exv99w1



Frontier Pacific Mining Corporation		Statement 1
(An Exploration Stage Company)
Interim Consolidated Balance Sheets
As at June 30, 2008 (unaudited) and December 31, 2007
Unaudited
Canadian dollars


	June 30,			December 31,
	2008			2007

ASSETS
Current
Cash and cash equivalents	$	11,998,017		$	4,853,940
Short term investments (Note 5)		55,947			13,055,947
Amounts receivable		447,394			276,698
Due from related parties (Note 9)		15,817			107,928
Marketable securities (Note 4)		570,000			800,000
Prepaid expenses		67,486			338,766

		13,154,661			19,433,279
Property and equipment, net (Note 3)		149,620			161,456
Mineral interests (Note 7)		32,206,150			27,488,954
Long term investment (Note 6)		875,000			875,000
Reclamation bond		7,847			7,847

	$	46,393,278		$	47,966,536


LIABILITIES

Current
Accounts payable and accrued liabilities	$	2,407,117		$	999,590
Exploration advances received		105,000			105,000

		2,512,117			1,104,590
Future income tax liability		5,345,558			4,514,291

		7,857,675			5,618,881


SHAREHOLDERS’ EQUITY

Share capital — Statement 3 (Note 8)		67,121,793			61,703,544
Contributed surplus — Statement 3 (Note 8)		1,011,890			1,497,848
Deficit — Statement 3		(29,768,080	)		(21,253,737	)
Accumulated other comprehensive income — Statement 3		170,000			400,000

		38,535,603			42,347,655

	$	46,393,278		$	47,966,536

Subsequent Events (Note 14)

Approved on behalf of the Board of Directors



(Signed) Earl W. Price	Director	(Signed) Paul N. Wright	Director

— See Accompanying Notes —


Frontier Pacific Mining Corporation		Statement 2
(An Exploration Stage Company)
Interim Consolidated Statements of Operations
For the period ended June 30
Unaudited
Canadian dollars


	Three months ended						Six months ended
	2008			2007			2008			2007
	$			$			$			$

General and Administrative Expenses
Consulting fees		3,441,150			—			3,445,472			3,623
Salaries and benefits		1,995,482			198,694			2,183,479			397,927
Stock based compensation (Note 8c)		1,329,320			138,652			1,545,196			242,619
Legal fees		472,267			63,441			490,371			78,286
Shareholder information		197,174			18,949			199,819			25,051
Office, telephone and sundry		136,262			60,983			190,580			166,293
Directors’ fees		117,875			—			135,375			—
Travel and promotion		35,577			(161,581	)		114,070			185,100
Management and administration fees		41,800			50,000			67,600			60,000
Audit and accounting fees		54,864			13,150			62,333			37,294
Regulatory compliance		38,652			10,531			39,207			29,854
Amortization		10,125			11,821			22,563			21,090
Insurance		10,178			11,699			17,206			21,359

		7,880,726			416,339			8,513,271			1,268,496
Other Expenses and (Income)
Foreign exchange (gain) loss		398,796			(89,717	)		370,875			(80,574	)
Interest income		(106,978	)		(146,511	)		(286,549	)		(279,424	)
Recovery of administrative costs		—			—			(12,754	)		—
Expense exploration costs		30,863			—			30,863			47,701

Loss for the Period before income tax		8,203,407			180,111			8,615,706			956,199

Future income tax recovery		(101,363	)		—			(101,363	)		—

Loss for the Period		8,102,044			180,111			8,514,343			956,199


Loss per share — basic and diluted		0.05			0.00			0.05			0.01

Weighted average number of shares		164,978,280			138,420,871			164,733,157			135,137,729

— See Accompanying Notes —


Frontier Pacific Mining Corporation		Statement 3
(An Exploration Stage Company)
Interim Consolidated Statements of Shareholders’ Equity
As at June 30, 2008
Unaudited
Canadian dollars


											Accumulated
	Number of		Share		Contributed						Other			Total
	Shares		Capital		Surplus						Comprehensive			Shareholders’
	(Note 8a)		(Note 8)		(Note 8d)			Deficit			Income			Equity


Balance — December 31, 2006		131,641,170	$	48,560,505	$	1,075,796		$	(16,520,932	)	$	2,420,000		$	35,535,369

Net loss for year		—		—		—			(4,732,805	)		—			(4,732,805	)
Unrealized loss on available-for-sale securities, net of future income taxes		—		—		—			—			(2,020,000	)		(2,020,000	)

