<SEC-DOCUMENT>0001062993-11-001173.txt : 20110328
<SEC-HEADER>0001062993-11-001173.hdr.sgml : 20110328
<ACCEPTANCE-DATETIME>20110325195056
ACCESSION NUMBER:		0001062993-11-001173
CONFORMED SUBMISSION TYPE:	6-K
PUBLIC DOCUMENT COUNT:		6
CONFORMED PERIOD OF REPORT:	20101231
FILED AS OF DATE:		20110328
DATE AS OF CHANGE:		20110325

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			TASEKO MINES LTD
		CENTRAL INDEX KEY:			0000878518
		STANDARD INDUSTRIAL CLASSIFICATION:	GOLD & SILVER ORES [1040]
		IRS NUMBER:				000000000
		STATE OF INCORPORATION:			A1
		FISCAL YEAR END:			0930

	FILING VALUES:
		FORM TYPE:		6-K
		SEC ACT:		1934 Act
		SEC FILE NUMBER:	001-31965
		FILM NUMBER:		11713684

	BUSINESS ADDRESS:	
		STREET 1:		SUITE 1020
		STREET 2:		800 WEST PENDER STREET
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2V6
		BUSINESS PHONE:		604-684-6365

	MAIL ADDRESS:	
		STREET 1:		SUITE 1020
		STREET 2:		800 WEST PENDER STREET
		CITY:			VANCOUVER
		STATE:			A1
		ZIP:			V6C 2V6
</SEC-HEADER>
<DOCUMENT>
<TYPE>6-K
<SEQUENCE>1
<FILENAME>form6k.htm
<DESCRIPTION>REPORT OF FOREIGN PRIVATE ISSUER
<TEXT>
<HTML>
<HEAD>
<TITLE>Taseko Mines Ltd.: Form 6-K - Filed by newsfilecorp.com</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF" style="font-size: 10pt;">
<hr noshade align="center" width="100%" size=3 color="black">

<p align="center"><font size="5"><strong>UNITED STATES<br>
  SECURITIES AND EXCHANGE COMMISSION</strong></font><br>
  Washington, D.C. 20549</p>

<p align="center"><b><font size="5">FORM 6-K</font></b></p>
<p align="center"><b>REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16
  OR 15d-16 <br>
  UNDER THE SECURITIES EXCHANGE ACT OF 1934</b></p>
<p align="center">As at <b>March 25, 2011</b></p>

<p align="center">Commission File Number: <b>001-31965</b></p>

<p align="center"><b><u><font size="5">TASEKO MINES LTD.</font></u></b><br>
  (Translation of registrant's name into English) </p>

<p align="center"><b>Suite 300 &#150; 905 West Pender Street<br>
  Vancouver, British Columbia<br>
  <u>Canada V6C 1L6</u></b><br>
  (Address of principal executive offices) </p>

<p align="center">Indicate by check mark whether the registrant files or will
  file annual reports under cover Form 20-F or Form 40-F.</p>
<p align="center">[<font style="font-size:1px;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>]
  Form 20-F&nbsp;&nbsp;&nbsp;[ x ] Form 40-F</p>
<p align="center">Indicate by check mark if the registrant is submitting the Form
  6-K in paper as permitted by Regulation S-T Rule 101(b)(1): [<font style="font-size:1px;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>]</p>
<p align="center"> Indicate by check mark if the registrant is submitting the
  Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): [<font style="font-size:1px;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>]</p>
<p align="center">Indicate by check mark whether by furnishing the information
  contained in this Form, the registrant is also thereby furnishing the information
  to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
  of 1934.</p>
<p align="center">Yes [<font style="font-size:1px;">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font>]
  No [ x ]</p>
<p align="center"> If &quot;Yes&quot; is marked, indicate below the file number
  assigned to the registrant in connection with Rule 12g3-2(b): 82- _________
</p>

<HR noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">
<p align="center"><img src="tasekologo.jpg"></p>
<p align="center"><b><u>SUBMITTED HEREWITH</u></b></p>

<p align="left"><u>Exhibits</u></p>

<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="5%" valign="top" bgcolor="#EEEEEE">&nbsp;</td>
    <td width="5%" valign="top" bgcolor="#EEEEEE"><a href="exhibit99-1.htm">99.1</a></td>
    <td bgcolor="#EEEEEE"><a href="exhibit99-1.htm">Consolidated Financial Statements for the year ended December 31, 2010</a></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top" bgcolor="#EEEEEE">&nbsp;</td>
    <td valign="top" bgcolor="#EEEEEE"><a href="exhibit99-2.htm">99.2</a></td>
    <td bgcolor="#EEEEEE"><a href="exhibit99-2.htm">Management's Discussion and Analysis for the year ended December 31, 2010</a></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
</table>
<p>&nbsp;</p>

<hr noshade align="center" width="100%" size=5 color="black" style="page-break-after:always;">

<p align="center"><strong><u>SIGNATURES</u></strong></p>

<p align="justify">Pursuant to the requirements of the Securities Exchange Act
  of 1934, the registrant has duly caused this report to be signed on its behalf
  by the undersigned, thereunto duly authorized.</p>

<table style="font-size: 10pt;" width="100%" border="0" cellspacing="0" cellpadding="0">
  <tr>
    <td width="50%" valign="top">&nbsp;</td>
    <td colspan="2" valign="top"><b>Taseko Mines Ltd.</b></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td colspan="2" valign="top">(Registrant)</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td valign="top">Date: March 25, 2011</td>
    <td valign="top">By:</td>
    <td style="BORDER-BOTTOM: #000000 1px solid"><I>/s/ Peter Mitchell</I></td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>Peter C. Mitchell</td>
  </tr>
  <tr>
    <td valign="top">&nbsp;</td>
    <td valign="top">&nbsp;</td>
    <td>&nbsp;</td>
  </tr>
  <tr>
    <td width="50%" valign="top">&nbsp;</td>
    <td width="5%" valign="top">Title:</td>
    <td> Chief Financial Officer </td>
  </tr>
</table>
<p>&nbsp; </p>

<hr noshade align="center" width="100%" size=5 color="Black"></BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>2
<FILENAME>exhibit99-1.htm
<DESCRIPTION>CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED DECEMBER 31, 2010
<TEXT>
<HTML>
<HEAD>
   <TITLE>Taseko Mines Ltd.: Exhibit 99.1 - Filed by newsfilecorp.com</TITLE>
   <META name="HandheldFriendly" content="true">
</HEAD>

<BODY style="font-size:10pt;">

<HR noshade align="center" width=100% size=3 color="black">
<!--$$/page=--><A name=page_1></A>
<P align=center><img src="tasekologo.jpg" width="384" height="52"></P>
<BR>
<P align=center>CONSOLIDATED FINANCIAL STATEMENTS<BR><BR><BR><BR>FISCAL PERIODS
ENDED<BR>DECEMBER 31, 2010, 2009 and 2008<BR><BR><BR><BR>(Expressed in thousands
of Canadian Dollars)<BR></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<A name=page_1></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>
  <TR vAlign=top>
    <TD align=left  rowSpan=5><img src="kpmg.gif"></TD>
    <TD align=left width="41%"><B>KPMG LLP </B></TD>
    <TD align=left width="10%">Telephone </TD>
    <TD align=left width="10%">(604) 691-3000 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="41%"><B>Chartered Accountants </B></TD>
    <TD align=left width="10%">Fax </TD>
    <TD align=left width="10%">(604) 691-3031 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="41%">PO Box 10426 777 Dunsmuir Street </TD>
    <TD align=left width="10%">Internet </TD>
    <TD align=left width="10%">www.kpmg.ca </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="41%">Vancouver BC V7Y 1K3 </TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left width="41%">Canada </TD>
    <TD align=left width="10%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp;</TD>
  </TR>
</TABLE>
<P align=justify><B><font size="3">INDEPENDENT AUDITORS' REPORT </font></B></P>
<P align=justify>To the Shareholders of Taseko Mines Limited </P>
<P align=justify>We have audited the accompanying consolidated financial
  statements of Taseko Mines Limited (the &#147;Company"), which comprise the
  consolidated balance sheets as at December 31, 2010 and 2009 and the
  consolidated statements of operations and comprehensive income (loss),
  shareholders&#146; equity and cash flows for the years ended December 31, 2010 and
  2009 and the fifteen-month period ended December 31, 2008, and notes, comprising
  a summary of significant accounting policies and other explanatory information. </P>
<P align=justify><I>Management's Responsibility for the Consolidated Financial
  Statements </I></P>
<P align=justify>Management is responsible for the preparation and fair
  presentation of these consolidated financial statements in accordance with
  Canadian generally accepted accounting principles, and for such internal control
  as management determines is necessary to enable the preparation of consolidated
  financial statements that are free from material misstatement, whether due to
  fraud or error. </P>
<P align=justify><I>Auditors&#146; Responsibility </I></P>
<P align=justify>Our responsibility is to express an opinion on these
  consolidated financial statements based on our audits. We conducted our audits
  in accordance with Canadian generally accepted auditing standards. Those
  standards require that we comply with ethical requirements and plan and perform
  the audit to obtain reasonable assurance about whether the consolidated
  financial statements are free from material misstatement. </P>
<P align=justify>An audit involves performing procedures to obtain audit
  evidence about the amounts and disclosures in the consolidated financial
  statements. The procedures selected depend on our judgment, including the
  assessment of the risks of material misstatement of the consolidated financial
  statements, whether due to fraud or error. In making those risk assessments, we
  consider internal control relevant to the Company's preparation and fair
  presentation of the consolidated financial statements in order to design audit
  procedures that are appropriate in the circumstances, but not for the purpose of
  expressing an opinion on the effectiveness of the Company's internal control. An
  audit also includes evaluating the appropriateness of accounting policies used
  and the reasonableness of accounting estimates made by management, as well as
  evaluating the overall presentation of the consolidated financial statements. </P>
<P align=justify>We believe that the audit evidence we have obtained in our
  audits is sufficient and appropriate to provide a basis for our audit opinion. </P>
<P style="MARGIN-LEFT: 40%" align=justify><FONT size=1>KPMG LLP is a Canadian
  limited liability partnership and a member firm of the KPMG <BR>
  network of
  independent member firms affiliated with KPMG International Cooperative
  (<BR>
  &#147;KPMG International&#148;), a Swiss entity. </FONT><BR>
  <FONT size=1>KPMG Canada
    provides services to KPMG LLP. </FONT></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=-->
<A name=page_2></A>
<p><img src="kpmgds.gif"></p>
<P align=right><I>Taseko Mines Limited <BR>
  Page 2 </I></P>
<P align=justify><I>Opinion </I></P>
<P align=justify>In our opinion, the consolidated financial statements present
  fairly, in all material respects, the consolidated financial position of Taseko
  Mines Limited as at December 31, 2010 and 2009, and its consolidated results of
  operations and its consolidated cash flows for the years ended December 31, 2010
  and 2009 and the fifteen-month period ended December 31, 2008 in accordance with
  Canadian generally accepted accounting principles. </P>
<P align=justify><B>KPMG LLP (signed) </B></P>
<P align=justify>Chartered Accountants </P>
<P align=justify>March 16, 2011 <BR>
  Vancouver, Canada </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_2></A>
<P align=justify><B>TASEKO MINES LIMITED</B><BR><B>Consolidated Balance
Sheets</B><BR>(Expressed in thousands of Canadian Dollars)<BR><BR></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%">December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%">December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>ASSETS</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Current assets</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Cash and equivalents </TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;211,793 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;35,082 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Restricted cash (note 13) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>3,153 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Marketable securities and investments (note 7) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">18,521 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">11,856 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Accounts receivable </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>20,154 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>12,505 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Inventory (note 5) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">21,286 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">21,792 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Prepaid expenses </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>534 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>2,112 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Advances for equipment </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">1,119 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Advances to Joint Venture (note 4)
</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>1,764 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Current
      portion of promissory note (note 16(a)) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">7,248    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">4,697    </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>281,300 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>92,316 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Advances for equipment</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>1,726 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>

