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

Release Date: 08/05/2012 17:08:02      Code(s): DRN
DRN - Delrand Resources Limited - Management`s discussion and analysis of       
financial condition and results of operations for the year ended December 31,   
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 YEAR ENDED DECEMBER 31, 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") issued by the         
International Accounting Standards Board.  This MD&A should be read in          
conjunction with the audited consolidated financial statements of the Company   
as at and for the financial year end December 31, 2011 (the "Annual Financial   
Statements") as well as the notes thereto. All amounts are expressed in         
Canadian dollars unless otherwise stated.                                       
This MD&A is dated March 30, 2012.  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      
Consolidation has been reflected retrospectively to all periods presented.      
The names of the Company`s subsidiaries in the DRC and South Africa are         
currently unchanged.                                                            
For the year ended December 31, 2011, the Company reported a net loss of        
$123,314 (December 31, 2010: $1,507,255).  The net asset value of the Company   
was $4,567,793 as at December 31, 2011 (December 31, 2010: $3,865,171)          
The Company`s accumulated deficit as at December 31, 2011 was $119,531,417      
(December 31, 2010: $119,408,103).  The Company had a working capital deficit   
of $533,191 as at December 31, 2011 (December 31, 2010: $1,198,181) and had a   
net decrease in cash of $38,863 during 2011 (2010: decrease of $537,564).       
While the Company`s financial statements 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, the volatile global economic environment and its impact on         
certain market conditions may 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 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, with the assets fully written down, 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 $550,977            
(US$575,000). The proceeds were a gain on sale, recognized in the statement     
of comprehensive loss.                                                          
2. On May 11, 2011, the Company closed a non-brokered private placement of      
3,750,000 units of the Company at a price of $0.16 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 $0.22 for a period of three       
years.                                                                          
3. On May 27, 2011, the Company closed a non-brokered private placement of      
1,250,000 units of the Company at a price of $0.20 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 $0.22 for a period of three       
years.  The purchasers of the units under this financing were directors and     
officers of the Company.                                                        
DRC PROJECTS                                                                    
The Company`s present operations consist of the exploration and evaluation of   
several mineral properties for diamonds in the DRC.  During 2011, the           
Company`s exploration programs in the DRC although reduced, have focused on     
the Caspian permit areas in the Tshikapa area in the southern DRC and on the    
Coexco and Bomili permit areas in the Bafwasende region in the northern DRC.    
Northern DRC Project (46 exploration permits)                                   
Results from the reconnaissance stream samples, which were collected over the   
44 Coexco and two Delrand exploration permit areas on a spacing of one sample   
to every 20 to 25 kmSquared in 2009, received from Rio Tinto`s heavy mineral    
laboratory in Perth (Australia) reported 5 ilmenites, 27 chrome spinels, 1      
eclogitic garnet and 15 micro-diamonds. The Coexco ground was under `force      
majeur` due to security issues since 2009 but the area was cleared of any       
security risks at the end of 2010 and Coexco had the `force majeur` order       
lifted early in 2011. The follow-up program over the positive areas was         
restricted to 16 Coexco and the 2 Delrand exploration permit areas and the      
sampling program was initiated in the first quarter of 2011. In total 490 and   
97 follow-up stream samples were collected on a sample density of 1 in          
4.7kmSquared and 1 in 4.1kmSquared over the Coexco and Delrand permit areas     
respectively. All samples were concentrated by the Company`s mechanical jig     
in Kinshasa, DRC before being consigned to Rio Tinto`s heavy mineral            
laboratory in Perth. The results of these follow-up samples are scheduled to    
be completed during the first quarter of 2012.                                  
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 Mbomou Craton and which is of Archaean age. The     
entire area is covered by a thick and mature laterite crust masking most of     
the rock formations of the area. The laterites are prone to depress the         
occurrences of kimberlitic satellite minerals significantly particular such     
minerals as garnet and spinel, and to a lesser degree ilmenite. Artisanal       
diamond diggings were observed among others in and along the Makombe, Mopamu,   
Aniede, Efule and Lobilo Rivers and its tributaries, all within the target      
area. Several other isolated and sporadic diggings were seen scattered within   
the project area.                                                               
Tshikapa Project (9 exploration permits)                                        
Detailed stream sampling was conducted over the Caspian Oil & Gas exploration   
permit areas (exploration permit numbers 976 and 977) during the second         
quarter of 2012. The permits have been reduced by 50% as per the applicable     
DRC mining law requirements and now measure 178kmSquared. In total 40 samples   
were collected over the area on a density of 1 sample per 4.5kmSquared. The     
screened stream samples were concentrated using the Company`s mechanical jig    
in Kinshasa, DRC before being dispatched to Rio Tinto`s heavy mineral sorting   
laboratory in Perth (Australia) for sorting and the positive grains for         
microprobe analysis. Diamonds and kimberlitic minerals (garnet and ilmenite)    
are especially visible and abundant in samples from three small drainage        
basins (Matshibola, Ngombe and Kamukala), much of which are being exploited     
