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Drn - Delrand Resources Limited - Management`s Discussion And Analysis Of

Release Date: 18/11/2011 10:39:26      Code(s): DRN
DRN - Delrand Resources Limited - Management`s discussion and analysis of       
financial condition and results of operations for the three and nine month      
periods ended September 30, 2011                                                
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 FOR THE THREE AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011        
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 nine month periods ended September 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 November 14, 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 nine month periods ended September 30, 2011, the Company      
reported a net loss of $69,212 and $416,431 respectively (compared to a net loss
of $260,133 and $586,758 for the respective three and nine month periods ended  
September 30, 2010).  The net asset value of the Company was $4,273,937 as at   
September 30, 2011 (December 31, 2010: $3,864,432)                              
The Company`s accumulated deficit as at September 30, 2011 was $119,822,117     
(December 31, 2010: $119,405,686).  The Company had a working capital deficit of
$364,232 as at September 30, 2011 (December 31, 2010: $1,198,181) and had a net 
increase in cash of $94,643 during the nine months ended September 30, 2011.    
While the Company`s financial statements for the first, second and third        
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 first nine months of 2011, the Company completed the following three 
transactions which have impacted 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 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 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.                                      
The information in items 2 and 3 above has not been adjusted to reflect the     
Consolidation.                                                                  
DRC Projects                                                                    
DRC North Project (46 exploration permits)                                      
The previously reported Company results of the reconnaissance stream samples    
(see the Company`s press release dated February 2, 2011), collected 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 was completed during  
the second quarter of 2011. This program was 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. On the basis of these results the Company selected 16    
Coexco and two Company permits, all in the Bafwasende region of the Province    
Orientale in the northern DRC, as the main target area for the follow-up program
referred to above.                                                              
The target area comprises Neoproterozoic Lindian Group sediments (shale,        
sandstone and conglomerate) overlying what has been referred to as the Archaean 
Mbomou Craton.                                                                  
As of the end of the third quarter of 2011, only some of the visual results from
the follow up progam have been received. The remainder is scheduled to be       
completed by the last quarter of 2011. So far a number of micro-diamonds and    
kimberlitic minerals have been recovered, roughly in the same areas that had    
been highlighted by the reconnaissance program. Many of the garnets show        
intensive etching due to their residence in the lateritic environment. Several  
of the samples that have been observed contain ilmenites with leucoxene-        
pervoskite mantles, which is an important indicator of their proximity to a     
primary source, and is therefore potentially significant                        
The reddish coloration of most concentrate is a reflection of the high          
proportion of laterite in the washed material. 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 due to chemically weathering of in
particular the garnets and chrome-diopsides. Furthermore, intense artisanal     
diamond digging continues in the follow-up area.                                
The two wholly-owned Delrand exploration permits, PR 1774 and 1775, also        
referred to as the Bomilli project and covering ground directly to the north of 
the Coexco ground, were covered during the third quarter of 2011 with follow-up 
stream samples. In total, 97 stream samples were collected which completed the  
follow-up program over an area of 400 kmSquared in extent. The number of samples
taken equates to one stream sample per 4.1kmSquared compared to one sample per  
26kmSquared during the reconnaissance phase. Each stream sample was 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 0.43 mm screens. This  
screened minus 0.71 mm and plus 0.43 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. No results are available at present.                                 
Tshikapa Project (9 exploration permits)                                        
The stream samples that were collected over the two Caspian permit areas (PR 976
and 977) in the Tshikapa area by Delrand, and which was funded by Rio Tinto, are
still awaiting treatment in the Rio Tinto Laboratory in Perth, Australia. It is 
hoped to have the visual results reported on by the end of this year or early   
2012. Delrand collected these follow-up stream samples during the second quarter
of this year. The permits now cover 164kmSquared cumulatively. Both permits have
returned abundant kimberlitic minerals during the reconnaissance stage with     
surface textures that indicate the presence of proximal primary sources. The    
area has previously been flown with airborne magnetic surveys, but the busy     
magnetic background has complicated the picking of kimberlite-like targets.     
Hence a follow-up stream sampling program over the two properties, held pursuant
to an 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 0.43 mm 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 one 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.               
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 Ltd. (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, 1       1774, 1775, 9083            3         961         
Tshikapa)                                                                       
Acacia (Tshikapa)             1175,1176,1177,1180, 1188,  6         1,053       
                            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 the discovery of high grade haematite (a form
of iron ore) in its exploration areas within Province Orientale, DRC, through   
its joint venture with Rio Tinto Minerals Development Limited ("Rio Tinto").    
Additional iron ore results were announced by the Company in November 2011. The 
drilling results for 1,117 metres of diamond drill holes, which are detailed    
below, revealed average grades from the mineralized intercepts ranging from     
62.5% to 68.5% 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 drill results.  Mapping
and first pass drilling has been completed on the Zatua 01 and 02 target areas  
with 11 diamond drill holes, one of which had to be abandoned, totaling 1,117   
meters.  Seven of these holes intercepted high grade haematite mineralization.  
The mineralized package was not present to the remaining holes despite their    
central location.                                                               
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 37 meters to 121     
meters with both friable and massive textures being observed.                   
Analytical results have been received for all the seven holes with values of    
62.5%-68.5% for Fe; 0.56% to 4.78% for Al2O3; 0.48% to 6.36% for SiO2 and 0.040%
to 0.148% for 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 nine month periods ended September 30, 2011, the Company      
reported a net loss of $69,212 and $416,431 respectively (or $0.00 and $0.01 per
share for the three and nine month periods respectively), compared to a net loss
of $260,133 and $586,758 (or $0.00 and $0.01 per share) incurred during the     
respective three and nine month periods ended September 30, 2010.               
The decrease in losses was a result of decreased consulting and professional    
fees ($102,169), decreased share-based payment expense ($73,116) as well as a   
foreign exchange gain ($10,991).                                                
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 third quarter of 2011.  The Company`s reporting and measurement currency is 
the Canadian dollar. The financial information for the first, second and third  
quarters of 2010 and 2011 are reported in accordance with IFRS. The remaining   
quarters are reported in accordance with Canadian generally accepted accounting 
principles ("GAAP").                                                            