Total comprehensive loss		—		—		—			(4,732,805	)		(2,020,000	)		(6,752,805	)
Shares issued for cash
Exercise of warrants		30,875,984		12,177,039		—			—			—			12,177,039
Exercise of options		800,000		175,000		—			—			—			175,000
Shares issued for mineral properties		1,050,000		756,000		—			—			—			756,000
Fair value of options exercised		—		35,000		(35,000	)		—			—			—
Stock-based compensation		—		—		457,052			—			—			457,052

		32,725,984		13,143,039		422,052			(4,732,805	)		(2,020,000	)		6,812,286

Balance — December 31, 2007		164,367,154	$	61,703,544	$	1,497,848		$	(21,253,737	)	$	400,000		$	42,347,655

Net loss for the period		—		—		—			(8,514,343	)		—			(8,514,343	)
Unrealized loss on available-for-sale securities, net of future income taxes		—		—		—			—			(230,000	)		(230,000	)

Total comprehensive loss		—		—		—			(8,514,343	)		(230,000	)		(8,744,343	)
Shares issued for cash:
Exercise of options		6,470,000		3,075,750		—			—			—			3,075,750
Shares issued for mineral properties		250,000		250,000		—			—			—			250,000
Fair value of options exercised		—		2,092,499		(2,092,499	)		—			—			—
Stock-based compensation		—		—		1,606,541			—			—			1,606,541

		6,720,000		5,418,249		485,958			(8,514,343	)		(230,000	)		(3,812,052	)


Balance — June 30, 2008		171,087,154	$	67,121,793	$	1,011,890		$	(29,768,080	)	$	170,000		$	38,535,603

— See Accompanying Notes —


Frontier Pacific Mining Corporation		Statement 4
(An Exploration Stage Company)
Interim Consolidated Statements of Cash Flows
For the period ended June 30
Unaudited
Canadian dollars


	Three months ended						Six months ended
	2008			2007			2008			2007
	$			$			$			$

Cash flows generated from (used in):

Operating activities
Loss for the period		(8,102,044	)		(180,111	)		(8,514,343	)		(956,199	)
Items not affecting cash:
Amortization		10,125			11,821			22,563			21,090
Stock based compensation		1,329,320			138,652			1,545,196			242,619
Future income tax		(101,363	)					(101,363	)

		(6,863,962	)		(29,638	)		(7,047,947	)		(692,490	)
Changes in non cash working capital:
Accounts receivable		(325,361	)		617			(170,696	)		(104,144	)
Prepaid expenses		191,710			(55,026	)		271,280			(51,691	)
Accounts payable and accrued liabilities		1,684,190			(244,700	)		1,407,527			(208,959	)
Due from related parties		136,142			(346,427	)		92,111			(363,346	)

		(5,177,281	)		(675,174	)		(5,447,725	)		(1,420,630	)


Investing Activities
Mineral interests expenditures		(1,784,070	)		(1,732,238	)		(3,473,221	)		(2,693,554	)
Short term investments		3,000,000			—			13,000,000
Purchase of equipment		(10,727	)		(49,442	)		(10,727	)		(60,517	)

		1,205,203			(1,781,680	)		9,516,052			(2,754,071	)


Financing Activities

Issuance of share capital		3,024,250			6,359,794			3,075,750			7,177,039


Net Increase (Decrease) In Cash and cash equivalents		(947,828	)		3,902,940			7,144,077			3,002,338

Cash and cash equivalents — beginning of period		12,945,845			12,857,138			4,853,940			13,757,740

Cash and Cash Equivalents — End of Period		11,998,017			16,760,078			11,998,017			16,760,078


Supplemental schedule of non cash investing and financing activities
Decrease in fair value of marketable securities		80,000			1,040,000			230,000			1,140,000
Stock based compensation in mineral interests		—			38,444			61,345			83,139
Accounts payable in mineral interest costs		—			416,257			—			416,257
Future income taxes in mineral interest costs		921,117						932,630			—
Shares issued for mineral properties		250,000			—			250,000			—
Fair value of options exercised		2,078,610						2,092,499			—

— See Accompanying Notes —

Frontier Pacific Mining Corporation
(An Exploration Stage Company)
Notes to Interim Consolidated Financial Statements
For the three- and six- month periods ended June 30, 2008
Unaudited
Canadian dollars

1.		Nature of Operations

		Frontier Pacific Mining Corporation and its subsidiaries (collectively the “Company”) is an exploration stage company engaged in the acquisition, exploration and development of mineral properties.

2.		Significant Accounting Policies

Basis of Consolidation

The accompanying unaudited interim consolidated financial statements are prepared by management in accordance with generally accepted accounting principles (“GAAP”) in Canada with respect to the preparation of interim financial statements. Accordingly, they do not include all the information and disclosures required by Canadian GAAP in preparation of annual financial statements. The accounting policies used in the preparation of the accompanying unaudited interim financial statements are the same as those described in the annual audited financial statements and the notes thereto for the year ended December 31, 2007.

