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Drn - Delrand - Management`s Discussion And Analysis Of Financial Condition And

Release Date: 18/08/2011 17:45:05      Code(s): DRN
DRN - Delrand - Management`s Discussion and Analysis of Financial Condition and 
Results of Operations                                                           
DELRAND RESOURCES LIMITED                                                       
(formerly BRC DiamondCore Ltd.)                                                 
(Incorporated in Canada)                                                        
(Corporation number 627115-4)                                                   
Share code: DRN & ISIN Number: CA2472671072                                     
("Delrand" or "the Company")                                                    
MANAGEMENT`S DISCUSSION AND ANALYSIS                                            
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS                                
The following management`s discussion and analysis of financial condition and   
results of operations (the "MD&A") has been prepared by management and provides 
a review of the activities, results of operations and financial condition of    
Delrand Resources Limited (the "Company" or "Delrand") based upon International 
Financial Reporting Standards ("IFRS").  This MD&A should be read in conjunction
with the unaudited interim condensed consolidated financial statements as at and
for the three and six month periods ended June 30, 2011, as well as the notes   
thereto, the audited consolidated financial statements as at and for the        
financial year of the Company ended December 31, 2010 ("fiscal 2010") and the   
notes thereto and the annual MD&A for fiscal 2010. All amounts are expressed in 
Canadian dollars unless otherwise stated.                                       
This MD&A is dated August 12, 2011.  Additional information relating to the     
Company, including the Company`s annual information form, is available on SEDAR 
at www.sedar.com.                                                               
FORWARD-LOOKING STATEMENTS                                                      
The following MD&A contains forward-looking statements.  All statements, other  
than statements of historical fact, that address activities, events or          
developments that the Company believes, expects or anticipates will or may occur
in the future (including, without limitation, statements relating to exploration
results, potential mineralization and future plans and objectives of the        
Company) are forward-looking statements.  These forward-looking statements      
reflect the current expectations or beliefs of the Company based on information 
currently available to the Company.  Forward-looking statements are subject to a
number of risks and uncertainties that may cause the actual results of the      
Company to differ materially from those discussed in the forward-looking        
statements, and even if such actual results are realized or substantially       
realized, there can be no assurance that they will have the expected            
consequences to, or effects on the Company.  Factors that could cause actual    
results or events to differ materially from current expectations include, among 
other things, uncertainties relating to the availability and costs of financing 
needed in the future, the possibility that future exploration results will not  
be consistent with the Company`s expectations, changes in equity markets,       
changes in diamond markets, foreign currency fluctuations, political            
developments in the Democratic Republic of the Congo (the "DRC"), changes to    
regulations affecting the Company`s activities, delays in obtaining or failure  
to obtain required project approvals, the uncertainties involved in interpreting
geological data and the other risks involved in the mineral exploration         
business.  Any forward-looking statement speaks only as of the date on which it 
is made and, except as may be required by applicable securities laws, the       
Company disclaims any intent or obligation to update any forward-looking        
statement, whether as a result of new information, future events or results or  
otherwise.  Although the Company believes that the assumptions inherent in the  
forward-looking statements are reasonable, forward-looking statements are not   
guarantees of future performance and accordingly undue reliance should not be   
put on such statements due to the inherent uncertainty therein.                 
COMPANY OVERVIEW                                                                
The Company is engaged in the acquisition and exploration of diamond properties 
in known diamond producing areas in the DRC. In June 2011, the Company effected 
a change in the name of the Company from BRC DiamondCore Ltd. to Delrand        
Resources Limited and a consolidation (the "Consolidation") of the outstanding  
common shares of the Company on a two to one basis.  The names of the Company`s 
subsidiaries in the DRC and South Africa are currently unchanged.               
For the three and six month periods ended June 30, 2011, the Company reported a 
net loss of $169,444 and $347,219 respectively (compared to a net loss of       
$98,794 and $326,625 for the three and six month periods ended June 30, 2010).  
The net asset value of the Company was $4,343,149 as at June 30, 2011 (December 
31, 2010: $3,864,432)                                                           
The Company`s accumulated deficit as at June 30, 2011 was $119,752,905 (December
31, 2010: $119,405,686).  The Company had a working capital deficit of $269,897 
as at June 30, 2011 (December 31, 2010: $1,198,181) and had a net increase in   
cash of $213,021 during the six months ended June 30, 2011.                     
While the Company`s financial statements for the first and second quarters of   
2011 have been prepared on the basis of IFRS accounting principles applicable to
a going concern, adverse conditions may cast substantial doubt upon the validity
of this assumption.  In the event the Company is unable to identify recoverable 
resources, receive the necessary permitting, or arrange appropriate financing,  
the carrying value of the Company`s assets could be subject to further material 
adjustment.  Furthermore, certain market conditions have cast significant doubt 
upon the validity of this assumption.                                           
The Company`s ability to continue operations in the normal course of business is
dependent on several factors, including its ability to secure additional        
funding.  Management has been exploring all available options to secure         
additional funding, including equity financing and strategic partnerships.  In  
addition, the recoverability of amounts shown for exploration and evaluation    
assets is dependent upon the existence of economically recoverable reserves, the
ability of the Company to obtain financing to complete the development of the   
properties where necessary, or, alternatively, upon the Company`s ability to    
recover its spent costs through a disposition of its interests, all of which are
uncertain.                                                                      
During the second quarter of 2011, the Company completed the following three    
transactions which have improved the Company`s liquidity position:              
1. In April 2011, the Company sold the containerized bulk sampling plant that   
had been constructed for the alluvial deposits on the Kwango River in southern  
DRC.  The Kwango project had previously been abandoned by the Company and the   
related licences relinquished when it was concluded that the project would not  
be economically viable.  The gross proceeds from the sale of the plant were     
US$575,000.                                                                     
2. On May 11, 2011, the Company closed a non-brokered private placement of      
7,500,000 units of the Company at a price of $0.08 per unit for proceeds to the 
Company of $600,000.  Each such unit was comprised of one common share of the   
Company and one warrant of the Company, entitling the holder to purchase one    
common share of the Company at a pre-Consolidation price of $0.11 for a period  
of three years.                                                                 
3. On May 27, 2011, the Company closed a non-brokered private placement of      
2,500,000 units of the Company at a price of $0.10 per unit for proceeds to the 
Company of $250,000.  Each such unit was comprised of one common share of the   
Company and one warrant of the Company entitling the holder to purchase one     
common share of the Company at a pre-consolidation price of $0.11 for a period  
of three years.  The purchasers of the units under this financing were directors
and officers of the Company.                                                    
DRC Projects                                                                    
DRC North Project (46 exploration permits)                                      
The previously reported Company results of the reconnaissance stream sample     
program (see the Company`s press release dated February 2, 2011), with samples  
collected on a spacing of one sample to every 26 kmSquared over the 44 Coexco   
and two Company exploration permit areas, had revealed the presence of          
kimberlitic minerals and micro diamonds.  The mineral chemistry of the          
kimberlitic minerals analysed by the Rio Tinto facilities in Perth, Australia   
was encouraging, so a follow-up program was formulated by the Company.  The     
follow-up program over the positive areas of the Coexco and Delrand permits was 
initiated by the Company in the first quarter of 2011 and is being funded by Rio
Tinto pursuant to a new joint venture arrangement with Rio Tinto (see the       
Company`s press release dated February 2, 2011).                                
