BACANORA MINERALS LTD.

MANAGEMENT'S DISCUSSION AND ANALYSIS

FOR THE YEAR ENDED JUNE 30, 2012

DATE – OCTOBER 30, 2012

The following Management’s Discussion and Analysis ("MD&A") should be read in

conjunction with Bacanora Minerals Ltd. ("Bacanora" or the "Company") audited consolidated
financial statements for the year ended June 30, 2012, together with the accompanying notes.
The following discussion and analysis provides information that management believes is
relevant to the assessment and understanding of the Company’s results of operations and
financial position. In the opinion of management, all adjustments consisting of normal
recurring adjustments, considered necessary for a fair presentation of the Company's financial
position, results of operations and funds flow, have been included. Additional information
relating to Bacanora is available on SEDAR at www.sedar.com.

THE COMPANY

The Company is a public mining company engaged in exploration for mineral deposits in
Mexico. The Company is in the exploration stage with respect to all of its properties. On July
20, 2009, the Company entered into a binding letter of agreement dated July 17, 2009
regarding the acquisition of Mineramex Limited (“Mineramex”), a British Virgin Islands
company whose sole assets consist of 99.9% of the issued and outstanding shares of Minera
Sonora Borax, S.A. de C.V. ("MSB") and 60% of the issued and outstanding shares of
Minerales Industriales Tubutama, S.A. de C.V. ("MIT"). MSB and MIT are two Mexican
corporations that are holding certain exploration and development stage borate and other
mining claims in the Magdalena and Tubutama regions in the northern Sonora State of
Mexico. On April 9, 2010, The Company completed its qualifying transaction by a way of
reverse takeover of Mineramex. The Company was listed on the Exchange as a Tier 2 issuer
and the trading of the Company’s shares under the revised symbol, "BCN" commenced on
April 20, 2010.

The following diagram illustrates the Company’s corporate legal structure.

Bacanora Minerals Ltd.

(Canada)
100%

Mineramex Limited
(BVI)

99.9% 60%
Minerales Industriales
Minera Sonora Borax,
S.A. de C.V. (Mexico) Tubutama S.A. de
C.V.(Mexico)

MINERAL PROPERTIES

As a result of the reverse takeover of Mineramex, the Company indirectly holds the assets of
MIT and MSB, including borate mining claims in the Magdalena and Tubutama regions in the
northern Sonora State of Mexico. In addition, the Company holds certain lithium claims in the

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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

Sonora State, which it acquired in August 2010. The specific descriptions of such claims are
as follows:

Tubutama Borate

Originally referred to as the Carlos Project, Tubutama Borate project consists of six mining
concessions with a total area of 1,661 hectares. The concessions are located 15 kilometres
from the town of Tubutama, and they are 100% owned by MIT.

Magdalena Borate

Originally referred to as San Francisco and El Represo projects, the Magdalena Borate project
consists of seven concessions, with a total area of 15,508 hectares. The concessions are
located 15 kilometres from the city of Magdalena and the city of Santa Ana, and are 100%
owned by MSB

The borate properties (Tubutama and Magdalena) are subject to a 3% gross overriding royalty
payable to a director of the Company, and a 3% gross overriding royalty payable to the
original concessioners on sales of products produced from these properties.

Sonora Lithium

The Company, through its subsidiary MSB, acquired all rights, title and interests in certain
lithium claims from a related party. As consideration for the assets, the Company issued
600,000 common shares at a price of $0.25 per share. In addition, the Company paid cash
payments of US$40,000 to reimburse the vendors for acquisition and preliminary assessment
costs. The property consists of four exploration licenses, covering approximately 4,050
hectares in the Sonora State of Mexico. The Lithium property is subject to a 3% gross
overriding royalty payable to a director of the Company on sales of products produced from
this property.

At June 30, 2012, the lithium concession titles were held in trust by the vendors and are
currently being transferred to MSB. The Company expects that the titles will be received by
MSB in due course. Any changes in management’s estimate of this asset will be recognized
in the period of determination and the change in estimate may be significant.

EXPLORATION ACTIVITIES

The Company is in the exploration stage with respect to all of its properties, and has not
commenced generating any cash flows from said properties.