These interim consolidated financial statements include the accounts of the Company and its wholly-owned Greek subsidiary, Thracean Gold Mining S.A. (TGM), US subsidiaries Fargo Resources Inc., Caprock Resources Inc., Peruvian subsidiary Minera Frontera Pacifico S.A. (MFP) and Colombian subsidiary Cosigo Frontier Pacific Mining Corporation. Caprock Resources Inc. was inactive during the period. All inter-company transactions and balances were eliminated upon consolidation.

Management Estimates

The preparation of financial statements in conformity with Canadian generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reported years. Actual results could differ from those estimates.

(c)

Accounting Changes

Capital Disclosures — Effective January 1, 2008, the Company adopted the CICA Section 1535 Capital Disclosures. This standard requires disclosure of an entity’s objectives, policies and processes for managing capital, quantitative data about what the entity regards as capital and whether the entity has complied with any capital requirements and, if it has not complied, the consequences of such non-compliance.

Significant Accounting Policies — Continued

Recent Accounting Pronouncements

International Financial Reporting Standards (“IFRS”) - In 2006, the Canadian Accounting Standards Board (“AcSB”) published a new strategic plan that will significantly affect financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of Canadian generally accepted accounting principles (“GAAP”) with IFRS over an expected five year transitional period. In February 2008, the AcSB announced that the changeover date for publicly-listed companies to use IFRS, replacing Canada’s own GAAP, is for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011.

The transition date of January 1, 2011 will require the restatement for comparative purposes of amounts reported by the Company for the year ended December 31, 2010. While the Company has begun assessing the adoption of IFRS for 2011, the financial reporting impact of the transition to IFRS cannot be reasonably estimated at this time.

Financial Instruments

Effective January 1, 2007, the Company prospectively adopted the Canadian Institute of Chartered Accountants (“CICA”) recommendations pertaining to financial instruments (Section 3855 Financial Instruments — Recognition and Measurement.), which establish standards for the recognition, measurement, disclosure and presentation of financial assets, financial liabilities and non-financial derivatives. These recommendations require that fair value be used to measure financial assets that are held for trading or available for sale, financial liabilities that are held for trading and all derivative financial instruments. Other financial assets, such as loans and receivables and investments that are held to maturity and other financial liabilities are measured at their carrying value.

Upon adoption of this new standard at January 1, 2007, the Company commenced accounting for its financial instruments as follows:


Cash and cash equivalents		Held for trading
Short-term investments		Held for trading
Amounts receivable and Due from related parties		Loans and receivable
Marketable Securities		Available for sale
Long-term Investments		Available for sale and recorded at cost
Reclamation Bond		Held to maturity
Accounts payable and accrued liabilities and Due to related parties		Other financial liabilities

Effective January 1, 2008, The Company adopted the Canadian Institute of Chartered Accountants (“CICA”) Handbook Section 3862 Financial Instruments — Disclosures and Section 3863 Financial Instruments — Presentation, which together comprise a complete set of disclosure and presentation requirements that revise and enhance current disclosure requirements. Section 3862 requires disclosure of additional detail by financial asset and liability categories. Section 3863 establishes standards for presentation of financial instruments and non-financial derivatives. The standard deals with the classification of financial instruments, from the perspective of the issuer, between liabilities and equity, the classification of related interest, dividends, losses and gains, and the circumstances in which financial assets and financial liabilities are offset. The adoption of these sections did not have a material impact on the Company’s disclosure and presentation.

3.		Property and Equipment

		Details are as follows:


	June 30, 2008							December 31, 2007
			Accumulated			Net Book				Accumulated			Net Book
	Cost		Amortization			Value		Cost		Amortization			Value

	$		$			$		$		$			$

Land		87,073		—			87,073		78,811		—			78,811
Machinery		38,292		(38,292	)		—		38,292		(38,292	)		—
Vehicles		78,224		(78,224	)		—		78,224		(78,224	)		—
Computer equipment		112,445		(80,596	)		31,849		112,445		(61,569	)		50,876
Furniture and fixtures		114,259		(83,561	)		30,698		111,794		(80,025	)		31,769

		430,293		(280,673	)		149,620		419,566		(258,110	)		161,456

4.		Marketable Securities

		Details of marketable securities are as follows:

June 30,

June 30,

Number

2008

2007

Book

Market

Book

Market

Owned

Value

value

Value

Solex Resources Corp.

2,000,000

400,000

570,000

400,000

1,680,000

		Solex Resources Corp. (“Solex”) and the Company are companies with a director in common.