The results from the initial reconnaissance stream sampling program referred to 
above comprised five ilmenites, 27 chrome-spinels (including nine diamond       
inclusion types), one eclogitic garnet, all of which proved to be kimberlitic,  
and 15 micro-diamonds. The Company selected 16 Coexco permits, all in the       
Bafwasende region of the Province Orientale in the northern DRC, as the main    
target area and started the follow-up stream sampling program in January 2011.  
The target area is dominated by almost horizontally-bedded Neoproterozoic       
Lindian Group sediments (shale, sandstone and conglomerate) overlying what has  
been referred to as the Archaean Mbomou Craton, and the whole area is covered by
a thick and mature laterite crust masking most of the rock formations of the    
area.                                                                           
During the second quarter of 2011, 90 stream samples were collected which       
completed the follow-up program over an area of 2,300 kmSquared in extent. It   
took four months for five geologists and one field officer, supported by 40     
locally hired field hands, to cover the follow-up target with 490 stream        
samples. The number of samples taken equates to one stream sample per           
4.69kmSquared compared to one sample per 26kmSquared during the reconnaissance  
phase. Each stream sample comprised of a minimum of 20 litres of minus 0.71 mm  
diameter material, compared to 30 litres of minus 0.71 mm material in the       
original reconnaissance material.  The material was classified in the field     
using minus 0.71 mm and plus 0.425 mm screens. This screened minus 0.71 mm and  
plus 0.425 mm size-fraction was hand-gravitated on site. During the second      
quarter of 2011, all samples were concentrated in Kinshasa, DRC using a         
mechanical Armstrong Jig. The concentrates of these samples were dispatched to  
the Rio Tinto heavy mineral laboratory in Perth, Australia. As of the end of the
second quarter no results had been received.                                    
Field observations classified the majority of the sample trap-sites as good.    
Whilst the reddish coloration of most concentrate is a reflection of the high   
proportion of laterite in the material washed. Field observations confirm that  
most of the area is covered by thick (more than 5 meters) and mature laterite,  
masking evidence of any primary sources that may be present and depressing the  
occurrences of kimberlitic satellite minerals such as garnet and spinel         
significantly, and to a lesser degree ilmenite. Furthermore intense artisanal   
diamond digging continues in the follow-up area and in particular along the     
Makombe, Mopamu, Aniede, Efule, Lobilo rivers and in most of their tributaries. 
Several other isolated and sporadic diggings were seen scattered within the     
project area.                                                                   
The two wholly-owned Delrand exploration permits, PR 1774 and 1775, also        
referred to as the Bomilli project and directly to the north of the Coexco      
ground, are planned to be covered by follow-up stream samples during the third  
quarter of 2011.                                                                
Tshikapa Project (9 exploration permits)                                        
During the second quarter of 2011 Delrand conducted a follow-up stream sampling 
program over the two Caspian permit areas (PR 976 and 977) in the Tshikapa area.
The permits have been reduced by 50% and now cover 164kmSquared cumulatively.   
Both permits have returned abundant kimberlitic minerals with surface textures  
that indicate the presence of proximal primary sources. Although the area has   
previously been flown with airborne magnetic surveys, it has a very busy        
magnetic background complicating the picking of kimberlite-like targets. Hence a
follow-up stream sampling program over the two properties, held pursuant to the 
agreement with Caspian Oil and Gas Ltd, was conducted by the Company and funded 
by Rio Tinto.                                                                   
The follow-up samples comprised of 20 litres of post-screened material in the   
minus 0.7mm to plus 0.425mm fractions. The material was screened and hand       
gravitated in the field and the field concentrates were further concentrated by 
the Company`s Armstrong Jig in Kinshasa, DRC. In total 40 samples were collected
over the area on a density of 1 sample per 5 kmSquared. The concentrates from   
the Armstrong jig have been sent to Rio Tinto`s heavy mineral laboratory in     
Perth, Australia for sorting and mineral chemistry. Diamonds and kimberlitic    
minerals (garnet and ilmenite) are especially abundant in three small drainage  
basins (Matshibola, Ngombe and Kamukala) much of which is being exploited by    
artisanal miners.                                                               
Security of Tenure                                                              
The Company`s diamond exploration activities in the DRC are focused on two      
areas: one in the northern DRC around Bafwasende and one in the southern part of
the country south of Tshikapa.  Exploration permits have been secured in both   
areas and are in good standing.  Two exploration permit applications are still  
at CAMI for consideration.  The Company will keep its focus on the following    
exploration permits which are held by the Company directly or by partners       
through various option agreements: Acacia (6), the Company (3), Caspian Oil &   
Gas (2) and Coexco (44).                                                        
Status of Diamond Exploration Permits of the Company and Partners in the DRC    
Company (Project)     Permit Numbers                                            
                                            No. of   KmSquared                  
                                          Permits                               
Delrand (2 DRC North, 1174, 1175, 9083       3        961                       
1 Tshikapa)                                                                     
Acacia (Tshikapa)     1175,1176,1177,1180,   6        1,053                     
                    1188, 1187                                                  
Caspian Oil and Gas   976, 977               2        164                       
(Tshikapa)                                                                      
Coexco (DRC North)    6013-6016, 6018-6036,  44       7,313                     
                    6887-6906, 6909                                             
Total                                        55       9,491                     
Iron Ore Exploration                                                            
In May 2011, the Company announced that its joint venture with Rio Tinto        
Minerals Development Limited ("Rio Tinto") has discovered high grade haematite  
(a form of iron ore) in its exploration areas within Province Orientale, DRC.   