Borate Properties

At the Tubutama project, the Company has drilled a total of 1,882 metres in 8 NQ-core
drillholes and 1,478 lineal metres of trenches have been conducted in the northern portion of
the project area, with an estimated resource of 2.5 Mt of colemanite, with 7% of B2O3, and
although these values are considered modest for a high grade operation, the Company has
decided to maintain the properties in order to perform metallurgical tests on the low-grade ore,
and for possible use of the ore at the Company’s full scale plant.

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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

At the Magdalena project, the Company has completed two rounds of drilling on its borate
properties. In May of 2010, the Company drilled 3,483 metres in 25 holes at the Magdalena
and Represo basins, with approximately 1,033 core samples taken. Three main borate zones
have been located on the Magdalena project area: El Cajon, Bellota and Pozo Nuevo. Of the
main borate zones, the El Cajon deposit is most advanced, with a total of 28 holes drilled,
identifying 3 separate colemanite horizons (Unit A, B, and C). According to the NI43-101
report filed by the Company in June of 2011, the El Cajon deposit contains an inferred
resource of 7.3 million tonnes averaging 9.3% B2O3 in Unit A, and indicated resources totaling
11.1 million tonnes averaging 9.9% B2O3 in Units B and C. In September of 2011, the
Company completed an in-fill drilling program of 8,663 metres in 57 holes on the El Cajon
deposit, 2,616 samples were taken as part of the in-fill drilling.

During the second quarter of 2012, the Company announced that it had successfully achieved
marketable grades of colemanite concentrate after extensive laboratory testing of borates
samples from its El Cajon deposit. Bench scale testing has yielded product with grades
upwards of 40% B2O3, which is considered as the industry benchmark grade for commercial
production of colemanite concentrate. Based on this testing, the Company has refined its pilot
plant flow sheet, and is currently in the process of procuring components for and constructing
the pilot plant. The Company expects to have the pilot plant completed in December 2012,
and to achieve possible production of colemanite concentrates in the first quarter of 2013.
The Company is contemplating testing production of boric acid at its pilot plant as well. The
Company is also proceeding with full scale mine plan and pit design. Mining permit
applications have been finalized and all applicable documents are ready for filing with the
Secretary of Environment for the State of Sonora.

The Company is also in the process of conducting bulk sampling, detailed metallurgical testing
and Preliminary Economic Assessment (“PEA”) in order to update the El Cajon deposit from
“resource” to “reserve” category under its NI43-101 report.

Lithium Property

The Company initiated exploration on the lithium property during the second quarter of 2010,
when it conducted its first drilling campaign on the La Ventana concession within the Sonora
Lithium project. The drilling provided an initial test of a 400 by 200 metre section of the
southernmost portion of a 3,000 by 300 metre target area. The four hole, 458.4 metre,
diamond drill program was designed to test a Tertiary age volcano-sedimentary sequence. All
of the drillholes intersected lithium-bearing clays (hectorite) including zones with lithium
enrichment. Other elements such as Cesium, Boron, Potassium, Magnesium, etc. are
considered highly anomalous as well. The second round of drilling at La Ventana was
completed in December of 2011. The Company drilled a total of 1,465 metres in 8 holes.

The two rounds of drilling on the La Ventana concession located two lithium-bearing clay units
that average 41 and 22 metres in thickness. Based on the NI43-101 Technical Report
prepared by the Company, the inferred resource for both upper and lower clay units is
estimated to be 43,324,000, tonnes bearing an average grade of 3,005 Li ppm at 1.6%
Lithium Carbonate Equivalent (“LCE”) for a total of 712,000 tonnes of LCE.

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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

Investors are cautioned that the resource estimate does not mean or imply that an economic
lithium deposit exists at the La Ventana concession. Further testing will need to be
undertaken to confirm economic feasibility.

Along with the drilling on La Ventana, exploration activities such as mapping and systematic
sampling continue on other concessions (El Sauz, Buenavista and San Gabriel). Currently,
the Company is carrying out metallurgical tests on the samples before planning the next stage
of the drilling programme.

The Company capitalizes all exploration costs subsequent to obtaining the right to explore
related to the projects in Mexico to exploration and evaluation assets. Below is a summary of
expenditures made for the year ended June 30, 2012 and 2011.