5.		Short Term Investments

Short term investments as at June 30, 2008 consist of the following:

Accrued

Annual Interest

Type of Investment

Face Value

Interest

Rate

Maturity Date

Short term deposit (*)

55,947

—

2.50

January 25, 2009


(*)		The $55,947 investment is used as a security for a Standby Letter of Credit in favour of Instituto Colombia De Geologia y Minera (“Ingeominas”) to ensure payment of fees in connection with the Taraira mineral concession (Note 7d).

Long Term Investments

In 2007 the Company acquired 3,500,000 Units of Cosigo Resources Inc. (“Cosigo”) at $0.25 per Unit, for total cash consideration of $875,000. Each Unit consists of one common share and one share purchase warrant. 1,000,000 warrants can be exercised into common shares of Cosigo at a price of $0.35 per share on or before November 5, 2008, and at $0.50 per share on or before November 5, 2009. 2,500,000 warrants can be exercised into common shares of Cosigo at a price of $0.35 per share on or before December 13, 2008, and at $0.50 per share on or before December 13, 2009. Consideration paid for the Units has been allocated between shares ($652,000) and warrants ($223,000) using a pro-rata method based on the fair values of shares and warrants on the date of issuance. Fair value of warrants has been estimated using the Black-Scholes pricing model using volatility of public companies comparable to Cosigo.

The following weighted average assumptions were used for the Black-Scholes valuation of warrants issued:


Risk-free interest rate		3.78	%
Expected life of warrants	1.5 years
Annualized volatility		101.6	%

Details of long term investments are as follows:


					June 30, 2008		December 31, 2007
	Number		% Owned		Book Value		Book Value

Common shares		3,500,000		12.34	$	652,000	$	652,000
Share Purchase Warrants		3,500,000		n/a		223,000		223,000

					$	875,000	$	875,000

Cosigo is a private company intending to have its shares trading on a Canadian stock exchange in 2008, but currently is not listed on any stock exchange and is not a reporting issuer in any jurisdiction (Note 7d). There is no market for Cosigo shares or warrants, therefore their fair value is recorded at cost.

Mineral Interests

A summary of the Company’s cumulative mineral interest costs as at June 30, 2008 is as follows:


	Perama		Macusani		Taraira		Total

Acquisition costs and option payments	$	16,464,081	$	1,032,588	$	303,999	$	17,800,668
Exploration costs		3,190,278		7,590,117		1,671,630		12,452,025
Future income tax		648,469		565,832		739,156		1,953,457

Total	$	20,302,828	$	9,188,537	$	2,714,785	$	32,206,150

7.		Mineral Interests — Continued

		Mineral interest expenditures for the six month period ended June 30, 2008 are as follows:


	Perama		Macusani			Taraira			Total

Balance — December 31, 2007	$	18,578,625	$	8,317,273		$	593,056		$	27,488,954

Acquisition costs		—		—			250,000			250,000
Exploration costs:
Legal		—		14,503			1,477			15,980
Office supplies, services		—		26,120			—			26,120
Project management		89,246		68,093			15,400			172,739
Geological engineering		2,922		403,182			11,756			417,860
Geophysical engineering		—		158,755			—			158,755
Survey, mapping		—		43,327			(52	)		43,275
Drilling		—		452,593			—			452,593
Assaying		—		62,539			129,440			191,979
Field supplies, equipment		—		6,814			648,894			655,708
Camp		—		266,587			—			266,587
Government fees		—		128,971			375,398			504,369
Travel		19,570		31,567			10,819			61,956
Bank charges		—		6,188			7,645			13,833
Community relations		—		11,658			—			11,658
Accounting and audit		—		12,337			—			12,337
IGV taxes		47,020		136,720			—			183,740
Permitting		1,246,529		—			—			1,246,529
Stock based compensation		9,520		36,481			15,344			61,345
Future income tax		309,396		(32,374	)		655,608			932,630

		1,724,203		1,834,061			2,121,729			5,679,993

Joint venture recoveries		—		(962,797	)		—			(962,797	)

Balance — June 30, 2008	$	20,302,828	$	9,188,537		$	2,714,785		$	32,206,150

A summary of the Company’s cumulative mineral interest costs as at December 31, 2007 is as follows:


	Perama		Macusani		Taraira		Total

Acquisition costs and option payments	$	16,464,081	$	1,032,588	$	53,999	$	17,550,668
Exploration costs		1,775,471		6,686,479		455,509		8,917,459
Future income tax		339,073		598,206		83,548		1,020,827

Project costs to date	$	18,578,625	$	8,317,273	$	593,056	$	27,488,954

Frontier Pacific Mining Corporation
(An Exploration Stage Company)
Notes to Interim Consolidated Financial Statements
For the three- and six- month periods ended June 30, 2008
Unaudited
Canadian dollars