by artisanal miners for macro diamonds. No results have been received to        
date.                                                                           
Security of Tenure                                                              
The exploration program in the DRC is focussed 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.  Delrand will keep its focus on the following exploration    
permits which are held by Delrand directly or by partners through various       
option agreements: Acacia (6), Delrand (3), Coexco (44) and Caspian Oil & Gas   
(2).                                                                            
Status of Exploration Permits of BRC and Partners in the DRC as of December     
31, 2011                                                                        
Company (Project)     PR Numbers           Permits at Q4 2011                   
Permits   KmSquared                   
Delrand (2 DRC North, 1174, 1175, 9083     3         1,166                      
1 Tshikapa)                                                                     
Acacia (Tshikapa)     1175,1176,1177,1180, 6         1,055                      
1188, 1187                                                  
Caspian Oil & Gas     976, 977             2         178                        
(Tshikapa)                                                                      
Coexco                6013-6016, 6018-     44        7,313                      
6036, 6887-6906,                                            
                    6909                                                        
Total                                      55        9,712                      
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 in 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 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                                                           
The Company transitioned to IFRS during fiscal 2011 and restated fiscal 2010    
to comply with IFRS. Details of this transition are in the "New                 
Pronouncements Adopted" section below.                                          
For the year ended December 31, 2011, the Company reported a net loss of        
$123,314 ($0.00 per share), compared to a net loss of $1,507,255 (or loss of    
$0.03 per share) incurred during the year ended December 31, 2010. The          
decrease in losses was a result of a decrease in consulting and professional    
fees of $138,973, a decrease in share-based payment expense of $29,333 and a    
foreign exchange gain of $8,323 (December 31, 2010: foreign exchange loss of    
$3,356).                                                                        
Additional reasons for the significant decrease in the loss in 2011 as          
compared to 2010 were the following: a 2010 bad debt expense of $105,009        
which was due to the write off of a receivable for the rental of the Kwango     
plant; the impairment in 2010 of the Lubao and Candore projects that were       
discontinued during 2010 for $740,975; and a gain in 2011 due to a disposal     
of property plant and equipment of $430,085.                                    
SELECTED ANNUAL INFORMATION                                                     
The following financial data is derived from the Company`s consolidated         
financial statements for each of the three most recently completed financial    
years.  Fiscal years 2011 and 2010 have been prepared in accordance with IFRS   
as issued by the International Accounting Standards Board ("IASB"). Fiscal      
2009 information has not been restated to conform to IFRS and is presented in   
accordance with Canadian generally accepted accounting principles ("Canadian    
GAAP"). The Company`s reporting and measurement currency is the Canadian        
dollar.                                                                         
                        2011      2010          2009                            
Net loss               $123,314  $1,507,255    $8,951,614                      
                                                (1)                             
 Net loss per share       $0.00     $0.03       $0.27                           
 Mineral properties     -         -             $5,808,835                      
and deferred                                                                   
 exploration and                                                                
 expenditures                                                                   
 Exploration and        $5,121,4  $5,075,041    -                               
evaluation             86                                                      
 Total assets           $5,274,0  $5,227,785    $6,778,299                      
                        41                                                      
(1)  This figure includes the loss from discontinued operations of $7,296,948   
relating to the disposal by the Company of Diamond Core Resources (Pty)     
    Ltd ("Diamond Core"), which was the holding company for the Company`s       
    former South African operations.  The net loss from continuing              
    operations for 2009 was $1,654,666, and the net loss per share from         
continuing operations for 2009 was $0.05.                                   
The Company`s net loss for 2011 was $1,383,941 lower than the loss recorded     
in 2010. In 2011 the Company had a gain on disposal of property plant and       
equipment for $430,085 and in 2010 the Company had an impairment of             
exploration and evaluation assets of $740,975. The Company`s net loss for       
2010 was significantly less than the loss recorded in 2009.  In 2009, the       
Diamond Core operations were sold and a loss from discontinued operations of    
$7,296,948 was recorded.                                                        
SUMMARY OF QUARTERLY RESULTS                                                    
The following table sets out certain consolidated financial information of      
the Company for each of the last eight quarters, beginning with the fourth      
quarter of 2011.  The Company`s reporting and measurement currency is the       
Canadian dollar. The financial information is reported in accordance with       
IFRS.                                                                           
                                                                                