The drilling results for 1,032 metres of diamond drill holes, which are detailed
below, revealed grades of 65.6% to 68.2% iron.  The iron ore exploration is     
being funded by Rio Tinto.                                                      
Initial geological research and exploration had indicated that the exploration  
permit areas, which hitherto had been largely unexplored using modern           
exploration methods, were highly prospective for the discovery of iron ore      
deposits.  This assessment is supported by these initial results.  First pass   
drilling has been completed on the Zatua 1 and 2 target areas with nine diamond 
drill holes totaling 1,032 meters.  Six of these holes intercepted high grade   
haematite mineralization.                                                       
The target areas had been selected after a regional airborne magnetic survey had
identified geophysical anomalies which subsequent ground follow up indicated to 
be associated with outcropping haematite mineralization.  Mineralized intervals,
where intercepted by a drill hole, range in thickness from 32 meters to 121     
meters with both friable and massive textures being observed.                   
Analytical results have been received for the first six holes with values of    
65.6%-68.2% Fe, 0.53%-2.99% Al2O3, 0.39%-2.4% SiO2 and 0.049%-0.969% P, with the
elevated high phosphorous values appearing to be associated with recent         
weathering.  Despite limited thicknesses in some of the holes, the results give 
encouragement that high-grade haematite is present in the area.                 
Rio Tinto, as the operator, intends to complete the helicopter supported        
reconnaissance over the remainder of the Bomokandi permit area.                 
QUALIFIED PERSON AND TECHNICAL REPORT                                           
Dr. Michiel C. J. de Wit, the Company`s President and a "qualified person" as   
such term is defined in National Instrument 43-101, has reviewed and approved   
the technical information in this MD&A.                                         
Additional information with respect to the Company`s Tshikapa project is        
contained in the technical report prepared by Dr. Michiel C. J. de Wit and      
Fabrice Matheys, dated March 31, 2009 and titled "National Instrument 43-101    
Technical Report on the Tshikapa Project of BRC DiamondCore Ltd. in the         
Democratic Republic of the Congo".  A copy of this report can be obtained from  
SEDAR at www.sedar.com.                                                         
RESULTS OF OPERATIONS                                                           
For the three and six month periods ended June 30, 2011, the Company reported a 
net loss of $169,444 and $347,219 respectively (or $0.00 per share for both     
periods), compared to a net loss of $98,794 and $326,625 (or $0.00 per share)   
incurred during the respective three and six month periods ended June 30, 2010. 
The increase in losses was a result of increased consulting and professional    
fees ($57,725) as well as an increase in general and administrative expenses    
($38,858).                                                                      
SUMMARY OF QUARTERLY RESULTS                                                    
The following table sets out certain unaudited consolidated financial           
information of the Company for each of the last eight quarters, beginning with  
the second quarter of 2011.  The Company`s reporting and measurement currency is
the Canadian dollar.  Only the financial information for the first and second   
quarters of 2010 and 2011 are reported in accordance with IFRS. The remaining   
quarters are reported in accordance with Canadian generally accepted accounting 
principles.                                                                     

                  2011       2011       2010      2010                          
                  2nd        1st        4th       3rd                           
                  quarter    quarter    quarter   quarter                       

Net loss ($`000)  $169       $178       $920      $260                          
Net loss per      0.00       0.00       $0.01     $0.00                         
share (basic and                                                                
diluted)                                                                        
                                                                                
                  2010       2010       2009      2009                          
                  2nd        1st        4th       3rd                           
quarter    quarter    quarter   quarter                       
                                                                                
Net loss ($`000)  $99        $227       $528      $4,879                        
Net loss per      $0.00      $0.00      $0.01                                   
share (basic and                                  $0.19                         
diluted)                                                                        
During the second quarter of 2011, the Company`s net loss decreased to $169,444 
compared to a net loss in the first quarter of $177,775.  The lower loss in the 
second quarter of 2011 was due to decreased consulting and professional fees as 
well as a foreign exchange loss of $2,243 in the first quarter (as compared to  
the $2,756 gain that occurred in the second quarter).                           
During the first quarter of 2011, the Company`s net loss decreased to $177,775  
compared to a net loss in the fourth quarter of 2010 of $920,280.  The greater  
loss in the fourth quarter of 2010 was due to an impairment loss of $740,975    
related to the discontinuation of the Lubao and Candore projects as well as a   
write off of a receivable for rental of the Kwango plant in the amount of       
$105,009.                                                                       
During the fourth quarter of 2010, the Company`s net loss increased to $920,280 
compared to a net loss of $260,133 in the third quarter of 2010.  This increase 
was primarily due to an impairment loss related to the discontinuation of the   
Lubao and Candore projects of $740,975.                                         
During the third quarter of 2010, the Company`s net loss increased to $260,133  
compared to a net loss of $98,794 in the second quarter of 2010.  This increase 
was primarily due to an increase in professional fees which related to the      
Diamond Core liquidation proceedings in South Africa. General and administrative
costs also increased in the third quarter of 2010 as a result of fees relating  
to the Company`s secondary listing on the JSE Limited in South Africa.          
During the second quarter of 2010, the Company`s net loss decreased to $98,794  
compared to a net loss of $227,831 in the first quarter of 2010.  Net loss      
recorded during the first quarter of 2010 was significantly impacted by the     
recognition of stock based compensation expense of $73,116 compared to $nil     
recorded during the second quarter of 2010. General and administrative costs    
were also lower in the second quarter of 2010 as compared to the first quarter  
of 2010.                                                                        
During the first quarter of 2010, the Company`s net loss decreased to $227,831  
compared to $528,193 in the fourth quarter of 2009, due mainly to lower         
professional fees and general and administrative costs.                         
During the fourth quarter of 2009, the Company`s net loss was $528,193 compared 
to a net loss of $4,879,248 reported during the third quarter of 2009.  The loss
in the fourth quarter of 2009 was mainly related to the loss on the disposition 
of Diamond Core Resources (Pty) Ltd (which had been the holding company for the 
Company`s South African operations).  The loss of $4,879,248 during the third   
quarter of 2009 comprised a loss of $3,143,096 attributable to discontinued     
operations and $1,736,152 attributable to continued operations (the loss per    
share was $0.12 for discontinued operations and $0.07 for continued operations).
LIQUIDITY AND CAPITAL RESOURCES                                                 
As at June 30, 2011, the Company had cash and cash equivalents of $339,952 and a
working capital deficit of $269,897, compared to cash and cash equivalents of   
$126,931 and a working capital deficit of $1,198,181 as at December 31, 2010.   