7.		Mineral Interests — Continued

		Mineral interest expenditures for 2007 are as follows:


	Perama		Macusani			Taraira		Total

Balance — December 31, 2006	$	16,337,861	$	2,819,461		$	—	$	19,157,322

Acquisition costs:		44,756		—			53,999		98,755
Option payments:		—		756,000			—		756,000
Exploration costs:
Legal		—		22,551			1,731		24,282
Office supplies, services		—		45,219			13,108		58,327
Project management		166,375		54,002			8,557		228,934
Design engineering		58,100		—			—		58,100
Geological engineering		20,000		813,944			10,000		843,944
Geophysical engineering		—		239,641			—		239,641
Survey, mapping		—		175,791			78,294		254,085
Drilling		—		2,602,589			—		2,602,589
Assaying		22,916		496,518			—		519,434
Field supplies, equipment		—		1,491			5,734		7,225
Camp		—		493,564			93,767		587,331
Government fees		—		153,019			211,751		364,770
Travel		1,516		57,786			21,766		81,068
Bank charges		—		16,386			1,867		18,253
Community relations		—		71,348			—		71,348
Accounting and audit		—		19,941			—		19,941
IGV taxes		—		600,931			—		600,931
Permitting		1,497,705		—			—		1,497,705
Stock based compensation		90,323		94,414			8,934		193,671
Future income tax		339,073		598,206			83,548		1,020,827

		2,240,764		7,313,341			593,056		10,147,161

Joint venture recoveries		—		(1,815,529	)		—		(1,815,529	)

Balance — December 31, 2007	$	18,578,625	$	8,317,273		$	593,056	$	27,488,954

Mineral Interests — Continued

Perama Hill Gold Project, Greece

On December 16, 2004 the Company acquired 100% of the outstanding shares of Thracean Gold Mining S.A. (“TGM”), a company incorporated in Greece that holds a 100% interest in the Perama Hill Gold Project.

The purchase price for the shares of TGM was US$12,000,000 (CDN$14,814,895). In addition the Company incurred property investigation costs in the amount of CDN $560,198 and CDN $157,108 respectively which were included in the acquisition costs.

In addition, the Company agreed, on March 12, 2004, to reimburse the sellers for the actual reasonable costs incurred by the sellers in connection with the operation of TGM from March 12, 2004 to December 16, 2004. These amounted to CDN $1,033,578 and are considered part of the purchase price.

Total acquisition costs for TGM recorded in the Company’s accounts are CDN $16,464,081.

The Company also agreed to pay the following additional contingent payments:

(i) A cash payment of US$3,000,000 upon commencement of commercial production from the Project; and

(ii) A 2.5% net smelter return royalty payable on all ores, minerals, metals, materials or other products produced from the Project.

The cash payment of US$3,000,000 is a contingent consideration and is not reflected in the financial statements until the condition has been met.

By agreement dated April 10, 1997, TGM was granted an option in certain mineral exploration licenses (MEL’s) located adjacent to the Perama Hill Gold Project. The option payments were suspended April 11, 2002 pending approval by the regional government to renew the MEL’s. Subject to renewal of the MEL’s, TGM has offered to pay the remaining option payments of €608,950 to the optionor as follows:


	Amount in
	Euros

Upon the approval of the License of Environmental Impact Study (EIS) by the Ministries of Research, Development and the Environment	€	121,790
Upon final approval of the EIS		121,790
Upon the issuance of the Construction License by the Ministry of Development		121,790
Upon the issuance of the Intervention License according to the Forest Protection		121,790
Legislation
Upon issuance of the Operational Licenses by the Ministry of Development		60,895
Upon commencement of the operation of the project		60,895

	€	608,950

The property title was transferred to TGM as part of the agreement but the vendor has the right to regain it should TGM not satisfy its part(s) of the agreement.

Mineral Interests — Continued

Perama Hill Gold Project, Greece — Continued

The permitting status for the development of the Perama Hill Gold Project is presently awaiting approval of the ETR (Environmental Terms of Reference) by the Joint Ministerial Council.

Management has instituted a program to assess the geological, environmental and political factors relating to the Perama Hill Gold Project and to review, on an quarterly basis, any potential for impairment.

Macusani Project, Peru

On April 19, 2005 the Company entered into an option management agreement with Solex Resources Corp. (“Solex) to acquire an undivided 50% interest in a uranium property near Puno, Peru.