Tubutama Magdalena Sonora

Borate Borate Lithium Total
Balance, July 1, 2010 $ 1,144,443 $ 324,467 $ - $ 1,468,910
Additions:
Concession tax $- $ 127,412 $ 4,972 $132,384
Acquisition - 3,977 166,380 170,357
Exploration - 206,428 31,006 237,434
Drilling - 434,721 70,212 504,933
Analysis and assays - 11,754 4,484 16,238
Technical services - 100,222 - 100,222
Travel - 50,826 8,013 58,839
Office and
miscellaneous (59,646) 64,621 48,383 53,358
Total additions $ (59,646) $ 999,961 $ 333,450 $ 1,273,765
Balance, June 30, 2011 $ 1,084,797 $ 1,324,428 $ 333,450 $ 2,742,675
Additions:
Concession tax $ 10,891 $ 207,063 $ 4,371 $ 222,325
Acquisition - - 1,267 1,267
Exploration 30,878 342,043 2,924 375,845
Drilling 12,553 625,868 196,752 835,173
Analysis and assays 1,795 135,538 24,649 161,982
Technical services 4,741 45,442 10,038 60,221
Travel 970 63,411 3,810 68,191
Office and
miscellaneous 6,679 140,114 69,551 216,344
Total additions $ 68,507 $ 1,559,479 $ 313,362 $ 1,941,348
Balance, June 30, 2012 $ 1,153,304 $ 2,883,907 $ 646,812 $ 4,684,023

OUTLOOK

The Company continues to focus on the development of its borate and lithium deposits in
Sonora, Mexico. To support the continued evaluation of the projects in a technically
disciplined and measured manner, a number of activities are underway or planned for the
remainder of 2012 and 2013:

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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

 Further analysis of assay results and metallurgical test work.

 Upgrade the NI43-101 Report and start preliminary economic analysis.
 Finalize construction of the pilot plant and installation of all components.
 Achieving pilot plant operations.
 Refine a process to produce boric acid economically.
 Develop mine plan.
 Further market analysis and evaluation of end user requests for product.

In addition to the work being completed on the borate deposits, work continues to be
undertaken to advance the Company’s lithium deposits including:

 Continued analysis of assay results.

 Solubility tests of the lithium clays from La Ventana project.
 Geological mapping and sampling on other lithium properties.
 Preliminary Economic Assessment at the Sonora Lithium project.

The Company expects that cash raised in the last equity financing will fully fund the
contemplated programs and general operations.

LIQUIDITY AND CAPITAL MANAGEMENT

Working Capital

The Company is not in commercial production on any of its resource properties and
accordingly, it does not generate cash from operations. The Company finances its activities
by raising capital through equity issues. As at June 30, 2012, the Company had a working
capital surplus of $3,885,784 (2011 – $6,340,655). The current working capital is dedicated
towards the completion of the Mexican exploration program started in May. At June 30, 2012,
the Company does not have any bank debt and does not plan on securing any long-term debt.
The Company intends on meeting its financial commitments through further equity financings.

Capital structure

The Company's objectives in managing capital are to safeguard its ability to operate as a
going concern while pursuing opportunities for growth through identifying and evaluating
potential acquisitions or businesses. The Company defines capital as the Company's
shareholders equity excluding contributed surplus and non-controlling interest, of $8,028,304
at June 30, 2012 (June 30, 2011 - $8,793,719, July 1, 2010 - $3,001,471), and the Company’s
working capital of $3,885,784 (June 30, 2011 - $6,340,655, and July 1, 2010 - $1,348,100).
The Company sets the amount of capital in proportion to risk and corporate growth objectives.
The Company manages capital structure and makes adjustments to it in light of changes in
economic conditions and the risk characteristics of the underlying assets. The Company is
not subject to any externally imposed capital requirements other than as described in Note 1
to the Company’s annual consolidated financial statements. The Company does not expect to
enter into any debt financing at this time. The Board of Directors does not establish a
quantitative return on capital criteria for management; but rather promotes year over year
sustainable profitable growth. The Company will be meeting its objective of managing capital
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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

through its detailed review and preparation of both short-term and long-term cash flow
analysis and monthly review of financial results.