    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>2,122 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Reclamation deposits (note 17)</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">23,266 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">29,421 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Promissory note (note 16(a))</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>70,559 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>73,400 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Mineral
      property interests, plant and equipment (note 10)</B> </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">310,761 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">337,836 </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>$</B></TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;687,612</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>$</B></TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;535,095</B> </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>LIABILITIES AND SHAREHOLDERS' EQUITY</B>
    </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Current liabilities</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Accounts payable and accrued liabilities </TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;22,983 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;14,821 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Amounts due to a related party (note
      11) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>154 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>13 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Current portion of long-term credit facility (note
      14) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">21,896 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Current portion of long-term loan
      obligations (note 12) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>10,315 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>5,782 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Current portion of deferred revenue (note 16) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">175 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">175 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Current portion of royalty
      obligations (note 16) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>7,248 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>11,208 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;<B>Liability under derivative instruments (note
      15)</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"><B>225</B> </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"><B>18</B>,<B>935</B> </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Income taxes payable </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>24,528 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>370 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Current
      portion of future income taxes (note 18) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">1,008    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">1,979    </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>66,636 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>75,179 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Income taxes (note 18)</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>2,500 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>32,299 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Royalty obligations (note 16)</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">51,645 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">57,621 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Deferred revenue (note 16)</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>481 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>656 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Credit facility (note 14)</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">29,609 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Loan obligations (note 12)</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>28,018 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>16,916 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Site closure and reclamation obligation (note 17)</B>
</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">8,178 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">9,807 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><B>Future income taxes (note 18)</B> </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">60,203 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">16,315 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">217,661 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">238,402 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Shareholders' equity</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Share capital (note 20) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>338,911 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>323,734 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Tracking preferred shares (note 8) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">26,642 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">26,642 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Contributed surplus </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>28,128 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>20,318 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Accumulated other comprehensive income </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">6,249 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">4,576 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp;Retained earnings (deficit) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">70,021 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(78,577</TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">469,951 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">296,693 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Commitments (note 21) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Subsequent event
      (notes 8 and 20(b)) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>$</B></TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;687,612</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>$</B></TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;535,095</B> </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
  </TR></TABLE>
<P align=left><I>See accompanying notes to consolidated financial
statements.</I></P>
<P align=justify><B>Approved by the Board of Directors</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><I>/s/ Ronald W. Thiessen</I> </TD>
    <TD align=left width="50%"><I>/s/ Russell E. Hallbauer</I> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Ronald W. Thiessen </TD>
    <TD align=left width="50%">Russell E. Hallbauer </TD></TR>
  <TR vAlign=top>
    <TD align=left>Director </TD>
    <TD align=left width="50%">Director </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_3></A>
<P align=justify><B>TASEKO MINES LIMITED<BR></B><B>Consolidated Statements of
Operations and Comprehensive Income (Loss)<BR></B>(Expressed in thousands of
Canadian Dollars, except per share amounts)</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%" >Year Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%" >Year Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%" >Fifteen Months Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    >December 31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    >December 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right width="12%"
    >December 31, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Revenue</B> </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff >&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff >&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff >&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Copper </TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom" >&nbsp;265,804 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom" >&nbsp;180,115 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom" >&nbsp;209,784 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp;Molybdenum </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >12,656 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >8,787 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >21,894 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >278,460 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >188,902 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >231,678 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Cost of sales</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >142,674 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >132,434 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >196,261 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Depletion,
      depreciation and amortization</B> </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >10,336 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >8,150 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >7,363 </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff><B>Operating profit</B> </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >125,450 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >48,318 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >28,054 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Expenses (income)</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Accretion of reclamation obligation (note 17) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >860 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >968 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >1,451 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Asset retirement obligation change of
      estimates (note 17) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >(6,917</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Change in fair value of financial instruments </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(319</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >886 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Exploration </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >10,090 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >3,407 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >11,864 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Foreign exchange loss (gain) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >2,650 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(8,800</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >4,032 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Gain on convertible bond repurchase
      (note 19) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >(1,630</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;General and administration </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >13,853 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >8,382 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >11,896 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Interest accretion on convertible
      debt (note 19) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >1,260 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >2,938 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Interest and other income </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(18,275</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(7,402</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(9,701</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Interest expense </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >4,542 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >8,265 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >8,284 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Gain on sale of marketable securities </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(4,087</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(188</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(1,034</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Loss on prepayment of credit facility
      (note 14) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >834 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Premium paid on the redemption of royalty obligation
      (note 16(b)) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >1,302 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >&#150; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Realized (gain) loss on derivative
      instruments (note 15) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >(3,575</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >11,330 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Stock-based
      compensation (note 20(c)) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >10,409 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >5,696 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >6,442 </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >18,284 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >21,288 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >30,141 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="1%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
      >&nbsp; </TD>
    <TD width="2%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
      >&nbsp; </TD>
    <TD width="2%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
      >&nbsp; </TD>
  <TD width="2%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Earnings (loss) before other items </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >107,166 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >27,030 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >(2,087</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Other items </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Gain on contribution to the Joint Venture (note 4)
</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >95,114 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >&#150; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp;Unrealized loss on derivative instruments (note 15)
    </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >(6,898</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >(15,775</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >&#150; </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Earnings (loss) before income taxes </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >195,382 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >11,255 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(2,087</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff >&nbsp; </TD>
  <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp;Current income tax expense (recovery) (note
      18) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >4,106 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >669 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(2,151</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left
      bgColor=#e6efff>&nbsp; &nbsp;Future income tax expense (recovery) (note
      18) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff >42,678 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff >25 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff >(3,446</TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="1%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid" >&nbsp; </TD>
    <TD width="2%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid" >&nbsp; </TD>
    <TD width="2%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid" >&nbsp; </TD>
  <TD width="2%" valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff><B>Net earnings for the year</B> </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid" >&nbsp;148,598 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid" >&nbsp;10,561 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid" >&nbsp;3,510 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Other comprehensive income (loss) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Unrealized gain (loss) on available-for-sale
      reclamation deposit </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(118</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(1,040</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >1,859 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Unrealized gain (loss) on
      available-for-sale marketable securities </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >6,117 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >14,263 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >(11,295</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Reclassification of realized gain sale of marketable
      securities </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(4,087</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(188</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >(1,152</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp;Tax effect </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >(239</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >(1,779</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid" >1,570 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Other
      comprehensive income (loss)</B> </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;1,673 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;11,256 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;(9,018</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">)</TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp; </TD>
    <TD width="2%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp; </TD>
    <TD width="2%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp; </TD>
  <TD width="2%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Total
      comprehensive income (loss)</B> </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;150,271 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;21,817 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;(5,508</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">)</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff >&nbsp; </TD>
  <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Earnings per share</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Basic </TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom" >&nbsp;0.80 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom" >&nbsp;0.06 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="12%" align=right valign="bottom" >&nbsp;0.02 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Diluted </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&nbsp;0.73 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&nbsp;0.06 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >&nbsp;0.02 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="12%" valign="bottom" >&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff colSpan=3><B>Weighted average number of
      common shares outstanding (expressed in thousands)</B> </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff >&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Basic </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >186,103 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >173,170 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" >142,062 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Diluted </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >203,006 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >180,835 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff >156,928 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR></TABLE>
<P align=left><I>See accompanying notes to consolidated financial
statements.</I></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_4></A>
<P align=justify><B>TASEKO MINES LIMITED</B><BR><B>Consolidated Statements of
Shareholders' Equity</B><BR>(Expressed in thousands of Canadian Dollars, except
for per share and share amounts)<BR><BR></P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap
    borderColor=#000000 align=right width="8%">Year ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap
    borderColor=#000000 align=right width="8%">Year ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom borderColor=#000000
    align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" vAlign=bottom noWrap
    borderColor=#000000 align=right width="8%">Fifteen Months Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="19%" colSpan=4>December 31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="19%" colSpan=4>December 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="8%">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" vAlign=bottom noWrap
    align=right width="8%">December 31, 2008 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left><B>Common shares</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><B><U>Number of shares</U></B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><B><U>Number of shares</U></B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD noWrap align=right width="8%"><B><U>Number of shares</U></B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance at beginning of the year </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>182,924,664</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>323,734 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>153,187,116 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>285,690 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>130,580,538 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>205,040 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Share purchase options at $1.00 per share </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">1,073,500 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">1,074 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">893,750 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">894 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Share purchase options at $1.15 per share
    </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>1,286,667 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>1,480 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>66,333 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>76 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Share purchase options at $1.71 per share </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">100,667 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">172 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">33,666 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">58 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Share purchase options at $1.90 per share
    </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>7,000 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>13 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Share purchase options at $2.07 per share </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">20,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">41 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">50,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">103 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">30,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">62 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Share purchase options at $2.17 per share
    </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>31,000 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>67 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Share purchase options at $2.18 per share </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">82,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">179 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">100,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">218 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">145,500 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">317 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Share purchase options at $2.68 per share
    </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>7,500 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>20 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Share purchase options at $3.07 per share </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">35,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">108 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">11,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">34 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">78,500 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">241 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Share purchase options at $4.03 per share
    </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>60,000 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>242 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Share purchase options at $4.09 per share </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">3,600 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">15 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Share purchase options at $4.50 per share
    </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>67,000 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>302 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>5,000 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>23 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Share purchase options at $4.77 per share </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">36,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">172 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Fair value of stock options allocated to
      shares issued on exercise </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>2,599 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>2,108 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>514 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Shares issued for the purchase of royalty interest (note
      16(b)) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">1,556,355 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">7,813 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">1,000,000 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">5,220 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Shares issued for donation </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>225,000 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>928 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Shares issued for debt conversion (note 19) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">2,612,971 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">21,318 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Equity financings at $5.20 per share, net
      of issue costs (note 20(b)) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>9,637,792 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>46,945 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Equity financings at $0.70 per share, net of issue costst
      (note 20(b)) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>