The Company has no operating revenues and is wholly reliant upon external       
financing to fund its activities.  There is no assurance that such financing    
will be available on acceptable terms, if at all.                               
Rio Tinto is currently funding the exploration at the Company`s diamond projects
in the DRC and the exploration at the DRC iron ore project.                     
In general, market conditions have limited the availability of funds.  Given the
Company`s financial position and available resources, the Company currently     
expects a need to access equity markets for financing over the next twelve      
months.  In light of current conditions, the Company has continued a series of  
measures to bring its spending in line with the projected cash flows from its   
operations in order to preserve its financial position and maintain its         
liquidity position.  Management believes that based on its current financial    
position and liquidity profile, the Company will be able to satisfy its current 
and long-term obligations.  The unaudited consolidated financial statements of  
the Company as at and for the three and six months ended June 30, 2011 have been
prepared in accordance with IFRS applicable to a going concern.                 
Contractual obligations (not on the statement of financial position) entered    
into by the Company as at June 30, 2011 and as at December 31, 2010 were nil.   
The Company has an option agreement to secure an equity interest in prospective 
ground held in six exploration permits in the DRC with ACACIA sprl, which has   
advised the Company of its wish to modify the option agreement.  The Company    
continues its discussions with ACACIA sprl and is optimistic of reaching an     
agreement that is satisfactory to both parties.                                 
The Company is in a dispute with two of its previous directors and officers.    
One of these individuals had applied in 2008 for a summary judgment against the 
Company in the Witwatersrand Local Division of the High Court of South Africa in
respect of a dispute relating to a settlement agreement pertaining to his       
departure.  The application for summary judgment was dismissed and the Company  
was granted leave to defend the claim.  This individual has not taken further   
steps to progress that matter. However, in October 2010, almost two years after 
the original claim, the same former director and officer instituted fresh       
proceedings against the Company. He has repeated the claim made previously, but 
this time in a summons lodged before the North Gauteng High Court in South      
Africa.  This former director and officer is claiming that he is owed payment of
1.2 million South African rand plus interest.  The other individual has referred
two disputes to the Commission for Conciliation Mediation and Arbitration in    
Johannesburg, South Africa and an action to the High Court in that same         
jurisdiction.  He elected to withdraw an application for summary judgment. The  
Company is defending these actions.                                             
EXPLORATION AND EVALUATION EXPENDITURES                                         
The following table provides a breakdown of the Company`s exploration and       
evaluation expenditures in the DRC for the six month period ended June 30, 2011:
                     Tshikapa   Nothern   Total                                 
DRC                                             
Balance 12/31/2010     $          $         $                                   
                     2,590,956  2,484,085 5,075,041                             
                                                                                
Opening balance                                                                 
adjustments                                                                     
IFRS adjustment -                                                               
Jan 1, 2010           8,624      8,624     17,248                               
IFRS adjustment -                                                               
Dec 31, 2010          (8,993)    (8,994)   (17,987)                             
Funds Recieved from                                                             
Rio Tinto 2010        431,355    (431,355) -                                    
Net Adjustments                                                                 
                     430,986    (431,725) (739)                                 
                                                                                
Operating expenses                                                              
Funds Recieved from                                                             
Rio Tinto             -          (304,335) (304,335)                            
Admin and office                                                                
support               14,741     207,461   222,202                              
Amortization                                                                    
                     1,730      1,731     3,461                                 
Field camps expenses                                                            
                     2,371      33,888    36,259                                
Remote Sensing                                                                  
                     -          -         -                                     
Drilling                                                                        
                     -          -         -                                     
Geology                                                                         
                     -          440       440                                   
Professional fees                                                               
                     1,953      9,174     11,127                                
Business promotion                                                              
                     -          -         -                                     
Travel & Helicopter                                                             
                     5,436      24,994    30,430                                
Stock based                                                                     
compensation          -          -         -                                    
Permits and surface                                                             
taxes                 62,132     2,618     64,750                               
Foreign exchange                                                                
                     1,163      1,163     2,326                                 
Gain on sale of                                                                 
asset                 -          (512,768) (512,768)                            
Total Operating                                                                 
Expenses              89,526     (535,634) (446,108)                            
                                                                                
                                                                                
Balance June 30,                                                                
2011                  3,111,468  1,516,727 4,628,195                            
OUTSTANDING SHARE DATA                                                          
The authorized share capital of the Company consists of an unlimited number of  
common shares.  As at August 12, 2011, the Company had outstanding 49,704,341   
common shares, stock options to purchase an aggregate of 1,110,752 common shares
of the Company and warrants to purchase an aggregate of 15,000,000 common shares
of the Company.                                                                 
RELATED PARTY TRANSACTIONS                                                      
Key Management Remuneration                                                     
The Company`s related parties include key management.  Key management includes  
executive directors and non-executive directors.  The remuneration of the key   
management of the Company as defined above, during the three and six months     
ended June 30, 2011 and 2010 was as follows:                                    
              Three months ended             Six months ended                   
              June 30, 2011   June 30, 2010  June 30, 2011   June 30, 2010      
Salaries        $   46,630      $   91,693     $  134,375      $  155,846       
               $   46,630      $   91,693     $  134,375      $  155,846        
Other Related Parties                                                           
During the three and six month periods ended June 30, 2011, legal expenses of   
$37,163 and $37,163 (three and six month periods ended June 30, 2010: $nil and  
$nil), incurred in connection with general corporate matters, were paid to a law
firm of which a director of the Company is a partner . As at June 30, 2011,     
$37,163 (December 31, 2010: $nil) owing to this legal firm was included in      
accounts payable.                                                               
As at June 30, 2011, an amount of $16,667 was owed to one director of the       
Company representing consulting fees (December 31, 2010: $102,311).  During the 
three and six month periods ended June 30, 2011, consulting fees of $25,000 and 
$50,000, respectively were incurred to the one director (three and six month    
periods ended June 30, 2010: $58,330 and $83,333 to two directors).             
As at June 30, 2011, an amount of $16,667 (December 31, 2010: nil) in the form  
of advances of short term loans to the Company was due to a company owned by a  
director of the Company.                                                        
As at June 30, 2011, an amount of $16,281 (December 31, 2010: $3,719) was owed  
to Banro Corporation ("Banro").  Banro owns 17,716,994 common shares of the     
Company, representing a 35.65% interest in the Company. During the year ended   
December 31, 2010, a drill rig was sold to Banro by the Company for gross       
proceeds of $154,964.                                                           
On May 27, 2011 the Company closed a non-brokered private placement of 2,500,000
units of the Company at a price of $0.10 per unit for proceeds of $250,000.  The
purchasers of the units under the May 27, 2011 private placement were directors 
and officers of the Company (see "Company Overview" above).                     