The Company made a cash payment of USD $50,000, and must, at its option, issue shares and incur minimum exploration expenditures as follows:


	Exploration costs
	(USD)			Common Shares

On date of the agreement	$	—			200,000		(issued)
On or before April 19, 2006		400,000	(complete)		250,000		(issued)
On or before April 19, 2007		350,000	(complete)		300,000	*	(issued)
On or before April 19, 2008		500,000	(complete)		350,000	*
On or before April 19, 2009		900,000	(complete)		400,000	*
On or before April 19, 2010		1,850,000	(complete)		—

	$	4,000,000			1,500,000

In addition, in 2005 the Company purchased 1,000,000 common shares of Solex and 1,000,000 warrants for total price of $150,000. The warrants were exercised at $0.25 per share in April 2006. The investment is included on the balance sheet under Marketable Securities (Note 4).


*		On April 18, 2007, the Company issued to Solex 300,000 shares valued at $231,000. On November 1, 2007, the Company issued the remaining 750,000 shares valued at $525,000, thereby fulfilling all of its requirements to earn the 50% interest in the Macusani project. Shares issued in November are presently held in trust. They will be released from trust when the 50% interest in Macusani project is legally transferred to the Company.

Mineral Interests — continued

Taraira Property, Colombia

On September 28, 2007, Cosigo Frontier Mining Corp (“Cosigo Frontier”) was awarded and signed a concession contract with the Ingeominas for the Taraira gold concession in the department of Vaupes, southeastern Colombia. The Contract duration is thirty years with an optional extension period of up to thirty years.

On November 2, 2007, the Company entered into an agreement with Cosigo Resources Inc. (“Cosigo”), which requires the Company to finance $2,000,000 on exploration over a three year period in order to earn a 51% ownership in Taraira Property. To facilitate the earn in process and exploration activities in Colombia, during the current period the Company and Cosigo incorporated Cosigo Frontier, a B.C. company, and Cosigo Frontier’s wholly owned Colombian branch office Cosigo Frontier Mining Corporation Sucursal Colombia. Once the Company spends $2,000,000, the Company will own 51% of Cosigo Frontier.

The exploration and development stages are limited to three years each, with a two year extension available for the exploration stage, and a one year extension available for the development stage. The remaining time is allowed for the production stage. During the production stage, on an annual basis Cosigo Frontier will also be paying a 1% production royalty to the Colombian government.

Subsequent to the year ended December 31, 2007 to maintain the concession in good standing, Cosigo Frontier paid a one time fee of USD$115,000 for the Taraira property information database.

In addition, annual surface area royalty payments are required. The estimated first year surface area royalty is estimated at $211,751 and was paid subsequent to year ended December 31, 2007. The royalty payment is due annually prior to the anniversary of the effective date of the concession, and the cost will be shared equally between the Company and Cosigo.

As collateral for a USD$47,000 letter of guarantee issued by the Company’s bank to Ingeominas, the Company pledged a USD$48,400 ($55,947) short term deposit. The letter of guarantee expires on January 25, 2009.

Under the terms of the Shareholder Agreement, on or before June 30, 2008 the Company will also have an option to undertake exploration work to the value of $500,000 to earn a 51% interest in an additional property know as the Garimpo Mine Area located in Colombia. The Company would also need to reimburse Cosigo for up to $25,000 of their costs incurred in securing this property. If this option is exercised, Garimpo property will be transferred to Cosigo Frontier. The Company and Cosigo are currently negotiating an extension of the deadline for exercising of the Garimpo option.

The Company will be able to terminate this agreement at any time, in which case it will have to return to Cosigo its 51% of Cosigo Frontier shares.

8.		Shareholder’s Equity

		The Company’s authorized share capital consists of an unlimited number of common shares without par value.

	a)		Share Issuances

			During the current period, 6,470,000 options were exercised for aggregate gross proceeds of $3,075,750.

			During the current period 250,000 shares were issued for mineral properties at a fair value of $250,000.

	b)		Share Purchase Warrants

			The Company had no warrants outstanding as of December 31, 2007 and June 30, 2008.

	c)		Stock options

The Company adopted a rolling stock option plan whereby directors may, from time to time, authorize the issuance of options to directors, officers, employees and consultants of the Company and its subsidiaries to a maximum of 10% of the issued and outstanding common shares of the Company at the time of the grant, with a maximum of 2% of the Company’s issued and outstanding shares reserved for any one consultant or employee conducting investor relations activities on a yearly basis. Options vest 16.67% on granting and every 90 days thereafter until fully vested. Performance vested options have a term of five years and vest on attaining specified milestones.

During the period, the Company granted options to purchase up to 2,850,000 shares of the Company’s stock to directors, officers, consultants and employees of the Company, with a total fair value of $1,511,979 of this $1,450,634 was expensed on the income statement and $61,345 capitalized to mineral interest costs. The Company also recorded additional stock based compensation of $94,562 on options granted in the previous year that vested during the six months ended June 30, 2008. The offsetting entry was to contributed surplus for a total of $1,606,541.