    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">9,085,715 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">5,975 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Equity financings at $1.45 per share, net
      of issue costs (note 20(b)) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>19,490,084 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>26,817 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Warrants exercised
      (note 20(b)) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">9,085,715 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">7,723    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Balance at end of the year </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">187,497,853 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">338,911 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">182,924,664 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">323,734 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">153,187,116 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">285,690 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Equity component of convertible debt</B>
    </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance at beginning of the year </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">3,832 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">13,655 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Repurchase of convertible bond (note 19)
</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>(3,832</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Convertible
      debenture conversion adjustment (note 19) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(9,823</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">)</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Balance at end of the year </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">3,832 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Tracking preferred shares</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Balance at
      beginning and end of the year </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">26,642    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">26,642    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">26,642    </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Contributed surplus</B> </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Balance at beginning of the year </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>20,318 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>14,561 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>8,633 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Stock-based compensation (note 20(c)) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">10,409 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">5,696 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">6,442 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Repurchase of convertible bond (note 19)
</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>2,169 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Fair value of
      stock options allocated to shares issued on exercise </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(2,599</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(2,108</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(514</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">)</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Balance at end of the year </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">28,128 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">20,318 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">14,561 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Accumulated other comprehensive income
      (loss)</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance at beginning of the year </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">4,576 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">(6,680</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">2,338 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Unrealized gain (loss) on reclamation
      deposits </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>(118</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>(1,040</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>1,859 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Unrealized gain (loss) on available-for-sale marketable
      securities </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">6,117 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">14,263 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">(11,295</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Reclassification of realized gain on sale
      of marketable securities </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>(4,087</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>(188</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" bgColor=#e6efff>(1,152</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Tax effect </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(239</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(1,779</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">1,570    </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Balance at end of the year </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">6,249 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">4,576 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(6,680</TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="8%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Retained earnings (deficit)</B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Balance at beginning of the year </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">(78,577</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">(89,138</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom">(92,648</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Net earnings for the year </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">148,598 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">10,561 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">3,510 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Balance at end of
      the year </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">70,021    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(78,577</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="8%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(89,138</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">)</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="8%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>TOTAL
      SHAREHOLDERS' EQUITY</B> </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"></TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$&nbsp;</TD>
    <TD
      width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">469,951 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"></TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$&nbsp;</TD>
    <TD
      width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">296,693 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"></TD>
    <TD
    width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">$&nbsp;</TD>
    <TD
      width="8%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">234,907 </TD>
<TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
  </TR></TABLE>
<P align=left><I>See accompanying notes to consolidated financial
statements.</I></P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_5></A>
<P align=justify><B>TASEKO MINES LIMITED<BR></B><B>Consolidated Statements of
Cash Flows<BR></B>(Expressed in thousands of Canadian Dollars)</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%">Year Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%">Year Ended </TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%">Fifteen Months Ended </TD>
  <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">December 31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">December 31, 2009 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%">December 31, 2008 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Operating activities</B> </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
  <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Net earnings for the year </TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;148,598 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;10,561 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >$</TD>
    <TD width="12%" align=right valign="bottom">&nbsp;3,510 </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Items not involving cash </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Accretion of reclamation obligation </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">860 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">968 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">1,451 </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Change in fair value of
      financial instruments </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(319</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>886 </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Depreciation, depletion and
      amortization </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">10,336 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">8,150 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">7,363 </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Unrealized foreign
      exchange loss (gain) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(1,760</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(8,839</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>6,334 </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Future income taxes </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">42,678 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">25 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(3,446</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Gain on contribution to
      the Joint Venture (note 4) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(95,114</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Gain on convertible debt repurchase
      (note 19) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(1,630</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Gain on sale of
      marketable securities </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(4,087</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(188</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(1,034</TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Interest accretion on convertible debt
    </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">1,260 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">2,938 </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Interest accretion on
      long-term credit facility </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>213 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>512 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Loss on prepayment of credit facility
      (note 14) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">834 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Non cash donation
      expense (note 22) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>928 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Premium paid on the redemption of
      royalty obligation (note 16(b)) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">1,302 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Reclamation obligation
      change in estimate </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(6,917</TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Site closure and reclamation
      expenditures (note 17) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(91</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(1,590</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(183</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Stock-based
      compensation </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>10,409 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>5,696 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>6,442 </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Realized loss (gain) on derivative
      instruments (note 15) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(15,775</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Unrealized loss (gain)
      on derivative instruments (note 15) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>6,898 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>15,775 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Changes in non-cash operating working capital </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Accounts payable and
      accrued liabilities </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>8,162 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(38,216</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>22,603 </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Accounts receivable </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(7,649</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(7,899</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">7,415 </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Accrued interest
      expense on royalty obligation </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(3,425</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(2,039</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(1,060</TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Accrued interest income on promissory
      note </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">291 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(1,029</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(2,632</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Amounts due to a
      related party </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>141 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(1,759</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>2,579 </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Deferred revenue </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(175</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(175</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(219</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Income taxes payable
</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(5,641</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(6,261</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>2,358 </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Inventory </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(4,730</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(1,452</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(2,282</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Advances to Joint
      Venture (note 4) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(1,764</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; &nbsp; &nbsp;Asset/liability under derivative
      instruments (note 15) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(2,502</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">3,160 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Prepaid expenses </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1,194 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(1,784</TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">741 </TD>
  <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Cash provided
      by (used for) operating activities</B> </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">89,812 </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(26,754</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >) </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">46,847 </TD>
  <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Investing activities</B> </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=left valign="bottom">&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Accrued interest income on
      reclamation deposits </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(1,293</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(1,919</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(2,032</TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Funds released from reclamation deposits </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">3,900 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">5,000 </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Funds released from restricted cash
    </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>3,153 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>1,247 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Advance payments for equipment </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(6,381</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Investment in derivative asset </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(7,331</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Investment in marketable securities </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(16,678</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(4,421</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(254</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Proceeds from contribution to the
      Joint Venture (note 4) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>186,811 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Proceeds from sale of marketable securities </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">16,449 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">9,966 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">3,360 </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Purchase of property, plant and
      equipment </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(55,303</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(17,019</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(134,186</TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Reclamation
      deposits </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(45</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >) </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
    width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(109</TD>
  <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Cash provided by (used for) investing activities </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">125,808 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(8,291</TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(134,602</TD>
  <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom" >&nbsp;</TD>
    <TD width="1%" valign="bottom" >&nbsp;</TD>
    <TD width="12%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff><B>Financing activities</B> </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Capital lease payments </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(3,320</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(3,199</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(1,061</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Common shares issued for cash, net of
      issue costs </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>3,837 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>35,937 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>53,599 </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Principal repayment of loan obligations </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(2,712</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(345</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Proceeds (repayment) of bank
      indebtedness </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>(5,737</TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>5,737 </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Proceeds from loan obligations (note 12(b)) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">14,076 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">9,054 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>&nbsp;Proceeds from royalty obligation
      (note 16(b)) </TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>6,511 </TD>
    <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom"  bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp;Proceeds (repayment) of long term credit facility
      (note 14) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(50,790</TD>
    <TD width="2%" align=left valign="bottom" >) </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">56,997 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp;Re-purchase of convertible debt (note 19) </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(33,678</TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(3,569</TD>
  <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Cash provided by
      (used for) financing activities </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(38,909</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >) </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">65,540 </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">54,706 </TD>
  <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
  <TD width="2%" valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left><B>Increase (decrease) in cash and equivalents</B> </TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">176,711 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">30,495 </TD>
    <TD width="2%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" >&nbsp;</TD>
    <TD width="12%" align=right valign="bottom">(33,049</TD>
  <TD width="2%" align=left valign="bottom" >) </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Cash and equivalents, beginning of year </TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">35,082 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">4,587 </TD>
    <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">37,636 </TD>
  <TD width="2%" align=left valign="bottom"
     bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Cash and
      equivalents, end of year</B> </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    ><B>$</B></TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;211,793</B> </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    ><B>$</B></TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;35,082</B> </TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    ><B>$</B></TD>
    <TD
      width="12%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"><B>&nbsp;4,587</B> </TD>
  <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 2px solid"
    >&nbsp;</TD>
  </TR></TABLE>
<P align=left>Supplemental cashflow information (note 22)</P>
<P align=left><I>See accompanying notes to consolidated financial
statements.</I></P>
<HR align=center width="100%" color=black noShade SIZE=5>
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<br>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>1.</B> </TD>
    <TD colSpan=2>
      <P align=justify><B>NATURE OF OPERATIONS AND BASIS OF
    PRESENTATION</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>Taseko Mines Limited (the "Company") is engaged in mining
      and mine development. The Company operates the Gibraltar copper-molybdenum
      mine and holds the Prosperity gold-copper project, the Harmony gold
      project and the Aley niobium property.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>These consolidated financial statements have been
      prepared in accordance with Canadian generally accepted accounting
      principles.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>These consolidated financial statements include the
      accounts of the Company and its subsidiaries. Interests in joint ventures
      are accounted for using the proportionate consolidation method. Under this
      method, the Company includes in its accounts the Company's proportionate
      share of assets, liabilities, revenues, and expenses. These consolidated
      financial statements include the Company's 75% interest in the Gibraltar
      Joint Venture since its formation on March 31, 2010 (note 4).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>All material intercompany accounts and transactions have
      been eliminated.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>2.</B> </TD>
    <TD colSpan=2>
      <P align=justify><B>SIGNIFICANT ACCOUNTING POLICIES</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>Cash and equivalents</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>Cash and equivalents consist of cash and highly liquid
        investments, having maturity dates of three months or less from the date
        of acquisition, that are readily convertible to known amounts of cash. At
        December 31, 2010, of the $211,793 cash and equivalents held by the
        Company, $142,154 (US$142,926) was held in United States dollar
        denominated cash and equivalents (December 31, 2009 &#150; $30,719
        (US$29,228)). Cash and equivalents excludes cash subject to restrictions
    (note 13).</P></TD>
    </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Revenue recognition</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>Revenue from the sales of metal in concentrate is
        recognized when persuasive evidence of a sales agreement exists, the title
        and risk of ownership is transferred to the customer, collection is
        reasonably assured, and the price is reasonably determinable. Revenue from
        the sales of metal may be subject to adjustment upon final settlement of
        shipment weights, assays and metal prices. Adjustments to revenue for
        metal prices are recorded monthly and other adjustments are recorded on
        final settlement. Cash received in advance of meeting these revenue
    recognition criteria is recorded as deferred revenue.</P></TD>
    </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>Under the Company&#146;s concentrate sales contracts, final
        copper and molybdenum prices are set based on a specified future
        quotational period and the average market metal price in that period.
        Typically, the quotational periods for copper are either one or four
        months after the date of arrival at the port of discharge, and three
        months after the month of shipment for molybdenum. Revenues are recorded
        under these contracts when title passes to the buyer and are based on the
        forward price for the expected settlement period. The contracts, in
        certain cases, provide for a provisional payment based upon provisional
        assays and quoted metal prices. The price adjustment features in the
        Company&#146;s receivables are treated as embedded derivatives for accounting
        purposes and as such, are marked-to-market through earnings from the date
    of sale until the date of final pricing. </P></TD>
    </TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(c)</I> </TD>
    <TD>
      <P align=justify><I>Inventory</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Production inventory consists of metal
in concentrate, copper cathode, ore-in-process and stockpiled ore. Production
inventory is valued based on the lower of average production cost and net
realizable value. Production costs include the cost of raw materials, stripping
costs, direct labour, mine-site overhead expenses and depreciation. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Materials and supplies inventory is
valued at the lower of average cost and net realizable value.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Previous write-downs to net realizable
value are reversed when there is a subsequent increase in the value of the
inventory.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(d)</I> </TD>
    <TD>
      <P align=justify><I>Financial Instruments</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>All financial instruments, including
derivatives, are included on the Company&#146;s balance sheet and measured either at
fair value or amortized cost. Changes in fair value are recognized in the net
earnings (loss) or accumulated other comprehensive income, depending on the
classification of the related instruments.</P>
<P style="MARGIN-LEFT: 5%" align=justify>All financial assets and liabilities
are recognized when the entity becomes a party to the contract creating the
asset or liability. All financial instruments are classified into one of the
following categories: held-for-trading, held-to-maturity, loans and receivables,
available-for-sale financial assets, or other financial liabilities. Initial and
subsequent measurement and recognition of changes in the value of financial
instruments depends on their initial classification:</P>
<UL style="TEXT-ALIGN: justify">