All amounts due to related parties are unsecured, non-interest bearing and due  
on demand. All transactions are in the normal course of operations and are      
measured at the exchange value.                                                 
NEW PRONOUNCEMENTS ADOPTED                                                      
June 30, 2011 is the Company`s second reporting period under IFRS. Accounting   
standards effective for periods beginning on January 1, 2011 have been adopted  
as part of the transition to IFRS.                                              
Transition to IFRS                                                              
IFRS 1, First Time Adoption of IFRS, requires that comparative financial        
information be provided.  As a result, the first date at which the Company has  
applied IFRS was January 1, 2010.  IFRS 1 requires first-time adopters to       
retrospectively apply all effective IFRS standards as of the reporting date,    
which for the Company will be December 31, 2011.  However, it also provides for 
certain optional exemptions and certain mandatory exceptions for first-time IFRS
adoption.  Prior to transition to IFRS, the Company prepared its financial      
statement in accordance with Canadian GAAP.                                     
In preparing the Company`s opening IFRS consolidated statements of financial    
position, the Company has adjusted amounts reported previously in the financial 
statements prepared in accordance with previous Canadian GAAP.  The IFRS 1      
applicable exemptions and exceptions applied in the conversion from Canadian    
GAAP to IFRS are as follows:                                                    
i)   Share-based payment transactions                                           
The Company has elected not to retrospectively apply IFRS 2 to equity           
instruments that were granted and that vest before the transition date.  As a   
result of applying this exemption, the Company will apply the provision of IFRS 
2 to all outstanding equity instruments that are unvested prior to the date of  
transition to IFRS.                                                             
ii)        Deemed Cost of Exploration and Evaluation Assets                     
The Company has elected not to retrospectively apply IAS 36 to the previously   
recorded impairments.  Per IFRS 1, the Company has taken an election to deem all
exploration and evaluation assets at cost.                                      
iii) Estimates                                                                  
The estimates previously made by the Company under Canadian GAAP were not       
revised for the application of IFRS except where necessary to reflect any       
difference in accounting policy or where there was objective evidence that those
estimates were in error.  As a result, the Company has not used hindsight to    
create or revise estimates.                                                     
IFRS employs a conceptual framework that is similar to Canadian GAAP.  However  
significant differences exist in certain matters of recognition, measurement and
disclosure. While the adoption has not changed the Company`s actual cash flows, 
it has resulted in changes to the Company`s consolidated statement of financial 
position and statement of comprehensive loss.  The statement of comprehensive   
loss has been changed to comply with IAS 1 Presentation of Financial Statements.
The Canadian GAAP consolidated balance sheets as at January 1, 2010 and December
31, 2010, the consolidated statements of operations and comprehensive loss for  
the three and six month periods ended June 30, 2010 as well as the consolidated 
statement of cash flows for the three and six month periods June 30, 2010 have  
been reconciled to IFRS, with a summary of the most significant changes in      
policy as follows:                                                              
Share-Based Payments                                                            
Under IFRS 2 Share-Based Payments, each tranche of an award with different      
graded vesting is accounted for as a separate award and the resulting fair value
is amortized over the vesting period of each tranche.  Under Canadian GAAP, the 
Company was accounting for these as a single award. In addition, under IFRS 2,  
the Company is required to estimate the number of forfeitures likely to occur on
grant date and reflect this in the share-based payment expense revising for     
actual experiences in subsequent periods.  Under Canadian GAAP, forfeitures were
recognized as they occurred                                                     
FUTURE ACCOUNTING STANDARDS                                                     
The Company has reviewed new and revised accounting pronouncements that have    
been issued but are not yet effective and determined that the following may have
an impact on the Company:                                                       
IFRS 9 Financial instruments ("IFRS 9") was issued by the IASB on November 12,  
2009 and will replace IAS 39 Financial Instruments: Recognition and Measurement 
("IAS 39").  IFRS 9 replaces the multiple rules in IAS 39 with a single approach
to determine whether a financial asset is measured at amortized cost or fair    
value and a new mixed measurement model for debt instruments having only two    
categories: amortized cost and fair value.  The approach in IFRS 9 is based on  
how an entity manages its financial instruments in the context of its business  
model and the contractual cash flow characteristics of the financial assets.    
The new standard also requires a single impairment method to be used, replacing 
the multiple impairment methods in IAS 39.  IFRS 9 is effective for annual      
periods beginning on or after January 1, 2013.  The Company is currently        
evaluating the impact of IFRS 9 on its consolidated financial statements.       
A revised version of IAS 24 Related party disclosures ("IAS 24") was issued by  
the IASB on November 4, 2009. IAS 24 requires entities to disclose in their     
consolidated financial statements information about transactions with related   
parties.  Generally, two parties are related to each other if one party         
controls, or significantly influences, the other party.  IAS 24 has simplified  
the definition of a related party and removed certain of the disclosures        
required by the predecessor standard.  The revised standard is effective for    
annual periods beginning on or after January 1, 2011.  The adoption of this     
issuance did not have a significant impact on the Company`s consolidated        
financial statements.                                                           
IFRS 10 Consolidated Financial Statements ("IFRS 10") establishes principles for
the presentation and preparation of consolidated financial statements when an   
entity controls one or more other entities.  IFRS 10 supersedes IAS 27          
"Consolidated and Separate Financial Statements" and SIC-12 "Consolidated -     
Special Purpose Entities" and is effective for annual periods beginning on or   
after January 1, 2013.  Earlier application is permitted.  The Company is       
currently evaluating the impact of this standard on its consolidated financial  
statements.                                                                     
IFRS 11 Joint Arrangements ("IFRS 11") establishes principles for financial     
reporting by parties to a joint arrangement. IFRS 11 supersedes the current IAS 
31 "Interests in Joint Ventures" and SIC-13 "Jointly Controlled Entities - Non- 
Monetary Contributions by Venturers" and is effective for annual periods        
beginning on or after January 1, 2013.  Earlier application is permitted.  The  
Company is currently evaluating the impact of this standard on its consolidated 
financial statements.                                                           
IFRS 12 Disclosure of Interests in Other Entities ("IFRS 12") applies to        
entities that have an interest in a subsidiary, a joint arrangement, an         
associate or an unconsolidated structured entity. IFRS 12 is effective for      
annual periods beginning on or after January 1, 2013.  Earlier application is   
permitted.  The Company is currently evaluating the impact of this standard on  
its consolidated financial statements.                                          
IFRS 13 Fair Value Measurements ("IFRS 13") defines fair value, sets out in a   
single IFRS framework for measuring fair value and requires disclosures about   
fair value measurements. IFRS 13 applies to IFRSs that require or permit fair   
value measurements or disclosures about fair value measurements (and            
measurements, such as fair value less costs to sell, based on fair value or     
disclosures about those measurements), except in specified circumstances. IFRS  
13 is to be applied for annual periods beginning on or after January 1, 2013.   