Equity instruments

On May 18, 2011, the Company completed a private placement financing, pursuant to which it
has issued an aggregate of 14,113,760 units of the Company at a price of $0.50 per unit for
aggregate gross proceeds of $7,056,880. Each unit consists of one common share and one-
half of one common share purchase warrant, with each whole warrant being exercisable into
one common share at a price of $0.80 for a period of 30 months. The Company has paid
compensation consisting of approximately $510,174 in legal and commission fees and the
issuance of 705,688 compensation warrants to eligible parties. Each compensation warrant is
exercisable into one common share at a price of $0.80 for a period of 24 months.
The Company did not complete any financings during the year ended June 30, 2012.

The following tables summarize the outstanding securities issued by the Company as at June
30, 2012 and as of the date of this MD&A.

October 30, 2012 June 30, 2012

Common shares 51,432,145 51,432,145
Stock options 2,900,000 2,900,000
Warrants 7,762,568 7,762,568
Total equity instruments outstanding 62,094,713 61,094,713

The following table summarizes the outstanding options as at June 30, 2012.

Weighted
Number Average Number
Outstanding Remaining Exercisable
at June 30, Exercise Contractual Date of at June 30,
Date of Grant 2012 Price Life (Years) Expiry 2012
May 1, 2009 400,000 $ 0.20 1.8 May 1, 2014 400,000
December 8, 2010 1,050,000 0.24 3.4 Dec. 8, 2015 1,050,000
March 25, 2011 100,000 0.50 3.7 Mar. 25, 2016 100,000
June 19, 2011 350,000 0.44 4.0 Jun. 19, 2016 350,000
July 19, 2011 900,000 0.50 4.0 July19, 2016 900,000
September 1, 2011 100,000 0.50 0.2 Sept. 1, 2012 100,000
2,900,000 2,900,000

SELECTED ANNUAL INFORMATION

The Company is in the early stages of exploration, and does not have any mining operations
and has not earned any revenue, except for interest income. While the information set out in
the tables below is mandated by National Instrument 51-102, it is management’s view that the

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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

variations in financial results that occur from year to year and quarter to quarter are not
particularly helpful in analyzing the Company’s performance. It is in the nature of the business
of junior exploration companies that unless they sell a mineral interest for a sum greater than
the costs incurred in acquiring such interest, they have no significant net sales or total
revenue. Because the majority of their expenditures consist of exploration costs that are
capitalized, exploration companies’ annual and quarterly losses usually result from costs that
are of a general and administrative nature.

Significant variances in the Company’s reported loss from year to year and quarter to quarter
most commonly arise from several factors that are difficult to anticipate in advance or to
predict from past results. These factors include: (i) decisions to write off deferred exploration
costs when management concludes there has been an impairment in the carrying value of a
mineral property, or the property is abandoned, (ii) the vesting of incentive stock options,
which results in the recording of amounts for stock based compensation expense that can be
quite large in relation to other general and administrative expenses incurred in any given
period, and (iii) fluctuations in foreign exchange rates.

For the year ended June 30, 2012, the Company recorded a loss of $ 994,463(2011 - $
1,015,962). During 2012, the Company recorded $272,439 in stock based compensation
expense and $311,737 in 2011. The Company general and administrative expenses for 2012
were $ 585,125 (2011 – $546,545).

For the year For the year For the year

ended June 30, ended June 30, ended June 30,
($, except shares amounts) 2012 2011 2010
Interest income (expense) 27,177 4,689 2,350
Total expenses 974,717 843,734 76,746
Comprehensive loss 838,646 1,171,123 25,316
Comprehensive loss per share –
basic and diluted 0.02 0.03 0.00
Funds provided (used) in operations (571,085) (943,167) (44,611)
Total assets 9,022,692 9,511,551 3,124,809
Total liabilities 434,956 357,608 229,166
Exploration and evaluation costs 1,941,348 1,123,765 501,670
General and administrative costs 585,125 546,545 74,958

During the year ended June 30, 2012, the Company’s general and administrative expenses
increased by approximately $39,000.

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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

General and administrative expenses for the years ended June 30, 2012 and 2011 were as
follows:

For the year ended, June 30, 2012 June 30, 2011
Management fees $ 145,338 $ 112,650
Legal and accounting fees 236,509 208,740
Engineering fees - 47,540
Investor relations 149,009 88,465
Office expenses 36,698 81,337
Miscellaneous 17,571 7,813
Total $ 585,125 $ 546,545

SUMMARY OF QUARTERLY RESULTS

The Company is in the early stages of exploration, and does not have any producing
operations and has not earned any revenue.