                  2011       2011       2011      2011                          
4th        3rd        2nd       1st                           
                  quarter    quarter    quarter   quarter                       
                                                                                
Net income        $293       $(69)      $(169)    $(178)                        
(loss) ($`000)                                                                  
Net loss per      0.00       0.00       0.00      0.00                          
share (basic and                                                                
diluted)                                                                        

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

Net loss ($`000)  $(920)     $(260)     $(99)     $(228)                        
Net loss per      $0.01      $0.01      $0.00     $0.01                         
share (basic and                                                                
diluted)                                                                        
During the fourth quarter of 2011, the Company recorded net income of           
$293,117 compared to a net loss in the third quarter of 2011 of $69,212.  The   
income in the fourth quarter of 2011 was due to a gain on disposal of           
property, plant and equipment of $430,085.                                      
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.                                                                
LIQUIDITY AND CAPITAL RESOURCES                                                 
As at December 31, 2011, the Company had cash of $88,068 and a working          
capital deficit of $533,191 compared to cash 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.            
During the second quarter of 2011, the Company completed the following two      
financing transactions which positively impacted the Company`s liquidity        
position:                                                                       
1. On May 11, 2011, the Company closed a non-brokered private placement of      
3,750,000 units of the Company at a price of $0.16 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 $0.22 for a period of three       
years.                                                                          
2. On May 27, 2011, the Company closed a non-brokered private placement of      
1,250,000 units of the Company at a price of $0.20 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 $0.22 for a period of three       
years.  The purchasers of the units under this financing were directors and     
officers of the Company.                                                        
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 order to fund its corporate overhead.  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 audited consolidated financial statements of the         
Company as at and for the year ended December 31, 2011 have been prepared in    
accordance with IFRS applicable to a going concern.                             
As at December 31, 2011 and December 31, 2010, there were no contractual        
obligations (that are not on the statement of financial position) entered       
into by the Company.                                                            
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          
believes it can reach 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    
trial date for this matter has been set down for September 10, 2012.  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 year ended December 31, 2011:        
Tshikapa    Northern   Total                              
                                  DRC                                           
Balance 12/31/2010     $           $           $                                
                      2,590,956   2,484,085  5,075,041                          

Opening balance                                                                 
adjustments                                                                     
IFRS adjustment - Jan                                                           
1, 2010                8,960       8,960      17,920                            
IFRS adjustment - Dec                           (17,920)                        
31, 2010               (8,960)     (8,960)                                      
Net Adjustments                                                                 
-           -          -                                  
                                                                                
Operating expenses                                                              
Funds Received from                (367,256)   (367,256)                        
Rio Tinto           -                                                           
Admin and office                              291,595                           
support             23,761         267,834                                      
                                                                                
Amortization        2,050          2,051      4,101                             
                                  37,726                                        
Field camps         6,054                     43,780                            
expenses                                                                        
-                                                
Geology                            445        445                               
                                                                                
Professional fees   3,461          9,286      12,747                            
54,734                         
Travel              5,597          49,137                                       
                          62,897                                                
Permits and surface                22,534     85,431                            
taxes                                                                           
                                                                                