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

Net loss ($`000)  $69        $169       $178      $920                          
Net loss per      0.00       0.00       0.00      $0.01                         
share (basic and                                                                
diluted)                                                                        
                                                                                
                  2010       2010       2010      2009                          
                  3rd        2nd        1st       4th                           
quarter    quarter    quarter   quarter                       
                                                                                
Net loss ($`000)  $260       $99        $228      $528                          
Net loss per      $0.00      $0.00      $0.00     $0.01                         
share (basic and                                                                
diluted)                                                                        
During the third quarter of 2011, the Company`s net loss decreased to $69,212   
compared to a net loss in the second quarter of 2011 of $169,444.  The lower    
loss in the third quarter of 2011 was due to decreased consulting and           
professional fees as well as a foreign exchange gain of $10,478 in the third    
quarter (as compared to the $2,756 gain that occurred in the second quarter).   
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.                         
LIQUIDITY AND CAPITAL RESOURCES                                                 
As at September 30, 2011, the Company had cash and cash equivalents of $221,574 
and a working capital deficit of $364,232, 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 interim condensed consolidated        
financial statements of the Company as at and for the three and nine months     
ended September 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 September 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 nine month period ended September 30,
2011:                                                                           
                     Tshikapa         Nothern DRC           Total               
Balance 12/31/2010     $                $        2,484,085    $                 
                    2,590,956                             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 Received from                                                             
Rio Tinto             -                (341,110)             (341,110)          
Admin and office                                                                
support               23,496           235,921               259,417            
Amortization                                                                    
1,986            1,987                 3,973                
Field camps expenses                                                            
                    5,987            35,866                41,853               
Remote Sensing                                                                  
-                -                     -                    
Drilling                                                                        
                    -                -                     -                    
Geology                                                                         
-                440                   440                  
Professional fees                                                               
                    1,955            9,183                 11,138               
Business promotion                                                              
-                -                     -                    
Travel & Helicopter                                                             
                    5,535            37,387                42,922               
Stock based comp                                                                
-                -                     -                    
Permits and surface                                                             
taxes                 62,196           2,621                 64,817             
Foreign exchange                                                                
23,430           23,430                46,860               
Gain on sale of asset                                               (550,783)   
                    -                (550,783)                                  
Total Operating                                                     (420,473)   
Expenses              124,585          (545,058)                                
                                                                                