During the quarter ended June 30, 2012, the Company realized a comprehensive income of
$236,264, incurred $595,158 on exploration activities, and $262,266 on general and
administrative expenses.

Comprehensive
Comprehensive earnings/(loss) per basic
Three month period ended income/(loss) ($) and diluted share ($)
June 30, 2012 236,264 (0.00)
March 31, 2012 (160,297) (0.00)
December 31, 2011 (408,427) (0.01)
September 30, 2011 (506,186) (0.01)
June 30, 2011 (1,058,974) (0.03)
March 31, 2011 (67,282) (0.00)
December 31, 2010 (137,817) 0.00
September 30, 2010 33 0.00

SEGMENTED INFORMATION

The Company currently operates in one operating segment, the exploration and development
of mineral properties in Mexico. Management of the Company makes decisions about
allocating resources based on the one operating segment. A geographic summary of profit
and loss and identifiable assets by country is as follows:

Mexico Canada Consolidated

June 30, June 30, June 30, June 30, June 30, June 30,
2012 2011 2012 2011 2012 2011
Property and
equipment $ 210,533 $ 47,014 $ - $ - $ 210,533 $ 47,014
Exploration and
evaluation assets $ 4,684,023 $ 2,742,675 $ - $ - $ 4,684,023 $ 2,742,675

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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

This note presents information about the Company’s exposure to credit, liquidity and market risks
arising from its use of financial instruments and the Company’s objectives, policies and processes for
measuring and managing such risks.

i) Credit risk

Credit risk arises from the potential that a counter party will fail to perform its obligations. Financial
instruments that potentially subject the Company to concentrations of credit risk consist of accounts and
related party receivables. The Company believes that the amount due from related party is collectible,
however as the amount has not been collected subsequent to year end its recoverability is uncertain.
Any changes in management’s estimate of the recoverability of the amount due will be recognized in
the period of determination and any adjustment may be significant. The carrying amount of accounts
and related party receivables represents the maximum credit exposure.

The Company’s cash is held in major Canadian and Mexican banks, and as such the Company is
exposed to the risks of those financial institutions. The Company has no sales, therefore the Company
is only exposed to the risks associated with changes in foreign exchange rates.

The Board of Directors monitors the exposure to credit risk on an ongoing basis and does not consider
such risk significant at this time. The Company considers all of its accounts receivables fully collectible.

ii) Liquidity risk

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they are
due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses. The carrying value of accounts payable and accrued liabilities and due
to related parties approximates fair value due to their relatively short period to maturity.

iii) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, commodity prices,
and interest rates will affect the value of the Company’s financial instruments. The objective of market
risk management is to manage and control market risk exposures within acceptable limits, while
maximizing long-term returns.

The Company conducts exploration projects in Mexico. As a result, a portion of the Company’s
expenditures, accounts receivables, accounts payables and accrued liabilities are denominated in US
dollars and Mexican pesos and are therefore subject to fluctuation in exchange rates. As at June 30,
2012, a 1% change in the exchange rate between the Canadian dollar, Mexican peso and US dollar
would have an approximate $13,000 (2011 - $54,000) change to the Company’s total comprehensive
loss.

iv) Fair values

The carrying value approximates the fair value of the financial instruments due to the short
term nature of the instruments.

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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

RELATED PARTY TRANSACTIONS

The Company’s related parties include directors and officers and companies which have
directors in common. Transactions made with related parties are made in the normal course
of business and are measured at the exchange amount, which is the amount of consideration
established and agreed to by the related parties.

During the year ended June 30, 2012, management fees in the amount of $332,550 (2011 -
$280,166) were incurred by directors and officers of the Company. Of this amount $83,534
(2011 - $119,541) was capitalized to exploration and evaluation assets, $NIL (2011 - $33,571)
was recorded as share issue costs, and $249,016 (2011 - $127,054) was expenses as
general and administrative costs. Of the total amount paid as management fees and
expenses, $69,179 (2011 – $21,153) remains in accounts payable and accrued liabilities.

