract or
transaction is not invalid and the director is not accountable to the Company for any profit realized from
the contract or transaction. Otherwise, the director must have acted honestly and in good faith, the
contract or transaction must have been reasonable and fair to the Company and the contract or transaction

008226000-00082763; 17

3
be approved by the shareholders by a special resolution after receiving full disclosure of its terms in order
for the director to avoid such liability or the contract or transaction being invalid.
ITEM 5.

NOMINATION OF DIRECTORS

The Board of Directors is responsible for identifying individuals qualified to become new Board members
and recommending to the Board new director nominees for the next annual meeting the shareholders.
New nominees must have a track record in general business management, special expertise in an area of
strategic interest to the Company, the ability to devote the time required, shown support for the
Companys mission and strategic objectives, and a willingness to serve.
ITEM 6.

COMPENSATION

The Board of Directors conducts reviews with regard to directors compensation once a year. To make its
recommendation on directors compensation, the Board of Directors takes into account the types of
compensation and the amounts paid to directors of comparable publicly traded Canadian companies.
ITEM 7.

OTHER BOARD COMMITTEES

The Board of Directors has no other committees other than the Audit Committee.
ITEM 8.

ASSESSMENTS

The Board of Directors monitors the adequacy of information given to directors, communication between
the board and management and the strategic direction and processes of the board and committees.

008226000-00082763; 17