IN THIS SECTION

›	Introduction
›	Highlights
›	Overview
›	Operations
›	Operational Review
›	Results from Operations
›	Selected Quarterly Financial Information
›	Selected Annual Information
›	Financial Results
›	Liquidity and Capital Resources
›	Commitments and Contractual Obligations
›	Related Party Transactions
›	Outlook
›	Share Capital
›	Critical Accounting Estimates
›	Risks and Uncertainties
›	Comprehensive Income
›	Adoption of New Accounting Policies
›	New Accounting Pronouncements
›	Safe Harbour Statement
›	Non-GAAP Measures

Management’s Discussion and Analysis of Financial Condition and Results of Operations

For the year ended December 31, 2007 (Expressed in United States dollars)

NEW ACCOUNTING PRONOUNCEMENTS

Effective January 1, 2008

The CICA has issued three new standards which may affect the financial disclosures and results of operations of the Company for interim and annual periods beginning January 1, 2008. The Company will adopt the requirements commencing in the interim period ended March 31, 2008 and is considering the impact these will have on the Company’s financial statements.

(a) Section 1535 – Capital Disclosures

This Section establishes standards for disclosing information about an entity’s capital and how it is managed. Under this standard the Company will be required to disclose the following, based on the information provided internally to the entity’s key management personnel:

(i)	Qualitative information about its objectives, policies and processes for managing capital;
(ii)	Summary quantitative data about what it manages as capital.;
(iii)	Whether during the period it complied with any externally imposed capital requirements to which it is subject; and
(iv)	When the company has not complied with such externally imposed capital requirements, the consequences of such non-compliance.

(b) Section 3031 - Inventories

This Section prescribes the accounting treatment for inventories and provides guidance on the determination of costs and their subsequent recognition as an expense, including any write-down to net realizable value. It also provides guidance on the cost formulas that are used to assign costs to inventories.

(c) Section 3862 – Financial Instruments – Disclosures

This Section requires entities to provide disclosure of quantitative and qualitative information in their financial statements that enables users to evaluate: (a) the significance of financial instruments for the entity's financial position and performance; and (b) the nature and extent of risks arising from financial instruments to which the entity is exposed during the period and at the balance sheet date, and Management's objectives, policies and procedures for managing such risks. Entities will be required to disclose the measurement basis or bases used and the criteria used to determine classification for different types of instruments.

The Section requires specific disclosures to be made, including the criteria for:

(i)	Designating financial assets and liabilities as held for trading;
(ii)	Designating financial assets as available-for-sale; and
(iii)	Determining when impairment is recorded against the related financial asset or when an allowance account is used.

(d) Section 1400 - General Standards of Financial Statement Presentation

This Section requires that Management make an assessment of a company's ability to continue as a going concern and to use the going concern basis in the preparation of the financial statements unless Management either intends to liquidate the company or to cease trading, or has no realistic alternative but to do so. When Management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon a company's ability to continue as a going concern, those uncertainties should be disclosed.

Effective January 1, 2009

The CICA has issued a new standard which may affect the financial disclosures and results of operations of the Company for interim and annual periods beginning January 1, 2009. The Company will adopt the requirements commencing in the interim period ended March 31, 2009 and is considering the impact these will have on the Company's financial statements.

Section 3064 – Goodwill and intangible assets

This Section established revised standards for recognition, measurement, presentation and disclosure of goodwill and intangible assets. Concurrent with the introduction of this standard, the CICA withdrew EIC 27, Revenues and Expenses during the pre-operating period. As a result of the withdrawal of EIC 27, the Company will no longer be able to defer costs and revenues incurred prior to commercial production at new mine operations. The Company is currently considering the impact this will have on its financial statements.