A company with common directors and shareholders made payment on behalf of the
Company with respect of an office sublease and other general and administrative expenses in
the amount of $45,046 (2011 - $100,318). The advances are non-interest bearing, unsecured
with no specific terms of repayment.

The Company was repaid advances of $100,203 (2010 – made advances of $107,599) to a
company with common directors and officers. The advances are non-interest bearing,
unsecured with no specific terms of repayment.

A Company with common management incurred $246,699 (2011 - $101,710) charged to exploration
and evaluation assets during the year. An amount of $28,795 (2011 - $15,774) remains in accounts
payable and accrued liabilities.

a) Key management personnel compensation

Key management of the Company are directors and officers of the Company and their
remuneration includes the following:

For the year ended, June 30, 2012 June 30, 2011
Short-term benefits (i) $ 332,550 $ 280,166
Share based compensation 272,439 311,737
Total remuneration $ 604,989 $ 591,903
(i) Short-term benefits include consulting fees.

COMMITMENTS AND CONTINGENCIES

During 2009, the Company entered into an office space lease agreement for a term of three
years, commencing April 1, 2010 and expiring March 31, 2013. The Company also has
commitments for lease payments for field office and camp with no specific expiry dates. The
total annual financial commitment resulting from these agreements is $40,860.

The properties in Mexico are subject to spending requirements in order to maintain title of the
concessions. The capital spending requirement for 2013 is $312,083. The properties are also
subject to semi-annual payments to the Mexican government for holding fees.
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 BACANORA MINERALS LTD.
MANAGEMENT'S DISCUSSION AND ANALYSIS
FOR THE YEAR ENDED JUNE 30, 2012

SUBSEQUENT EVENTS

Subsequent to June 30, 2012, a further 1,102,507 shares were released from escrow. The
number of shares remaining in escrow is 3,953,209.

On September 28, 2012, the Company announced that a total of 150,000 stock options to
purchase common shares of the Company have been granted to consultants. The options are
immediately exercisable at a price of $0.25 and expire on September 28, 2017.

On August 10, 2012, the Company entered into purchase orders for the construction of its
building in Mexico totalling $313,583 USD.

On October 25, 2012, the Company received an approval to extend the term of the 7,056,880
outstanding share purchase warrants from eighteen months to thirty months from the date of
issuance. The foregoing warrants were to expire on November 18, 2012, the new expiry date
is November 18, 2013.

TRANSITION TO INTERNATIONAL FINANCIAL REPORTING STANDARDS (“IFRS”)

In February 2008, the CICA Accounting Standards Board (“AcSB”) announced that 2011 is
the changeover date for publicly accountable profit-oriented enterprises to use IFRS, replacing
Canadian GAAP for interim and annual financial statements relating to fiscal years beginning
on or after January 1, 2011. Enterprises are required to provide IFRS comparative
information for the previous fiscal year. Accordingly, the Company has prepared its audited
annual financial statements for the year ending June 30, 2012 in accordance with IFRS
(including the prior period comparatives).

The conversion to IFRS did not result in any significant changes to processes or data
management within the Company except that, additional schedules and data collection points
are required to meet the new disclosure requirements under IFRS. The conversion to IFRS
did result in changes in accounting policies of the Company, which are described in more
detail in note 3 to the audited annual financial statements for the year ended June 30, 2012.

A description of the impact of first-time adoption of IFRS can be reviewed in Note 17 to the
audited annual financial statements of the Company for the year ended June 30, 2012.

ADVISORY REGARDING FORWARD LOOKING STATEMENTS

This discussion includes certain statements that may be deemed "forward-looking statements". All
statements in this discussion other than statements of historical facts, that address future acquisitions
and events or developments that the Company expects are forward-looking statements. Although the
Company believes the expectations expressed in such forward-looking statements are based on
reasonable assumptions, such statements are not guarantees of future performance and actual results
or developments may differ materially from those in the forward-looking statements. Factors that could
cause actual results to differ materially from those in forward-looking statements include market prices,
continued availability of capital and financing and general economic, market or business conditions.
Investors are cautioned that any such statements are not guarantees of future performance and that
actual results or developments may differ materially from those projected in the forward-looking
statements. Except as required by applicable securities laws, the Corporation does not undertake any
obligation to publicly update or revise any forward looking statements.
11