                                                                                
Balance September 30, 3,146,527        1,507,302             4,653,829          
2011                                                                            
OUTSTANDING SHARE DATA                                                          
The authorized share capital of the Company consists of an unlimited number of  
common shares.  As at November 14, 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 nine months    
ended September 30, 2011 and 2010 was as follows:                               
Three month period       Nine month period ending                               
ending                                                                          
September 30,     September 30,        September 30,        September 30,       
2011              2010                 2011                 2010                
$ 153,675         $ 114,240            $ 200,305            $ 205,933           
$ 153,675         $ 114,240            $ 200,305            $ 205,933           
b)   Other Related Parties                                                      
During the three and nine month periods ended September 30, 2011, legal expenses
of $8,610 and $29,739 (three and nine month periods ended September 30, 2010:   
$14,808 and $95,176), incurred in connection with general corporate matters,    
were paid to a law firm of which a director and officer of the Company was a    
partner until February 2011. As at September 30, 2011, $54,380 (December 31,    
2010 - $90,778) owing to this legal firm was included in accounts payable.      
As at September 30, 2011, an amount of $83,334 was owed to two directors of the 
Company representing consulting fees (December 31, 2010: $102,311).  During the 
three and nine month periods ended September 30, 2011, consulting fees of       
$50,000 and $150,000, respectively, were incurred to the two directors (three   
and nine month periods ended September 30, 2010: $50,000 and $150,000           
respectively to the two directors).                                             
As at September 30, 2011, an amount of $11,660 (December 31, 2010: $3,719) was  
owed to Banro Corporation ("Banro").  During the three and nine months ended    
September 30, 2011, common expenses in the DRC were incurred in the amounts of  
$nil and $7,941.  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 this 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                                                      
September 30, 2011 is the Company`s third 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 nine month periods ended September 30, 2010 as well as the consolidated 
    statement of cash flows for the three and nine month periods September 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 Company`s 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 stock option, volatility and dividend yield and making assumptions about 
them.                                                                           
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                               
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-Sep-11    31-Dec-10    

Financial assets                                                                
                                                                                
Cash and cash        Held-for-Trading   Fair value      $221,574    $126,931    
equivalents                                                                     
                                                                                
          Prepaid   Loans and          Amortized cost                           
expenses and other   receivables                                                
assets                                                                          
                                                      34,333       21,713       
                                                                                
Financial                                                                       
liabilities                                                                     
                                                                                
Accounts payable and Other liabilities  Amortized cost $            $           
accrued                                                525,145      834,176     
liabilities                                                                     
Notes payable        Other liabilities  Amortized cost              400,493     
                                                      -                         
Taxes payable        Other liabilities  Amortized cost              6,127       
-                         
Due to related       Other liabilities  Amortized cost 94,994       106,029     
parties                                                                         
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.      
    Different portions 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 nine month period ended September 30, 2011.               
Neither the Company nor any of its subsidiaries are subject to externally       
imposed capital requirements.                                                   
                  September 30,                  December 31, 2010              
                 2011                                                           
Cash and cash       $                              $                            
equivalents        221,574                        126,931                       
Share capital       $            116,283,812       $                            
                                                115,457,876                     
Deficit             $         (119,822,117)        $                            
(119,405,686)                   
Date: 18/11/2011 10:39:23 Supplied by www.sharenet.co.za                     
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