      <li><p style="margin-left:5%">Held-to-maturity investments, loans and receivables, and other financial
        liabilities are initially measured at fair value and subsequently measured at
        amortized cost. Amortization of premiums or discounts and losses due to
        impairment are included in current period net earnings (loss). </p></li>
      <li><p style="margin-left:5%">Available-for-sale financial assets are measured at fair value. Changes in
        fair value are included in other comprehensive income (loss) until the gain or
        loss is recognized in net earnings (loss) or if an impairment is determined to
        be other than temporary.</p> </li>
      <li><p style="margin-left:5%">Held-for-trading financial instruments are measured at fair value. All
        changes in fair value are included in net earnings (loss) in the period in
        which they arise. </p></li>
      <li><p style="margin-left:5%">All derivative financial instruments are measured at fair value, even when
        they are part of a hedging relationship. Changes in fair value are included in
        net earnings (loss) in the period in which they arise, except for cash flow
        hedge transactions which qualify for hedge accounting treatment in which case
        gains and losses are recognized in other comprehensive income (loss). </p></li>

</UL>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<A name=page_2></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company had classified its
financial instruments as follows: </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 2px solid"
    noWrap borderColor=#000000 align=left><B>Financial Instrument</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 2px solid"
    noWrap borderColor=#000000 align=left width="25%"><B>Classification</B>
</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 2px solid"
    noWrap borderColor=#000000 align=right width="25%"><B>Measurement</B>
  </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Cash and equivalents </TD>
    <TD align=left width="25%" bgColor=#e6efff>Held-for-Trading </TD>
    <TD align=right width="25%" bgColor=#e6efff>Fair Value </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left>Restricted cash </TD>
    <TD align=left width="25%">Held-for-Trading </TD>
    <TD align=right width="25%">Fair Value </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff></TD>
    <TD align=left bgColor=#e6efff>Marketable securities and investments,
      except for derivative instruments </TD>
    <TD align=left width="25%" bgColor=#e6efff>Available for Sale </TD>
    <TD align=right width="25%" bgColor=#e6efff>Fair Value </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#ffffff>Accounts receivable </TD>
    <TD align=left width="25%" bgColor=#ffffff>Loans and Receivables </TD>
    <TD align=right width="25%" bgColor=#ffffff>Amortized cost </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Advances to Joint Venture </TD>
    <TD align=left width="25%" bgColor=#e6efff>Loans and Receivables </TD>
    <TD align=right width="25%" bgColor=#e6efff>Amortized cost </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#ffffff>Reclamation deposits </TD>
    <TD align=left width="25%" bgColor=#ffffff>Available for Sale </TD>
    <TD align=right width="25%" bgColor=#ffffff>Fair Value </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Promissory note </TD>
    <TD align=left width="25%" bgColor=#e6efff>Loans and Receivables </TD>
    <TD align=right width="25%" bgColor=#e6efff>Amortized cost </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#ffffff>Accounts payable and accrued liabilities
</TD>
    <TD align=left width="25%" bgColor=#ffffff>Other Financial Liability </TD>
    <TD align=right width="25%" bgColor=#ffffff>Amortized cost </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Amounts due to a related party </TD>
    <TD align=left width="25%" bgColor=#e6efff>Other Financial Liability </TD>
    <TD align=right width="25%" bgColor=#e6efff>Amortized cost </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#ffffff>Loan obligations </TD>
    <TD align=left width="25%" bgColor=#ffffff>Other Financial Liability </TD>
    <TD align=right width="25%" bgColor=#ffffff>Amortized cost </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Credit facility </TD>
    <TD align=left width="25%" bgColor=#e6efff>Other Financial Liability </TD>
    <TD align=right width="25%" bgColor=#e6efff>Amortized cost </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD align=left bgColor=#ffffff>Royalty obligation </TD>
    <TD align=left width="25%" bgColor=#ffffff>Other Financial Liability </TD>
    <TD align=right width="25%" bgColor=#ffffff>Amortized cost </TD></TR>
  <TR vAlign=top>
    <TD width="5%" bgColor=#ffffff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Derivative instruments </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="25%"
    bgColor=#e6efff>Held-for-Trading </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="25%"
    bgColor=#e6efff>Fair Value </TD></TR></TABLE><BR>
<table
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellspacing=0 cellpadding=0 width="100%" border=0>
  <tr valign=top>
    <td width="5%" >&nbsp;</td>
    <td align=left><i>(e)</i> </td>
    <td align=left width="90%"><i>Plant and equipment</i> </td>
  </tr>
</table>
<P style="MARGIN-LEFT: 5%" align=justify>Plant and equipment are stated at cost
less accumulated amortization. Mining and milling assets are amortized using the
units of production method based on tons mined and milled, respectively. During
2008, the Company extended the life of its Gibraltar mine. Consequently, the
useful life over which the Company&#146;s mining and milling assets are depreciated
has been extended to reflect their additional use from an extended mine life.
Amortization for all other assets is calculated using the declining balance
method at rates ranging from 10% to 50% per annum. Repairs and maintenance
expenditures are charged to operations as incurred. Major improvements and
replacements which extend the useful life of the asset are capitalized as
incurred.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The costs of removing overburden
material to access mineral reserve deposits, referred to as &#147;stripping costs&#148;,
are accounted for as variable production costs to be included in the cost of
inventory produced, unless the overburden removal activity can be shown to be a
betterment of the mineral property, in which case these costs are capitalized.
Betterment occurs when the overburden removal activity provides access to
additional sources of mineral deposit reserves that will be produced in future
periods which would not have otherwise been accessible in the absence of the
pre-stripping activity. These deferred stripping costs are amortized using the
units of production basis to cost of sales over the life of the mineral deposit
reserves.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><I>(f)</I> </TD>
    <TD align=left width="90%"><I>Mineral property interests</I>
</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company capitalizes mineral
property acquisition costs on a property-by-property basis. Exploration
expenditures and option payments incurred prior to the determination of the
feasibility of mining operations are charged to operations as incurred.
Exploration expenditures which increase production or extend the life of
operations are capitalized.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company capitalizes development
expenditures which have (a) a probable future benefit which the Company can
obtain, (b) result from a past transaction, and (c) occur on property controlled
by the Company on mineralized ore bodies that have, or are determined to have as
a result of these costs, economically mineable mineral reserves. Acquisition
costs and development expenditures are amortized over the estimated life of the
property, or written off to operations if the property is abandoned, allowed to
lapse, or if there is little prospect of further work being carried out by the
Company.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Mineral property acquisition costs
include the cash consideration and the fair market value of common shares issued
for mineral property interests pursuant to the terms of the relevant agreement.
Payments relating to a property acquired under an option or joint venture
agreement, where such payments are made at the sole discretion of the Company,
are recorded in the accounts upon payment.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Costs incurred subsequent to the
determination of the feasibility of the processing technology will be
capitalized and amortized over the life of the related plant.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The amount presented for mineral
property interests represents costs incurred to date less write-downs and
accumulated amortization, and does not necessarily reflect present or future
values.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><I>(g)</I> </TD>
    <TD align=left width="90%"><I>Site closure and reclamation costs</I>
  </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company recognizes any statutory,
contractual or other legal obligation related to the retirement of tangible
long-lived assets when such obligations are incurred, if a reasonable estimate
of fair value can be made. These obligations are measured initially at fair
value and the resulting costs are capitalized to the carrying value of the
related asset. In subsequent periods, the liability is adjusted for the
accretion of the discount and any changes in the amount or timing of the
underlying future cash flows. The asset retirement cost is amortized to
operations over the life of the asset. Changes resulting from revisions to the
timing or the amount of the original estimate of undiscounted cash flows are
recognized as an increase or a decrease in the carrying amount of the liability
and the related asset retirement cost. In the event the required decrease in the
asset retirement cost is in excess of the carrying value, the excess amount is
recorded as a change in estimate in the net earnings (loss).</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><I>(h)</I> </TD>
    <TD align=left width="90%"><I>Impairment of long-lived assets</I>
  </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Long-lived assets, including mineral
property interests, plant and equipment, are reviewed for impairment whenever
events or changes in circumstances indicate that the carrying amount of an asset
may not be recoverable. Recoverability of assets to be held and used is measured
by a comparison of the carrying amount of an asset to estimated undiscounted
future cash flows expected to be generated by the asset. If the carrying amount
of an asset exceeds its estimated future cash flows, an impairment charge is
recognized in the amount by which the carrying amount of the asset exceeds the
fair value of the asset.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>