The Company’s stock option activity for the six month period and balance as at June 30, 2008 are as follows:


Balance at									Balance at
December 31,									June 30,		Exercise
2007		Granted		Exercised			Expired		2008		Price		Expiry Date

	200,000		—		(200,000	)		—		—	$	0.20	February 5, 2008
	50,000		—		(50,000	)		—		—	$	0.23	March 21,2008
	125,000		—		(125,000	)		—		—	$	0.52	August 20, 2008
	250,000		—		(250,000	)		—		—	$	0.55	March 1, 2009
	—		—					—		—	$	0.73	March 22, 2009
	200,000		—		(100,000	)		—		100,000	$	0.41	(*) January 27, 2010
	3,520,000		—		(1,445,000	)		—		2,075,000	$	0.25	(**) October 26, 2010
	2,125,000		—		(2,050,000	)		—		75,000	$	0.38	August 4, 2011
	200,000		—		(200,000	)		—		—	$	0.85	March 5, 2012
	200,000		—		(200,000	)		—		—	$	0.60	September 10, 2012
	—		2,850,000		(1,850,000	)		—		1,000,000	$	0.73	(***) January 17, 2013

	6,870,000		2,850,000		(6,470,000	)		—		3,250,000	$	0.40

Shareholder’s Equity — Continued

Stock options — Continued


v		As of June 30, 2008 all options had vested, as a result of the agreement between Eldorado Gold Corporation and the Company.

(*)		100,000 of these options were settled according to a support agreement subsequent to the end of the period.

(**)		1,750,000 of these options were settled according to a support agreement subsequent to the end of the period.

(***)		900,000 of these options were settled according to a support agreement subsequent to the end of the period.

****		Subsequent to the end of the period 500,000 stock options were exercised for gross proceeds of $182,500.

The fair value of each option granted is estimated using an option-pricing model with the following weighted average assumptions:


	2008			2007			2006

Expected dividend yield		0.0	%		0.0	%		0.0	%
Stock price volatility		94	%		101	%-		99	%
Risk free interest rate		4.50	%		4.03	%		3.80	%
Expected life of options	5 years			4.65 years			5 years

Option pricing models require the input of highly subjective assumptions including the expected price volatility. Changes in the subjective input assumptions can materially affect the fair value estimate, and therefore the existing models do not necessarily provide a reliable single measure of the fair value of the Company’s stock options.

Contributed Surplus

The contributed surplus balance includes $319,247, which represents the equity portion of a convertible loan that was extinguished in 2005. The remaining balance of contributed surplus, and all activity in the current and prior year, relate to stock options.

9.		Related Party Balances and Transactions

		Except as disclosed elsewhere in these financial statements, related party transactions are as follows:


	Paid/Accrued to:	June 30, 2008		December 31, 2007

Fees	Directors	$	135,375	$	32,000
* Retirement allowance	Directors and officers	$	1,277,880		—
Salaries and benefits	Directors and officers	$	239,790		422,800
Management and administration	Directors and officers	$	67,600		76,300


	Received/Receivable from:	June 30, 2008		December 31, 2007

Recovery of administrative costs	Company with a director in common	$	12,754	$	97,850
Office services, rent	Company with a director in common	$	41,760	$	71,960
Advance, Rent	Company with a director and officer in common	$	9,495	$	10,564

Amounts due from related parties of $15,817 (2007 — $107,928) are from companies with a director in common. Amounts receivable were for exploration costs, office rent and travel advances. Exploration costs are invoiced and due one month after issue of invoice. Outstanding balances bear a rate of interest of 1% per month. The remaining balances bear no interest and have no specific terms of repayment.

The above transactions occurring in the normal course of operations are measured at the exchange amount, which is the amount of consideration established and agreed to by the related parties.


*		Effective April 19, 2008 the Company entered into employment agreements with certain directors and officers of the Company that allowed for a retirement payment should a change of control happen within the Company. As a result of the takeover by Eldorado Gold Corporation, resulting in a change in control the Company has accrued a retirement allowance of $1,462,031 of which $1,277,880 is payable to related parties.