Foreign exchange    4,926          4,926      9,852                             
                                  -                                             
Gain on sale of asset  (88,984)               (88,984)                          
Total Operating                                                                 
Expenses               19,762      26,683     46,445                            
Balance December 31,                                                            
2011                   2,610,718   2,510,768  5,121,486                         
OUTSTANDING SHARE DATA                                                          
The authorized share capital of the Company consists of an unlimited number     
of common shares.  As at March 30, 2012, the Company had outstanding            
49,704,341 common shares, stock options to purchase an aggregate of 1,061,771   
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 directors (executive and non-executive), the President and the Vice    
President, Finance.  The remuneration of the key management of the Company as   
defined above, during the years ended December 31, 2011 and 2010 was as         
follows:                                                                        
             Years ended                                                        
             December 31,    December 31,                                       
2011            2010                                               
Salaries       $   270,310     $   301,907                                      
Other Related Parties                                                           
During the year ended, December 31 2011, legal expenses of $31,697 (year        
ended December 31, 2010: $98,017), 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 December 31, 2011,         
$56,338 (December 31, 2010 - $90,778) owing to this legal firm was included     
in accounts payable.                                                            
As at December 31, 2011, an amount of $133,333 was owed to two directors of     
the Company representing consulting fees (December 31, 2010: $102,311).         
During the year ended December 31, 2011, consulting fees of $200,000 were       
incurred to the two directors (year ended December 31, 2010: $200,000 to the    
two directors).                                                                 
As at December 31, 2011, an amount of $11,313 (December 31, 2010: $3,719) was   
owed to Banro Corporation ("Banro").  Banro owns 17,716,994 common shares of    
the Company, representing a 35.64% 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          
1,250,000 units of the Company at a price of $0.20 per unit for proceeds of     
$250,000.  The purchasers of the units under this private placement were        
directors and officers of the Company (see "Liquidity and Resources" 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                                                      
The year ended December 31, 2011 was the Company`s first annual 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 Part V of the 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, Share based    
    payments ("IFRS 2") to equity instruments that were granted and that        
    vest before the transition date. As a result of applying this exemption,    
the Company has applied the provision of IFRS 2 retrospectively to all      
    outstanding equity instruments that were unvested as of to the date of      
    transition to IFRS.                                                         
ii)        Deemed Cost of Exploration and Evaluation Assets                     
The Company has elected to measure its exploration and evaluation assets    
    at the date of transition to IFRS at the amount determined under            
    Canadian GAAP. Per IFRS 1, the Company has tested these assets for          
    impairment at the date of transition to IFRS in accordance with IFRS 6.     
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 year ended December     
31, 2010 as well as the consolidated statement of cash flows for the year       
ended December 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.                                     
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.           
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.                     
An amendment to IAS 12, Income Taxes ("IAS 12") was issued by the IASB in       
June 2011. The amendment requires that deferred tax on non-depreciable assets   
should always be measured on a sale basis. The amendments to IAS 12 are         
effective for annual periods beginning on or after January 1, 2012. The         
Company is currently evaluating the impact of the amendments on its             
consolidated financial statements.                                              
IAS 19, Employee Benefits ("IAS 19") was re-issued by the IASB in June 2011.    
IAS continues to prescribe the accounting for employee benefits, but            
amendments make the OCI presentation changes in respect of pensions (and        
similar items) only, but all other long term benefits are required to be        
measured in the same way even though changes in the recognised amount are       
fully reflected in profit or loss. Also changed in IAS 19 is the treatment      
for termination benefits, specifically the point in time when an entity would   
recognise a liability for termination benefits. The amendments to IAS 19 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 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.                                              
IFRIC 20, Stripping costs in the production phase of a surface mine ("IFRIC     
20") was issued by the IASB in October 2011 clarifying the requirements for     
accounting for stripping costs in the production phase of a surface mine. The   
interpretation is effective for annual periods beginning on or after January    
1, 2013. The Company is currently evaluating the impact of the interpretation   
on its consolidated financial statements.                                       
CRITICAL ACCOUNTING ESTIMATES                                                   
The preparation of the Company`s 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 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                               
a)   Fair value of financial assets and liabilities                             
The consolidated statements of financial position carrying amounts for cash,    
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:                                                          
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.  See Note 14 (c) of the Annual Financial Statements for          
additional details.                                                             
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, 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 year ended December 31, 2011.                             
Neither the Company nor any of its subsidiaries are subject to externally       
imposed capital requirements.                                                   
December 31,   December 31,     January 1, 2010                     
            2011           2010                                                 
Cash         $      88,068  $     126,931    $     664,495                      
Share         $115,939,566   $ 115,457,876    $ 115,457,876                     
capital                                                                         
Deficit                      $(119,408,103)   $(117,900,848)                    
            $(119,531,417)                                                      
Contributed   $  8,159,644   $   7,815,398    $   7,777,105                     
surplus                                                                         
SEGMENTED INFORMATION                                                           
The Company has one operating segment: the acquisition, exploration and         
development of mineral properties located in the DRC. The operations of the     
Company are located in two geographic locations, Canada and the DRC.            
Geographic segmentation of non-current assets is as follows:                    
December 31,                                                                    
2011                                                                            
Property, plant   Exploration and     Total Assets                  
            and equipment     evaluation                                        
DRC          $0                $5,121,486          $5,121,486                   
Canada                   -               -                   -                  
$0                $5,121,486          $5,121,486                    
December 31,                                                                    
2010                                                                            
            Property, plant   Exploration and     Total Assets                  
and equipment     evaluation                                        
DRC          $4,100            $5,075,041          $5,079,141                   
Canada                   -               -                   -                  
            $4,100            $5,075,041          $5,079,141                    