Earlier application is permitted.  The Company is currently evaluating the      
impact of this standard on its consolidated financial statements.               
IFRS 7 Financial instruments: disclosures ("IFRS 7") The Accounting Standards   
Board ("AcSB") approved the incorporation of the IASB`s amendments to IFRS 7    
Financial Instruments: Disclosures and the related amendment to IFRS 1 First-   
time Adoption of International Financial Reporting Standards into Part I of the 
Handbook.  These amendments were made to Part I in January 2011 and are         
effective for annual periods beginning on or after July 1, 2011.  Earlier       
application is permitted.  The amendments relate to required disclosures for    
transfers of financial assets to help users of the financial statements evaluate
the risk exposures relating to such transfers and the effect of those risks on  
an entity`s financial position.  The Company is currently evaluating the impact 
of IFRS 7 on its consolidated financial statements.                             
An amendment to IAS 1, Presentation of financial statements was issued by the   
IASB in June 2011. The amendment requires separate presentation for items of    
other comprehensive income that would be reclassified to profit or loss in the  
future, such as foreign currency differences on disposal of a foreign operation,
if certain conditions are met from those that would never be reclassified to    
profit or loss. The effective date is July 1, 2012 and earlier adoption is      
permitted. The Company is currently evaluating the impact of this amendment on  
its consolidated financial statements.                                          
IAS 27, Separate financial statements ("IAS 27") was re-issued by the IASB in   
May 2011 to only prescribe the accounting and disclosure requirements for       
investments in subsidiaries, joint ventures and associates when an entity       
prepares separate financial statements. The consolidation guidance will now be  
included in IFRS 10. The amendments to IAS 27 are effective for annual periods  
beginning on or after January 1, 2013. The Company is currently evaluating the  
impact of the amendments on its consolidated financial statements               
IAS 28, Investments in associates and joint ventures ("IAS 28") was re-issued by
the IASB in May 2011. IAS 28 continues to prescribe the accounting for          
investments in associates, but is now the only source of guidance describing the
application of the equity method. The amended IAS 28 will be applied by all     
entities that have an ownership interest with joint control of, or significant  
influence over, an investee. The amendments to IAS 28 are effective for annual  
periods beginning on or after January 1, 2013. The Company is currently         
evaluating the impact of the amendments on its consolidated financial           
statements.                                                                     
CRITICAL ACCOUNTING ESTIMATES                                                   
The preparation of the interim condensed consolidated financial statements in   
conformity with IFRS requires management to make judgments, estimates and       
assumptions that affect the application of accounting policies and the reported 
amounts of assets, liabilities, income and expenses.  Actual results may differ 
from these estimates.  Estimates and underlying assumptions are reviewed on an  
ongoing basis. Information about critical judgments in applying accounting      
policies that have the most significant effect on the amounts recognized in the 
interim financial statements included the following:                            
Provisions and contingencies                                                    
The amount recognized as provision, including legal, contractual and other      
exposures or obligations, is the best estimate of the consideration required to 
settle the related liability, including any related interest charges, taking    
into account the risks and uncertainties surrounding the obligation.  In        
addition, contingencies will only be resolved when one or more future events    
occur or fail to occur.  Therefore assessment of contingencies inherently       
involves the exercise of significant judgment and estimates of the outcome of   
future events.  The Company assesses its liabilities and contingencies based    
upon the best information available, relevant tax laws and other appropriate    
requirements.                                                                   
Exploration and evaluation expenditure                                          
The application of the Company`s accounting policy for exploration and          
evaluation expenditure requires judgment in determining whether it is likely    
that future economic benefits will flow to the Company, which may be based on   
assumptions about future events or circumstances.  Estimates and assumptions    
made may change if new information becomes available.  If, after expenditure is 
capitalized, information becomes available suggesting that the recovery of      
expenditure is unlikely, the amount capitalized is written off in the statement 
of comprehensive income (loss) during the period the new information becomes    
available.                                                                      
Impairment                                                                      
Assets, including property, plant and equipment and exploration and evaluation  
assets, are reviewed for impairment whenever events or changes in circumstances 
indicate that their carrying amounts exceed their recoverable amounts.  The     
assessment of the fair value often requires estimates and assumptions such as   
discount rates, exchange rates, commodity prices, rehabilitation and restoration
costs, future capital requirements and future operating performance.  Changes in
such estimates could impact recoverable values of these assets.  Estimates are  
reviewed regularly by management.                                               
Share-based payment transactions                                                
The Company measures the cost of equity-settled transactions with employees by  
reference to the fair value of the equity instruments at the date at which they 
are granted.  Estimating fair value for share-based payment transactions        
requires determining the most appropriate valuation model, which is dependent on
the terms and conditions of the grant.  This estimate also requires determining 
the most appropriate inputs to the valuation model including the expected life  
of the share option, volatility and dividend yield and making assumptions about 
them.  Under IFRS, the Company is required to estimate the number of forfeitures
likely to occur on grant date and reflect this in the share-based payment       
expense revising for actual experiences in subsequent periods.                  
The fair value at grant date is determined using a Black-Scholes option pricing 
model that takes into account the exercise price, the term of the option, the   
impact of dilution, the share price at grant date and expected price volatility 
of the underlying share, the expected dividend yield and the risk free interest 
rate for the term of the option.  Under IFRS, the Company is required to        
estimate the number of forfeitures likely to occur on grant date and reflect    
this in the share-based payment expense revising for actual experiences in      
subsequent periods.                                                             
RISKS AND UNCERTAINTIES                                                         
The Company is subject to a number of risks and uncertainties that could        
significantly impact on its operations and future prospects.  The following     
discussion pertains to certain principal risks and uncertainties but is not, by 
its nature, all inclusive.                                                      
The only sources of future funds for further exploration programs which are     
presently available to the Company are the sale of equity capital, or the       
offering by the Company of an interest in its properties to be earned by another
party carrying out further exploration.  There is no assurance that such sources
of financing will be available on acceptable terms, if at all.  In the event    
that commercial quantities of minerals are found on the Company`s properties,   
the Company does not have the financial resources at this time to bring a mine  
into production.                                                                
The current financial climate is characterized by volatile and uncertain times. 