<!--$$/page=--><A name=page_2></A><br>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><br>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><I>(i)</I> </TD>
    <TD align=left width="90%"><I>Share capital</I> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company records proceeds from
share issuances net of issue costs. Shares issued for consideration other than
cash are valued at the quoted market price on the date of issue.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><I>(j)</I> </TD>
    <TD align=left width="90%"><I>Stock-based compensation</I>
</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has a share option plan
which is described in note 20(c). The Company records all stock-based payments
using the fair value method. Under the fair value method, stock-based payments
are measured at the fair value of the consideration received or the fair value
of the equity instruments issued or liabilities incurred, whichever is more
reliably measurable, and are charged to operations over the vesting period. The
offset is credited to contributed surplus.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Consideration received on the exercise
of stock options is recorded as share capital and the related contributed
surplus is transferred to share capital. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><I>(k)</I> </TD>
    <TD align=left width="90%"><I>Income taxes</I> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company uses the asset and
liability method of accounting for income taxes. Under this method, future
income tax assets and liabilities are computed based on differences between the
carrying amounts of assets and liabilities on the balance sheet and their
corresponding tax values, generally using the substantively enacted or enacted
income tax rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. Future income tax
assets also result from unused loss carry forwards, resource-related pools, and
other deductions. Future income tax assets are recognized to the extent that
they are considered more likely than not to be realized. The valuation of future
income tax assets is adjusted, if necessary, by the use of a valuation allowance
to reflect the estimated realizable amount.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><I>(l)</I> </TD>
    <TD align=left width="90%"><I>Functional currency and foreign currency
      translations</I> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company&#146;s functional currency is
the Canadian dollar as it is the currency of the primary economic environment in
which the Company operates. While the Company receives its metal sales revenues
in United States dollars, the majority of the Company&#146;s supplies, labour, and
services are denominated in Canadian dollars. All of the business operations of
the Company are located in Canada.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Foreign currency monetary assets and
liabilities are translated into Canadian dollars at the exchange rate in effect
at the balance sheet date. Non-monetary assets, liabilities, revenues and
expenses are translated into Canadian dollars at the rate of exchange prevailing
on the respective dates of the transactions. Foreign exchange gains and losses
are included in net earnings (loss). </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left><I>(m)</I> </TD>
    <TD align=left width="90%"><I>Earnings (loss) per common share</I>
  </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Basic earnings (loss) per common share
is based on the weighted average number of common shares outstanding during the
period.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Diluted earnings (loss) per share is
calculated using the treasury stock method, whereby all &#147;in-the-money&#148; options,
warrants and equivalents are assumed to have been exercised at the beginning of
the period and the proceeds from the exercise are assumed to have been used to
purchase common shares at the average market price during the year. Dilution for
convertible bonds and debentures is calculated on an if-converted basis.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>

<P><!--$$/page=--><!--$$/page=--><A name=page_2></A><br>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left ><I>(n)</I> </TD>
    <TD align=left width="90%"><I>Use of estimates</I> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The preparation of financial
statements requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and the disclosure of contingent
assets and liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting year. Significant areas
requiring the use of management estimates relate to the impairment of mineral
property interests, plant and equipment, reclamation liability, income taxes,
valuation allowances for future income tax assets, rates for depletion,
depreciation and amortization, assumptions used in computing stock-based
compensation, receivables from sales of concentrate and valuation of concentrate
inventory, the determination of mineral reserves and mine life and the
estimation of the fair value of derivative liabilities. Actual results could
differ from these estimates.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left ><I>(o)</I> </TD>
    <TD align=left width="90%"><I>Segment disclosures</I> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company operates in a single
reportable operating segment, the exploration, development and operation of
mineral property interests, within the geographic area of British Columbia,
Canada.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>3.</B> </TD>
    <TD>
      <P align=justify><B>CHANGES IN ACCOUNTING
POLICIES</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>New Accounting Standards Adopted:</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As a result of the Company&#146;s joint venture over the
      Gibraltar mine (note 4) on March 31, 2010, the Company has adopted the
      following standard on a prospective basis.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><I>CICA 3055 &#150; "Interests in Joint
Ventures"</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company's interests in jointly controlled assets are
      accounted for using proportionate consolidation. The Company combines its
      share of the joint venture&#146;s individual income and expenses, assets and
      liabilities and cash flows on a line-by-line basis with similar items in
      the Company's financial statements. The Company recognizes the portion of
      gains or losses on the sale of assets by the Company to the joint venture
      that is attributable to the other venturers. The Company does not
      recognize its share of profits or losses from the joint venture that
      result from the Company's purchase of assets from the joint venture until
      it resells the assets to an independent party. However, a loss on the
      transaction is recognized immediately if the loss provides evidence of a
      reduction in the net realizable value of current assets, or an impairment
      loss.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>New Accounting Standards Not Yet
Adopted:</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify><B>(i) International Financial Reporting Standards
      ("IFRS")</B></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Accounting Standards Board ("AcSB") has announced its
      decision to replace Canadian generally accepted accounting principles
      ("Canadian GAAP") with IFRS for all Canadian publicly-listed companies.
      The AcSB announced that the changeover date will commence
  for interim and annual financial statements relating to fiscal
years beginning on or after January 1, 2011. The transition date for the Company
to changeover to IFRS will be January 1, 2010. Therefore, the IFRS adoption will
require the restatement for comparative purposes of amounts reported by the
Company for the year ending December 31, 2010. The Company has already
established a formal project plan, allocated internal resources and engaged
expert consultants, monitored by a steering committee to manage the transition
from Canadian GAAP to IFRS reporting.</P></TD></TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
otherwise) </TD></TR></TABLE>
<br>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top><B>(ii)</B> <B>Business Combinations, Consolidated
      Financial Statements, and Non-Controlling
Interests</B></TD></TR></TABLE>
<P style="MARGIN-LEFT: 10%" align=justify>The AcSB issued CICA Sections 1582,
<I>Business Combinations</I>, 1601, <I>Consolidated Financial Statements</I>,
and 1602, <I>Non-Controlling Interests</I>, which superseded current Sections
1581, </P>
<P style="MARGIN-LEFT: 10%" align=justify><I>Business Combinations</I>, and
1600, <I>Consolidated Financial Statements</I>. These new Sections replace
existing guidance on business combinations and consolidated financial statements
to harmonize Canadian accounting for business combinations with IFRS. These
Sections will be applied prospectively to business combinations for which the
acquisition date is on or after the beginning of the first annual reporting
period beginning on or after January 1, 2011. Earlier adoption is permitted. If
an entity applies these Sections before January 1, 2011, it is required to
disclose that fact and apply each of the new sections concurrently. </P>
<P style="MARGIN-LEFT: 10%" align=justify>The Company did not elect to early
adopt this standard and will adopt IFRS 3 <I>Business Combinations </I>in
accordance with IFRS effective January 1, 2011. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>4.</B> </TD>
    <TD>
      <P align=justify><B>GIBRALTAR JOINT VENTURE</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On March 31, 2010 (the "Effective Date"), the Company
      entered into a Joint Venture Formation Agreement (the "JVFA") with Cariboo
      Copper Corp. ("Cariboo") to establish an unincorporated joint venture, the
      Gibraltar Joint Venture (the "Joint Venture"), over the Gibraltar mine.
      The Company and Cariboo (the "Venturers") hold a 75% and a 25% beneficial
      interest in the Joint Venture, respectively.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Under the JVFA, the Company contributed certain assets
      and liabilities of the Gibraltar mine with a deemed fair value of $747,245
      to the Joint Venture on the Effective Date. Cariboo paid the Company
      $186,811 to acquire a 25% interest in the Joint Venture. The Company
      continues to be the operator of the Gibraltar mine under a Joint Venture
      Operating Agreement.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The assets and liabilities contributed by the Company to
      the Joint Venture were mineral property interests, plant and equipment,
      inventory, prepaid expenses, reclamation deposits, capital lease
      obligations, and site closure and reclamation obligations.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>As part of the JVFA, the Company and Cariboo have votes
      equal to their interest in the Joint Venture. However, certain key
      strategic, operating, investing and financing policies of the Joint
      Venture require unanimous approval from the Venturers such that neither of
      the Venturers is in a position to exercise unilateral control over the
      Joint Venture.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The total gain on the Company's contribution to the Joint
      Venture was $389,528, of which $95,114 (net of purchase price allocation
      adjustments) was recognized based on the 25% investment by Cariboo. The remaining 75% of the gain related to
the Company's interest in the Joint Venture has been eliminated upon
consolidation.</P></TD></TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_8></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company&#146;s 75% interest in the
assets and liabilities of the Joint Venture as at December 31, 2010 are as
follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    noWrap borderColor=#000000 align=right width="12%"><B>December 31,
      2010</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Assets </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp;Current assets </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;97,713 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;Advances for equipment </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,188 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp;Reclamation deposits </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">22,977 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;Mineral property interests, plant and
      equipment, net </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>301,219 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Liabilities </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp;Current liabilities </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;29,538 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;Long-term liabilities </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>28,019 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp;Site closure
      &amp; reclamation obligation </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%">8,178
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Included within the Company&#146;s statement
of operations and comprehensive income (loss) for the year ended December 31,
2010 is the Company's 75% interest in the operations of the Joint Venture since
inception on March 31, 2010. This 75% interest is summarized as follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%"><B>Year ended</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%"><B>December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Revenues </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;194,370 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Operating expenses </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">97,461 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Depreciation and depletion </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>7,092 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Other expenses </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">4,867 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Other comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>39 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Total
      comprehensive income</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%"><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%"><B>&nbsp;84,911</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Included within the cash flows of the
Company for the year ended December 31, 2010, is the Company's 75% interest in
the cash flows of the Joint Venture. This 75% interest is summarized as
follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=right width="12%"><B>Year ended</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" noWrap borderColor=#000000
    align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%"><B>December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Operating activities </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;93,103 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Investing activities </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(44,496</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Financing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>8,270 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>During the period, the Company advanced
to the Joint Venture $7,055 to fund operations of the Gibraltar mine. These
amounts were not recovered from the Venturers as part of the routine monthly
cash calls. The Company is currently reporting a receivable at December 31,
2010, of $1,764 (25%) from the Joint Venture in its consolidated financial
results.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>