January 1,                                                                      
2010                                                                            
            Property, plant   Exploration and     Total Assets                  
and equipment     evaluation                                        
DRC          $141,794          $5,826,755          $5,968,549                   
Canada                   -               -                  -                   
            $141,794          $5,826,755          $5,968,549                    
DISCLOSURE CONTROLS AND PROCEDURES                                              
Disclosure controls and procedures are designed to provide reasonable           
assurance that all relevant information is gathered and reported to senior      
management, including the Company`s President and Vice President, Finance, on   
a timely basis so that appropriate decisions can be made regarding public       
disclosure.  As at December 31, 2011, the Company`s President and Vice          
President, Finance evaluated or caused to be evaluated under their              
supervision the effectiveness of the Company`s disclosure controls and          
procedures as required by Canadian securities laws.  Based on that              
evaluation, the President and Vice President, Finance have concluded that, as   
of December 31, 2011, the Company`s disclosure controls and procedures were     
effective.  No material weaknesses have been identified.                        
INTERNAL CONTROL OVER FINANCIAL REPORTING                                       
Internal controls have been designed to provide reasonable assurance            
regarding the reliability of the Company`s financial reporting and the          
preparation of financial statements together with the other financial           
information for external purposes in accordance with IFRS.  As at December      
31, 2011, the Company`s President and Vice President, Finance evaluated or      
caused to be evaluated under their supervision, the effectiveness of the        
Company`s internal control over financial reporting as required by Canadian     
securities laws.  Based on that evaluation, the President and Vice President,   
Finance have concluded that, as of December 31, 2011, the Company`s internal    
control over financial reporting was effective.  No material weaknesses have    
been identified.                                                                
The Company is required under Canadian securities laws to disclose herein any   
change in the Company`s internal control over financial reporting that          
occurred during the Company`s most recent interim period that has materially    
affected, or is reasonably likely to materially affect, the Company`s           
internal control over financial reporting.  No changes were identified in the   
Company`s internal control over financial reporting during the year ended       
December 31, 2011, that have materially affected, or are reasonably likely to   
materially affect, the Company`s internal control over financial reporting.     
It should be noted that a control system, including the Company`s disclosure    
and internal controls and procedures, no matter how well conceived can          
provide only reasonable, but not absolute, assurance that the objective of      
the control system will be met and it should not be expected that the           
disclosure and internal controls and procedures will prevent all errors or      
fraud.                                                                          
Sponsor                                                                         
Arcay Moela Sponsors (Proprietary) Limited                                      
08 May 2012                                                                     
Date: 08/05/2012 17:08:00 Supplied by www.sharenet.co.za                     
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