The uncertainty of forward looking statements is therefore greater.  Diamond    
prices were reduced significantly as a result of the economic downturn and the  
recovery could be accompanied by volatility.                                    
All of the Company`s projects are located in the DRC  The assets and operations 
of the Company are therefore subject to various political, economic and other   
uncertainties, including, among other things, the risks of war and civil unrest,
hostage taking, military repression, labor unrest, illegal mining,              
expropriation, nationalization, renegotiation or nullification of existing      
licenses, permits, approvals and contracts, taxation policies, foreign exchange 
and repatriation restrictions, changing political conditions, international     
monetary fluctuations, currency controls and foreign governmental regulations   
that favor or require the awarding of contracts to local contractors or require 
foreign contractors to employ citizens of, or purchase supplies from, a         
particular jurisdiction.  Changes, if any, in mining or investment policies or  
shifts in political attitude in the DRC may adversely affect the Company`s      
operations.  Operations may be affected in varying degrees by government        
regulations with respect to, but not limited to, restrictions on production,    
price controls, export controls, currency remittance, income taxes, foreign     
investment, maintenance of claims, environmental legislation, land use, land    
claims of local people, water use and mine safety.  Failure to comply strictly  
with applicable laws, regulations and local practices relating to mineral rights
could result in loss, reduction or expropriation of entitlements.  In addition, 
in the event of a dispute arising from operations in the DRC, the Company may be
subject to the exclusive jurisdiction of foreign courts or may not be successful
in subjecting foreign persons to the jurisdiction of courts in Canada.  The     
Company also may be hindered or prevented from enforcing its rights with respect
to a governmental instrumentality because of the doctrine of sovereign immunity.
It is not possible for the Company to accurately predict such developments or   
changes in laws or policy or to what extent any such developments or changes may
have a material adverse effect on the Company`s operations.                     
The DRC is a developing nation emerging from a period of civil war and conflict.
Physical and institutional infrastructure throughout the DRC is in a debilitated
condition.  The DRC is in transition from a largely state controlled economy to 
one based on free market principles, and from a non-democratic political system 
with a centralized ethnic power base, to one based on more democratic           
principles.  There can be no assurance that these changes will be effected or   
that the achievement of these objectives will not have material adverse         
consequences for the Company and its operations.  The DRC continues to          
experience violence and significant instability in parts of the country due to  
certain militia and criminal elements.  While the government and United Nations 
forces are working to support the extension of central government authority     
throughout the country, there can be no assurance that such efforts will be     
successful.                                                                     
All of the Company`s properties are in the exploration stage only and none of   
the properties contain a known body of commercial ore.  The Company currently   
operates at a loss and does not generate any revenue from operations.  The      
exploration and development of mineral deposits involve significant financial   
risks over a significant period of time which even a combination of careful     
evaluation, experience and knowledge may not eliminate.  Few properties which   
are explored are ultimately developed into producing mines.  Major expenditures 
may be required to establish reserves by drilling and to construct mining and   
processing facilities at a site.  It is impossible to ensure that the Company`s 
exploration programs will result in a profitable commercial mining operation.   
The Company is exposed to currency risk as its principal business is conducted  
in foreign currencies.  Unfavorable changes in the applicable exchange rate may 
result in a decrease or increase in foreign exchange gains or losses.  The      
Company does not use derivative instruments to reduce its exposure to foreign   
currency risk.                                                                  
The Company`s exploration and, if such exploration is successful, development of
its properties is subject to all of the hazards and risks normally incident to  
mineral exploration and development, any of which could result in damage to life
or property, environmental damage and possible legal liability for any or all   
damage.                                                                         
The natural resource industry is intensely competitive in all of its phases, and
the Company competes with many companies possessing greater financial resources 
and technical facilities than itself.                                           
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES                               
a)Fair value of financial assets and liabilities                                
The consolidated statements of financial position carrying amounts for cash and 
cash equivalents, prepaid expenses and other assets, accounts payable and       
accrued liabilities and notes payable approximate their fair value due to their 
short-term nature.  Due to the use of subjective judgments and uncertainties in 
the determination of fair values these values should not be interpreted as being
realizable in an immediate settlement of the financial instruments.             
The following presents the fair value and carrying value of the Company`s       
financial instruments:                                                          
                Classification  Measurement 30-Jun-   31-Dec-                   
11        10                        
                                                                                
   Financial                                                                    
assets                                                                          
Held-for-       Fair value  $339,952  $126,931                  
Cash and cash    Trading                                                        
equivalents                                                                     
                                                                                
Amortized                                       
Prepaid expenses  Loans and      cost                                           
and other assets receivables                                                    
                                            34,410    21,713                    

     Financial                                                                  
liabilities                                                                     
                                                                                
Accounts payable                                                                
and accrued                                                                     
                Other           Amortized   $594,645  $834,176                  
liabilities      liabilities     cost                                           
Notes  Other           Amortized             400,493                   
payable          liabilities     cost        -                                  
         Taxes  Other           Amortized             6,127                     
payable          liabilities     cost        -                                  
Due to Other           Amortized   49,614    106,029                   
related parties  liabilities     cost                                           
Fair value hierarchy                                                            
The following table provides an analysis of financial instruments that are      
measured subsequent to initial recognition at fair value, grouped into Levels 1 
to 3 based on the degree to which the fair value is observable:                 
-    Level 1 fair value measurements are those derived from quoted prices       
    (unadjusted) in active markets for identical assets or liabilities;         
-    Level 2 fair value measurements are those derived from inputs other than   
    quoted prices included within Level 1 that are observable for the asset or  
    liability, either directly (i.e. as prices) or indirectly (i.e. derived     
    from prices); and                                                           
-    Level 3 fair value measurements are those derived from valuation techniques
    that include inputs for the asset or liability that are not based on        
    observable market data (unobservable inputs).                               