<P><!--$$/page=--><A name=page_9></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>5.</B> </TD>
    <TD>
      <P align=justify><B>INVENTORY</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    noWrap borderColor=#000000 align=right width="12%"><B>December 31</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    noWrap borderColor=#000000 align=right width="12%"><B>December 31</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%"><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" noWrap align=right
      width="12%"><B>2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Metal in concentrate - copper </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;7,515 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;5,830 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Ore in-process </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1,514 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">1,897 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Copper cathode </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>982 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>178 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Metal in concentrate - molybdenum </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">53 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">70 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Materials and supplies </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>11,222 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>13,817 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%"><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%"><B>&nbsp;21,286</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%"><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%"><B>&nbsp;21,792</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The amount of inventory recognized as
an expense for the years ended December 31, 2010 and 2009 is represented by the
amount of cost of sales before reversals of inventory write-downs. There have
been no write-downs of inventory during the years ended December 31, 2010 and
2009.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>6.</B> </TD>
    <TD colSpan=2>
      <P align=justify><B>CAPITAL MANAGEMENT AND FINANCIAL
  INSTRUMENTS</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>Capital Management Objectives</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>The Company's primary objective when managing capital is
        to ensure that the Company is able to continue its operations and that it
        has sufficient ability to satisfy its capital obligations and ongoing
        operational expenses, as well as to have sufficient liquidity available to
    fund suitable business opportunities as they arise.</P></TD>
    </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>The Company considers the components of shareholders'
        equity, as well as its cash and equivalents, credit facilities, and
        long-term loans obligations as capital. The Company manages its capital
        structure and makes adjustments to it in 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 equity,
        sell assets, or return capital to shareholders as well as issue or repay
    debt.</P></TD>
    </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>In order to facilitate the management of its capital
        requirements, the Company prepares annual operating budgets that are
        approved by the Board of Directors. Management also actively monitors its
    financial covenants to ensure compliance.</P></TD>
    </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>The Company&#146;s investment policy is to invest its cash in
        highly liquid short-term interest-bearing investments, having maturity
        dates of three months or less from the date of acquisition and that are
    readily convertible to known amounts of cash.</P></TD>
    </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>There were no changes to the Company's approach to
    capital management during the year ended December 31, 2010.</P></TD>
    </TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Carrying Amounts and Fair Values of Financial
      Instruments</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD colspan="2">
      <P align=justify>The fair value of a financial instrument is the price at
        which a party would accept the rights and/or obligations of the financial
        instrument from an independent third party. Given the
        varying influencing factors, the reported fair values are only
        indicators of the prices that may actually be realized for these financial
    instruments. </P></TD>
</TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_10></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Financial instruments measured at fair
value are classified into one of three levels in the fair value hierarchy
according to the relative reliability of the inputs used to estimate the fair
values. The three levels of the fair value hierarchy are:</P>
<UL style="TEXT-ALIGN: justify">

      <li><p style="margin-left:5%">Level 1 &#150; Unadjusted quoted prices in active markets for identical assets
        or liabilities; </p></li>
      <li><p style="margin-left:5%">Level 2 &#150; Inputs other than quoted prices that are observable for the
        asset or liability either directly or indirectly; and </p></li>
      <li><p style="margin-left:5%">Level 3 &#150; Inputs that are not based on observable market data. </p></li>