10.		Commitments

		The Company has the following total lease obligations as at June 30, 2008:

Location

Commitment

Expiry Date

Canada

Office lease

Vancouver

108,754

August 31, 2011

Greece

Office lease

Karaglannides

34,327

November 13, 2009

Office lease

Karathanassi

14,409

July 25, 2009

Office lease

Athens

24,248

September 14, 2009

Total

181,738

11.		Segmented Information

		Details are as follows:


June 30, 2008	Canada		Greece		Peru		USA			Colombia		Total


Loss (income)	$	7,825,728	$	685,862	$	4,791	$	(2,038	)	$	—	$	8,514,343
Mineral interests	$	—	$	20,302,828	$	9,188,537	$	—		$	2,714,785	$	32,206,150
Total assets	$	13,037,177	$	20,660,664	$	9,876,375	$	63,742		$	2,755,320	$	46,393,278

12.		Capital Management

		The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern, so that it can provide returns for shareholders and benefits for other stakeholders, and to bring its mineral interest projects in Greece, Peru and Colombia to commercial production.

		The Company depends on external financing to fund its activities. The capital structure of the Company currently consists of common shares, stock options and share purchase warrants. The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, or sell assets to fund operations. Management reviews its capital management approach on regular basis. The Company is not subject to externally imposed capital requirements.

		The Company invests all capital that is surplus to its immediate operational needs in short-term, liquid and highly-rated financial instruments, such as cash and other short-term guaranteed deposits, all held with major Canadian financial institutions.

13.		Financial Instruments

		Categories of financial assets and liabilities

		As at June 30, 2008, the carrying and fair value amounts of the Company’s financial instruments are the same. The carrying value of the Company’s financial instruments is classified into the following categories:


	June 30, 2008		December 31, 2007

Held for trading	$	12,053,964	$	17,909,887
Available for sale	$	570,000	$	800,000
Loans and receivables	$	430,711	$	384,626
Held to maturity	$	7,847	$	7,847
Other financial liabilities	$	3,111,744	$	1,104,590

13.		Financial Instruments — Continued

		Risk Management

		The Company’s financial instruments are exposed to the following financial risks:

	a)		Credit Risk — Credit risk is the risk that one party to a financial instrument will fail to fulfil and obligation and cause the other party to incur a financial loss. The Company’s credit risk consists primarily of cash and cash equivalents and short term investments. The credit risk is minimized by placing cash and cash equivalents and investing short term investments with major Canadian financial institutions. The Company does not invest in asset—backed commercial papers.

	b)		Currency Risk — The Company is exposed to foreign currency fluctuations to the extent cash and accounts payable and accrued liabilities of the Company are not denominated in Canadian dollars. As at June 30, 2008, the Company had $141,261 (December 31, 2007 — $51,334) of cash denominated in Euros, $55,895 (December 31, 2007 — $53,858) in US dollars, $667,482 (December 31, 2007 — $50,279) in Peruvian Soles, and $40,534 (December 31, 2007 — $32,575) in Colombian Pesos. As at June 30, 2008, there were $354,673 (December 31, 2007 — $183,856) of liabilities denominated in Euros, $30,063 (December 31, 2007 — $18,596) in Peruvian Soles, and $40,534 (December 31, 2007 — $23,879) in Colombian Pesos. These liabilities were included in accounts payable and accrued liabilities.

	d)		Liquidity Risk — Liquidity risk is the risk that the Company will not be able to meet its financial obligations when they become due. To mitigate this risk, the Company has a planning and budgeting process in place to determine the funds required to support its ongoing operations and capital expenditures. The Company insures that sufficient funds are raised from private placements or loans to meet its operating requirements, after taking under account existing cash and cash equivalents, short term investments and expected exercise of stock options and share purchase warrants.

	e)		Interest Rate Risk — Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the short-term investments is limited because these investments, although available for sale, are generally held to maturity

14.

Subsequent Events

	a)		On July 3, 2008 Eldorado Gold Corporation’s (“Eldorado’s”) bid to acquire all of the outstanding shares of the Company was successful. The transaction is valued at approximately C$148 million (or C$157 million on a fully diluted basis). The Company’s shareholders will receive 0.122 common shares of Eldorado and C$0.0001 in cash as well as one exchange receipt (an “Exchange Receipt”) for every common share of the Company. Each Exchange Receipt will entitle its holder to receive, without payment of additional consideration, 0.008 common shares of Eldorado, conditional upon a joint ministerial resolution being issued prior to July 1, 2009 by the Greek Joint Ministerial Council, comprised of the Greek Ministries of Environment, Agriculture, Culture, Development and Health, accepting the environmental terms of reference drafted by the Ministry of the Environment for the Company’s Perama Hill gold project. If the joint ministerial resolution accepting the environmental terms of reference is not received prior to July 1, 2009, the Exchange Receipts will be cancelled.

	b)		On July 8, 2008 the Company accepted the resignation of all its directors and officers and new directors and officers were appointed.

	c)		In August 2008, we were notified that the Supreme Administrative Court in Greece has ruled invalid the pre approval act for the Perama Hill gold project. As a result of this ruling, the environmental permitting for the project should be initiated under the new rules.