There were no transfers between Level 1 and 2 during the reporting period. The  
fair values of financial assets and liabilities carried at amortized cost are   
approximated by their carrying values.  Cash is ranked Level 1 as the market    
value is readily observable. The carrying value of cash approximates fair value 
as maturities are less than three months.  Notes payable is ranked Level 2 as it
is based on similar loans in the market.                                        
b)   Risk Management Policies                                                   
The Company is sensitive to changes in commodity prices and foreign-exchange.   
The Company`s Board of Directors has overall responsibility for the             
establishment and oversight of the Company`s risk management framework. Although
the Company has the ability to address its price-related exposures through the  
use of options, futures and forward contacts, it does not generally enter into  
such arrangements.                                                              
c)   Foreign Currency Risk                                                      
Foreign currency risk is the risk that a variation in exchange rates between the
Canadian dollar and United States dollar or other foreign currencies will affect
the Company`s operations and financial results. A portion of the Company`s      
transactions are denominated in United States dollars, Congolese francs and     
South African rand. The Company is also exposed to the impact of currency       
fluctuations on its monetary assets and liabilities.  The Company`s functional  
currency is the Canadian dollar. The majority of major expenditures are         
transacted in US dollars.  The Company maintains the majority of its cash in    
Canadian dollars but it does hold balances in US dollars.  Significant foreign  
exchange gains or losses are reflected as a separate component of the           
consolidated statement of comprehensive loss. The Company does not use          
derivative instruments to reduce its exposure to foreign currency risk.         
d)   Credit Risk                                                                
Financial instruments which are potentially subject to credit risk for the      
Company consist primarily of cash. Cash is maintained with several financial    
institutions of reputable credit in Canada, the DRC and South Africa and may be 
redeemed upon demand.  It is therefore the Company`s opinion that such credit   
risk is subject to normal industry risks and is considered minimal.             
e)   Liquidity Risk                                                             
Liquidity risk is the risk that the Company will not be able to meet its        
financial obligations as they become due. The Company attempts to ensure that   
there is sufficient cash to meet its liabilities when they are due and manages  
this risk by regularly evaluating its liquid financial resources to fund current
and long-term obligations and to meet its capital commitments in a cost-        
effective manner. The key to success in managing liquidity is the degree of     
certainty in the cash flow projections. If future cash flows are fairly         
uncertain, the liquidity risk increases. The Company`s liquidity requirements   
are met through a variety of sources, including cash and cash equivalents,      
existing credit facilities and equity capital markets.  In light of market      
conditions, the Company initiated a series of measures to bring its spending in 
line with the projected cash flows from its operations and available project    
specific facilities in order to preserve its financial position and maintain its
liquidity position.                                                             
f)   Mineral Property Risk                                                      
The Company`s operations in the DRC are exposed to various levels of political  
risk and uncertainties, including political and economic instability, government
regulations relating to exploration and mining, military repression and civil   
disorder, all or any of which may have a material adverse impact on the         
Company`s activities or may result in impairment in or loss of part or all of   
the Company`s assets.                                                           
g)   Market Risk                                                                
Market risk is the potential for financial loss from adverse changes in         
underlying market factors, including foreign-exchange rates, commodity prices,  
interest rates and stock based compensation costs.  The Company manages the     
market risk associated with commodity prices by establishing and monitoring     
parameters that limit the types and degree of market risk that may be           
undertaken.                                                                     
h)Interest rate risk                                                            
Interest rate risk is the potential impact on any Company earnings due to       
changes in bank lending rates and short term deposit rates. The Company is not  
exposed to significant interest rate risk other than cash flow interest rate    
risk on its cash. The Company does not use derivative instruments to reduce its 
exposure to interest rate risk. A fluctuation of interest rates of 1% would not 
affect significantly the fair value of cash.                                    
i)   Title risk                                                                 
Title to mineral properties 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 conveyancing       
history characteristic of many mining properties.  Although the Company has     
investigated title to all of its mineral properties for which it holds          
concessions or other mineral licenses, the Company cannot give any assurance    
that title to such properties will not be challenged or impugned and cannot be  
certain that it will have valid title to its mineral properties.  The Company   
relies on title opinions by legal counsel who base such opinions on the laws of 
countries in which the Company operates.                                        
j)   Country risk                                                               
The DRC is a developing country and as such, the Company`s exploration projects 
in the DRC could be adversely affected by uncertain political or economic       
environments, war, civil or other disturbances, a changing fiscal regime and by 
DRC`s underdeveloped industrial and economic infrastructure.                    
The Company`s operations in the DRC may be affected by economic pressures on the
DRC. Any changes to regulations or shifts in political attitudes are beyond the 
control of the Company and may adversely affect its business. Operations may be 
affected in varying degrees by factors such as DRC government regulations with  
respect to foreign currency conversion, production, price controls, export      
controls, income taxes or reinvestment credits, expropriation of property,      
environmental legislation, land use, water use and mine safety.                 
There can be no assurance that policies towards foreign investment and profit   
repatriation will continue or that a change in economic conditions will not     
result in a change in the policies of the DRC government or the imposition of   
more stringent foreign investment restrictions. Such changes cannot be          
accurately predicted.                                                           
k)   Capital Management                                                         
The Company manages its cash, common shares, warrants and stock options as      
capital. The Company`s main objectives when managing its capital are:           
-    to maintain a flexible capital structure which optimizes the cost of       
    capital at an acceptable level of risk while providing  an appropriate      
return to its shareholders;                                                 
-    to maintain a strong capital base so as to maintain investor, creditor and 
    market confidence and to sustain future development of the business;        
-    to safeguard the Company`s ability to obtain financing; and                
-    to maintain financial flexibility in order to have access to capital in the
    event of future acquisitions.                                               
The Company manages its capital structure and makes adjustments to it in        
accordance with the objectives stated above, as well as responds to changes in  
economic conditions and the risk characteristics of the underlying assets.      
There were no significant changes to the Company`s approach to capital          
management during the period ended June 30, 2011.                               
Neither the Company nor any of its subsidiaries are subject to externally       
imposed capital requirements.                                                   
               June 30, 2011      December 31, 2010                             
Cash and cash    $                  $         126,931                           
equivalents     339,952                                                         
Share capital    $                  $   115,457,876                             
               116,283,812                                                      
Deficit          $                  $  (119,405,686)                            
               (119,752,905)                                                    
18 August 2011                                                                  
Sponsor                                                                         
Arcay Moela Sponsors (Proprietary) Limited                                      
Date: 18/08/2011 17:45:03 Supplied by www.sharenet.co.za                     
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