</UL>
<P style="MARGIN-LEFT: 5%" align=justify>The fair value of accounts receivable,
advances for equipment, advances to Joint Venture, accounts payable and accrued
liabilities and income taxes payable approximate carrying values due to the
short-term nature of these items.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The fair values of the tracking
preferred shares are not readily determinable with sufficient reliability due to
the lack of availability of appropriate market information. It is not
practicable to determine the fair value of advances from related parties because
of the related party nature of such amounts and the absence of a secondary
market for such instruments. The fair value of the promissory note is not
readily determinable with sufficient reliability due to the uncertainty around
the maturities and the future cash flows associated with the promissory
note.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Aside from the financial instruments
mentioned above, the following table illustrates the classification of the
Company&#146;s financial instruments recorded at fair value within the fair value
hierarchy as at December 31, 2010 and 2009:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center
      colSpan=13><B>Financial assets at fair value</B> </TD></TR>
  <TR vAlign=top>
    <TD width="5%" style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="10%" align=right noWrap style="BORDER-BOTTOM: #000000 1px solid"><B>Level 1</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="10%" align=right noWrap style="BORDER-BOTTOM: #000000 1px solid"><B>Level 2</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="10%" align=right noWrap style="BORDER-BOTTOM: #000000 1px solid"><B>Level 3</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD>
    <TD width="12%" align=right noWrap style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2010</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Cash and equivalents </TD>
    <TD align=left  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;211,793 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;: </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;: </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;211,793 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=right>Restricted cash (note 13) </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="10%">: </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">: </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">: </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">: </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>Warrants held in other public company (note 7) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>599 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>599 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=right>Held-for-trading </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="10%">211,793 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">599 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">: </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">212,392 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD  bgColor=#e6efff>&nbsp;</TD>
    <TD  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=right>Marketable securities and investments (note 7) </TD>
    <TD align=left >&nbsp;</TD>
    <TD align=left >&nbsp;</TD>
    <TD align=right width="10%">17,922 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">: </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">: </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">17,922 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>Reclamation deposits </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>23,266 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>: </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>23,266 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD
      align=right>Available-for-sale financial assets </TD>
    <TD align=left
    >&nbsp;</TD>
    <TD align=left
    >&nbsp;</TD>
    <TD align=right
      width="10%">41,188 </TD>
    <TD align=left width="2%"
    >&nbsp;</TD>
    <TD align=left width="1%"
    >&nbsp;</TD>
    <TD align=right width="10%">: </TD>
    <TD align=left width="2%"
    >&nbsp;</TD>
    <TD align=left width="1%"
    >&nbsp;</TD>
    <TD align=right width="10%">: </TD>
    <TD align=left width="2%"
    >&nbsp;</TD>
    <TD align=left width="1%"
    >&nbsp;</TD>
    <TD align=right
      width="12%">41,188 </TD>
    <TD align=left width="2%"
    >&nbsp;</TD>
  </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%"  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="2%"  bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>Total financial
      assets at fair value </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;252,981 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;599 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;: </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%">&nbsp;253,580 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_11></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center colSpan=10><B>Financial
      liabilities at fair value</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 1</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 2</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 3</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2010</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>Liability under derivative financial instruments (note 15)    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>-</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>&nbsp;225 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>-</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>&nbsp;225 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center colSpan=10><B>Financial
      assets at fair value</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 1</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 2</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 3</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2009</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Cash and equivalents </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>$</TD>
    <TD align=right bgColor=#e6efff>&nbsp;35,082 </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>$</TD>
    <TD align=right bgColor=#e6efff>&nbsp;-</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>$</TD>
    <TD align=right bgColor=#e6efff>-</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>$</TD>
    <TD align=right bgColor=#e6efff>&nbsp;35,082 </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Restricted cash
      (note 13) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>3,153    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>-</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>-</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>3,153    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Held for trading </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>38,235 </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>-</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>-</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>38,235 </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Marketable securities and investments
      (note 7) </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>11,856 </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>-</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>-</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=right bgColor=#e6efff>11,856 </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Reclamation
      deposits </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>29,421    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>-</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>29,421    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=right
      bgColor=#e6efff>Available for sale financial assets </TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD align=right
    bgColor=#e6efff>41,277 </TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD align=right
    bgColor=#e6efff>-</TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD align=right
    bgColor=#e6efff>- </TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD align=right
    bgColor=#e6efff>41,277 </TD>
    <TD align=left
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>Total financial assets at fair value </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>&nbsp;79,512 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>-</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>&nbsp;- </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>&nbsp;79,512 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center colSpan=10><B>Financial
      liabilities at fair value</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 1</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 2</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="10%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>Level 3</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="12%" align=right style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2009</B> </TD>
    <TD width="2%" align=left style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>Liability under derivative financial instruments (note 15)    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>&nbsp;-</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>&nbsp;18,935 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>-</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    bgColor=#e6efff>&nbsp;18,935 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(c)</I> </TD>
    <TD>
      <P align=justify><I>Financial Instrument Risk Exposure and Risk
      Management</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company is exposed in varying degrees of financial
      instrument related risks. The Board approves and monitors the risk
      management processes, including treasury policies, counterparty limits,
      controlling and reporting structures. The types of risk exposure and the
      way in which such exposure is managed are provided as follows:</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%" align="center"><i>(i)</i></TD>
    <TD>
      <P align=justify><I> Credit Risk</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Credit risk is the risk of potential loss to the Company
      if a customer or counterparty to a financial instrument fails to meet its
      contractual obligations. The Company is exposed to credit risk from its
      receivables and marketable securities and investments. In general, the
      Company manages its credit exposure by transacting only with reputable
      counterparties. The Company monitors the financial condition of its
      customers and counterparties to contracts.</P></TD></TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_12></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%" align="center" vAlign=top><em>(ii)</em></TD>
    <TD>
      <P align=justify><EM>Liquidity Risk</EM></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Liquidity risk is the risk that the company will not be
      able to meet its financial obligations as they become due. The company
      manages liquidity risk by holding sufficient cash and cash equivalents and
      scheduling long-term obligations in the future based on estimated cash
      inflows.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During the year, the Company entered into long-term
      equipment loans for $14,076 (note 12(b)). The Company also entered into a
      $12,923 5-year capital lease agreement for mobile equipment.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The following are the principal contractual maturities of
      financial liabilities:</P></TD></TR></TABLE>
<BR>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="7%"><B>Contractual</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="7%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="7%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="7%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="7%"><B>Over 3</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B>As at December
      31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>Obligations</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>2012</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>2013</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Accounts payable and accrued liabilities
    </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;22,983 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;22,983 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=right>Amounts due to a related party (note 11) </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">154 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">154 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>Long-term equipment loan (note 12(b)) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff>18,020 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff>4,961 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff>6,828 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff>3,672 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%"
    bgColor=#e6efff>2,559 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>Total liabilities
    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;41,157 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;28,098 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;6,828 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;3,672 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="7%">&nbsp;2,559 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE> <BR>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="10%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="7%"><B>Contractual</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="7%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="7%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="7%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="7%"><B>Over 3</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right><B>As at December
      31, 2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>Obligations</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>2012</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="7%"><B>years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Accounts payable and accrued liabilities
    </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;14,821 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;14,821 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="7%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=right>Amounts due to a related party </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">13 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">13 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="7%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Long-term credit facility (note 14) </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>52,550 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>21,896 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>26,275 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>4,379 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="7%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Long-term
      equipment loan (note 12(b)) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">10,112
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">2,701
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">2,701
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">4,710
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="7%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="10%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>Total liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;77,496 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;39,431 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;28,976 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;9,089 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="7%"
    bgColor=#e6efff>&nbsp;&#150; </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE> <BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%" align="center" vAlign=top><i>(iii)</i></TD>
    <TD colSpan=2>
      <P align=justify><I> Market Risk</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD colSpan=2>
      <P align=justify>The significant market risk exposures to which the
      Company is exposed are commodity price risk, foreign exchange risk, and
      interest rate risk.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD vAlign=top width="5%"><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>Commodity Price Risk</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During the year, the Company entered into producer put
      option contracts with Credit Suisse AG (&#147;Credit Suisse&#148;) and Goldman Sachs
      (&#147;Goldman&#148;) for a portion of its targeted copper production to June 2011
      from its Gibraltar mine (note 15).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>A 10% strengthening or weakening of copper and molybdenum
      prices during the periods ended December 31, 2010, December 31, 2009 and
      December 31, 2008 would have affected net earnings by the amounts shown
      below. This analysis assumes that all other variables remain
    constant.</P></TD></TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="20%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%"><B>December</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%"><B>December</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%"><B>December</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="20%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>31, 2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>31, 2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="20%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Net Earnings before income taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;27,514 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;16,180 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;23,168 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_13></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Foreign Exchange Risk</I></P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company had no foreign currency hedges in place
      during the year.</P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company's financial assets held in US dollars (stated
      in Canadian dollars) were:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right><B>Carrying value</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="12%"><B>December 31, 2010</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="12%"><B>December 31, 2009</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Cash and equivalents </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;142,154 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;30,719 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right>Restricted cash </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=right width="12%">&#150; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=right width="12%">3,153 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>Accounts receivable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>16,811 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>10,802 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>Total financial
      assets </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%">&nbsp;158,965 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%">&nbsp;44,674 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>The Company's financial liabilities
held in US dollars (stated in Canadian dollars) were:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right><B>Carrying value</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="12%"><B>December 31, 2010</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="12%"><B>December 31, 2009</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR>
    <TD width="15%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Accounts payable and accrued liabilities
    </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;1,200 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="2%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;705 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right>Derivative liability (note 15 ) </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=right width="12%">225 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=right width="12%">18,935 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>Long-term credit facility (note 14) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>- </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>51,505 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right>Total financial
      liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%">&nbsp;1,425 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%">&nbsp;71,145 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>The following exchange rates applied
during the years ended December 31, 2010 and December 31, 2009:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="23%" colSpan=4><B>Annual Average
      rate</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="23%" colSpan=4><B>Year end spot
      rate</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%"><B>December 31,</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%"><B>December 31,</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%"><B>December 31,</B> </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%"><B>December 31,</B> </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>CAD vs. USD </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>1.0301 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>1.1420 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>0.9946 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>1.0510 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>All of the Company&#146;s revenues are
denominated in US dollars. A 10% weakening or strengthening of the Canadian
dollar against the US dollar during the periods presented below would have
affected net earnings by the amounts shown below. This analysis assumes that all
other variables remain constant.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="20%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="9%"><B>December</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="9%"><B>December</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="9%"><B>December</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="20%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%"><B>31,
      2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%"><B>31,
      2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%"><B>31,
      2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="20%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Net earnings before income taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;29,385 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;13,276 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;12,613 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="10%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(c)</I> </TD>
    <TD>
      <P align=justify><I>Interest Rate Risk</I></P></TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="10%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The long-term equipment loans (note 12(b)) carry fixed
      interest rates ranging between 5.35% and 8.63% per annum and as such are
not subject to fluctuations in interest rates.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_14></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<P style="MARGIN-LEFT: 15%" align=justify>The exposure of the Company's
financial assets to interest rate risk as at December 31, 2010 is as
follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="10%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="10%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%">Weighted </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">average period </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">for which the </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">effective interest </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">interest rate is </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">Total
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">rate
      (percent) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">fixed
      (years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Financial assets subject to floating
      interest rates </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;211,793 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>0.70 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right>Financial assets subject to fixed interest rates </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">101,073 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">5.91 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">5.85 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Equity investments </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>18,521 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Accounts
      receivables </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">20,154 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">N/A
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">N/A
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>Total financial assets </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;351,541 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="10%"
    bgColor=#e6efff>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>The exposure of the Company's
financial assets to interest rate risk as at December 31, 2009 is as
follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="10%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="10%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%">Weighted </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">average period </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">average effective </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">for which the </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">interest rate </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">interest rate is </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">Total
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">(percent) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">fixed
      (years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Financial assets subject to floating
      interest rates </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;35,082 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>0.32 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right>Financial assets subject to fixed interest rates </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">107,518 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">6.22 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">6.44 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Equity investments </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>11,856 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Trade and other
      receivables </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">12,505 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">N/A
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">N/A
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>Total financial assets </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;166,961 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="10%"
    bgColor=#e6efff>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>The exposure of the Company's
financial liabilities to interest rate risk at December 31, 2010 is as
follows:</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="15%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="10%" >&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="10%" >&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%" >Weighted </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="10%" >&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%" >&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%" >&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%" >&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%" >&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >period for </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%" >&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >which the </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >average </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%" >&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >effective </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >interest rate </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >period until </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%" >&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >interest rate </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >is fixed </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >maturity </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    >Total </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    >(percent) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    >(years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    >(years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Financial liabilities subject to floating
      interest rates </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff >&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff >N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff >N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff >N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right>Financial liabilities subject to fixed interest rates </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >18,020 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >7.50 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >2.37 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%" >2.37 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Derivative liability </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff >225 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff >N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff >N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff >N/A </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Other liabilities
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    >23,136 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    >N/A </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    >N/A </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    >N/A </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>Total financial liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff >&nbsp;41,381 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="10%"
    bgColor=#e6efff >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="10%"
    bgColor=#e6efff >&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="10%"
    bgColor=#e6efff >&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE> <BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_15></A>
<BR>
<table
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellspacing=0 cellpadding=0 width="100%" border=0>
  <tr valign=top>
    <td align=left><b>TASEKO MINES LIMITED</b> </td>
  </tr>
  <tr valign=top>
    <td align=left>Notes to the Consolidated Financial Statements </td>
  </tr>
  <tr valign=top>
    <td align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </td>
  </tr>
  <tr valign=top>
    <td style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </td>
  </tr>
</table>
<P style="MARGIN-LEFT: 15%" align=justify>The exposure of the Company's
financial liabilities to interest rate risk at December 31, 2009 is as
follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="9%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="9%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="9%">Weighted </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="9%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="9%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="9%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">average </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="9%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="9%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">Weighted </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">period for </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">Weighted </TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="9%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">average </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">which the </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">average </TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="9%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">effective </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">interest rate </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">period until </TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="9%">&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">interest rate </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">is fixed </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">maturity </TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">Total
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="9%">(percent) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="9%">(years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="9%">(years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Financial liabilities subject to floating
      interest rates </TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="9%" bgColor=#e6efff>&nbsp;51,505 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>6.92 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>2.09 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right>Financial liabilities subject to fixed interest rates </TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">15,221 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">7.49 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">2.62 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">2.62 </TD>
    <TD align=left width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD align=right bgColor=#e6efff>Derivative liability </TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>18,935 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>N/A </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Other liabilities
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">14,834
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">N/A
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">N/A
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">N/A
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      bgColor=#e6efff>Total financial liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;100,495 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="9%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="9%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="9%"
    bgColor=#e6efff>&nbsp; </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 15%" align=justify>A 10% increase or decrease of the
LIBOR rate for the periods ended December 31, 2010, December 31, 2009 and
December 31, 2008 would have affected net earnings by the amounts shown below.
This analysis assumes that all other variables, in particular foreign exchange
rates, remain constant.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="15%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%"><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%"><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="10%"><B>December 31,</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>2009</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>2008</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="15%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Net earnings before income taxes </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff><B>&nbsp;89</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff><B>&nbsp;86</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff><B>&nbsp;142</B> </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>7.</B> </TD>
    <TD>
      <P align=justify><B>MARKETABLE SECURITIES AND
  INVESTMENTS</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="39%" colSpan=9><B>As at December
      31, 2010</B> </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">Unrealized </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Available-for-sale investments </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>Cost </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>gain </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>Fair value </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Continental Minerals Corporation &#150; common shares </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="10%">&nbsp;5,657 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="10%">&nbsp;5,995 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="10%">&nbsp;11,652 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp;Investment in other public companies </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>5,405 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>865 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>6,270 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">11,062 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">6,860 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">17,922 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Held for trading investments </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Warrants held in
      other public company </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">280
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">319
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">599
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;11,342 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;7,179 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;18,521 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="39%"
    colSpan=9><B>As at December 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">Unrealized </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">Cost
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">gain
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">Fair
      value </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
      bgColor=#e6efff>Continental Minerals Corporation &#150; common shares </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>&nbsp;7,026 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>&nbsp;4,830 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>&nbsp;11,856 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>At December 31, 2010, The Company held
4,481,526 (December 31, 2009 &#150; 5,566,126) common shares of Continental Minerals
Corporation ("Continental") representing less than 3% of the Continental
common shares. During the year, the
Company sold 1,084,600 shares of Continental for total proceeds of $2,400 with a
net realized capital gain of $1,031.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_16></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company invests from time-to-time
in public companies that may provide long term strategic opportunities. At
December 31, 2010, the Company held investments in four public companies with
the Company&#146;s ownership all being less than 2.9 %.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>8.</B> </TD>
    <TD>
      <P align=justify><B>TRACKING PREFERRED SHARES</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In October 2001, the Company and its subsidiary Gibraltar
      Mines Ltd. ("Gibraltar") completed the acquisition of the Harmony Gold
      Property (&#147;Harmony&#148;) and related assets from Continental, for 12,483,916
      series "A" non-voting tracking preferred shares of Gibraltar and $2,230
      cash. The tracking preferred shares were recorded at $26,642, being their
      then fair value, and are designed to track and capture the value of
      Harmony and will be redeemed for common shares of the Company upon a
      realization event, such as a sale of Harmony to a third party or
      commercial production at Harmony or, at the option of Gibraltar, if a
      realization event has not occurred by 2011. Accordingly, the tracking
      preferred shares have been classified within shareholders&#146; equity on the
      consolidated balance sheet.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The initial paid-up amount for the Gibraltar tracking
      preferred shares is $62,770, subject to reduction prior to redemption for
      certain stated events. The amount will be reduced to the extent that the
      actual net proceeds of disposition of Harmony is less than $62,770, or to
      the extent that the fair market value of Gibraltar's interest in a mine at
      Harmony is determined to be less than $62,770. The paid-up amount (as
      adjusted) will be increased in the event Gibraltar receives consideration
      by way of granting an option to a third party which forfeits such option
      and also, in the event of any reduction of the paid-up amount (as
      adjusted), such amount will be credited to the account should the proceeds
      of disposition exceed the reduced paid-up amount (as adjusted) by an
      amount greater than the reduction. In no event will the paid-up amount (as
      adjusted) exceed $62,770 nor be less than $20,000. Net proceeds of
      disposition shall mean the fair value of all consideration received by
      Gibraltar as a consequence of a sale of Harmony, net of Gibraltar's
      reasonable costs of disposition, costs incurred by Gibraltar after the
      effective date in connection with Harmony, and a reasonable reserve for
      Gibraltar's taxes arising in consequence of the sale or other disposition
      of Harmony.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>On the occurrence of a realization event (as mentioned
      above), Gibraltar must redeem the Gibraltar tracking preferred shares by
      distributing that number of the Company&#146;s common shares equal to the
      paid-up amount (as adjusted) divided by a deemed price per common share,
      which will vary dependent on the timing of such realization event. The
      tracking preferred shares are redeemable at specified prices per common
      share of the Company starting at $3.39 and escalating by $0.25 per year,
      currently at $5.64 (as of December 31, 2010).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>If a realization event does not occur on or before
      October 16, 2011, Gibraltar has the right to redeem the tracking preferred
      shares for the Company&#146;s common shares at a deemed price equal to the
      greater of the then average 20 day trading price of the common shares of
      the Company and $10.00. The Company&#146;s common shares to be issued to
      Continental upon a realization event will in turn be distributed pro-rata,
      after adjustment for any taxes, to the holders of redeemable preferred
      shares of Continental that were issued to Continental shareholders at the
      time of the transaction.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_17></A><br>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
otherwise) </TD></TR></TABLE>
<br>
<P style="MARGIN-LEFT: 5%" align=justify>If the unrelated third party&#146;s
acquisition of Continental (the &#147;Acquisition&#148;) announced September 17, 2010
proceeds, it is planned, subject to ongoing negotiations with Continental, that
the redemption of the tracking preferred shares for the Company&#146;s common shares
be accelerated to occur just before closing of the Acquisition.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On December 20, 2010, Continental
announced that it had signed a formal &#147;Arrangement Agreement&#148; to implement the
proposed acquisition plan announced in September, through a process which will
be subject to the terms and conditions of the Arrangement Agreement. Completion
of the Arrangement Agreement is targeted for the end of the first quarter of
2011. The tracking preferred shares will be exchanged for the Company&#146;s common
shares on the ratio of 0.5028 per Company&#146;s common share to a Continental
preferred share, and the Company&#146;s common shares will not be subject to any hold
periods by Continental.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>9.</B> </TD>
    <TD>
      <P align=justify><B>MINERAL PROPERTY
INTERESTS</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="15%">December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="15%">December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">2009    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Gibraltar Copper Mine </TD>
    <TD align=right width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff> 13,752 </TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff> 16,766 </TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Prosperity Gold-Copper Property </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="15%">1 </TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="15%">1 </TD>
    <TD align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Harmony Gold Property </TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>1 </TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="15%" bgColor=#e6efff>1 </TD>
    <TD align=right width="2%" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Aley Niobium Property </TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="15%">8,343 </TD>
    <TD align=right width="2%">&nbsp;</TD>
    <TD align=right width="1%">&nbsp;</TD>
    <TD align=right width="15%">8,343 </TD>
    <TD align=right width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Oakmont Royalty Interest </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>5,640 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>7,520 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="15%">      27,737 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="15%">      32,631 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="2%">&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>Gibraltar Copper Mine</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>In July 1999, the Company acquired a
100% interest in the Gibraltar copper mine mineral property, located near
Williams Lake, British Columbia, Canada from Boliden Westmin (Canada) Limited
("BWCL") for $3,325. The acquisition of the Gibraltar mine included plant and
equipment and supplies inventory of the Gibraltar mine, and $8,000 of funds for
future reclamation. The Gibraltar mine final reclamation and closure plan is
updated every five years. The most recent reclamation plan and closure report
was approved by the British Columbia Ministry of Energy and Mines in 2004.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Gibraltar mine obtained government
permitting and re-started the operation in early October 2004 following several
years on care and maintenance as a result of low metal prices. Commercial
production started on January 1, 2005 and has continued to the present.
Construction of the Phase 1 mill expansion was completed in February 2008. The
ramp up to the rated processing capacity of 46,000 tons per day (&#147;tpd&#148;) has been
ongoing since the completion of construction. The construction schedule of a
Phase 2 expansion program, designed to increase concentrator from 46,000 tpd to
55,000 tpd, was completed in 2010, as well as installation of the in-pit crusher
and conveyor.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 31, 2010, the Company entered
into a Joint Venture agreement with Cariboo Copper Corporation to establish an
unincorporated joint venture, under which the Company continues in its capacity
as operator of the Gibraltar mine, under the terms of the Joint Venture
Operating Agreement (note 4).</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_18></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Prosperity Gold-Copper
Property</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company owns 100% of the Prosperity
gold-copper property, consisting of 196 mineral claims covering the mineral
rights for approximately 85 square km in the Clinton Mining Division in south
central British Columbia, Canada. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Taseko received the environmental
assessment certificate from the British Columbia Provincial Ministry of
Environment on January 14, 2010. Following hearings from March to May 2010 under
the federal process, the Panel submitted their findings and the Federal Minister
of Environment announced in November 2010 that the Prosperity mine project, as
proposed, could not be granted Federal authorizations to proceed. The Company
submitted a revised project description to the Federal Government in February
2011.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(c)</I> </TD>
    <TD>
      <P align=justify><I>Harmony Gold Property</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company acquired a 100% interest in
the Harmony gold property in fiscal 2002. The Company has undertaken property
maintenance and environmental monitoring activities at Harmony since acquiring
the project.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(d)</I> </TD>
    <TD>
      <P align=justify><I>Aley Niobium Property</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>In June 2007, the Company completed the
acquisition of all the issued and outstanding shares in the capital of a private
company with a project in north-eastern British Columbia, Canada (&#147;the
Transaction&#148;), for a total cash consideration to the acquired company&#146;s
shareholders of $1,500 as well as a share settlement to the value of $2,970
(consisting of 894,730 common shares).</P>
<P style="MARGIN-LEFT: 5%" align=justify>In the above Transaction, the Company
also purchased the residual net smelter royalties (&#147;NSR&#148;) from Teck Cominco
Metals Limited (&#147;Teck&#148;) for a total cash consideration to Teck of $300 and the
issuance of units with a value of $835 (consisting of 240,000 common shares and
120,000 warrants). </P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year, the Company completed
an exploration program which comprised geological mapping and diamond drilling
and is continuing to assess the potential development of the project. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(e)</I> </TD>
    <TD>
      <P align=justify><I>Purchase of Oakmont Ventures
Ltd.</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>On May 2, 2008, the Company completed
the acquisition of all the issued and outstanding shares in the capital of a
private company, Oakmont Ventures Ltd. (&#147;Oakmont&#148;), whose sole asset is the 30%
net profits interest in certain claims that are part of the Gibraltar mine
property located adjacent to the Gibraltar east pit. The acquisition was
completed through the issuance of 1,000,000 common shares of the Company at the
value of $5,220. The acquisition was accounted for under the purchase
method.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Oakmont mineral property interests
now form part of the Joint Venture (note 4).</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_19></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>10.</B> </TD>
    <TD>
      <P align=justify><B>MINERAL PROPERTY INTERESTS, PLANT AND
    EQUIPMENT</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="39%"
      colSpan=9><B>December 31, 2010</B> </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">Cost </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">Accumulated </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">Net book value </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="10%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">amortization </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="10%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Buildings and equipment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;2,872 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;1,695 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;1,177 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Mine equipment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">127,056 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">12,421 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">114,635 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Plant and equipment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>97,776 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>7,649 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>90,127 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Vehicles </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">3,079 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,640 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,439 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Computer equipment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>2,543 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>2,445 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>98 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Social assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">301 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&#150; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">301 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Deferred pre-stripping costs </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>39,401 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>6,650 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>32,751 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Construction in progress </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">15,254 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&#150; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">15,254 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Assets under capital lease </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>26,589 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>706 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>25,883 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Asset retirement
      costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">163
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">163
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>315,034 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;33,206 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>281,828 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Other equipment and leasehold improvements
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>1,720 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>524 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>1,196 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Total mineral
      property interests (note 9) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="10%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="10%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">27,737 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
      bgColor=#e6efff><B>Mineral property interest, plant and equipment</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff><B>&nbsp;310,761</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="39%"
      colSpan=9><B>December 31, 2009</B> </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">Accumulated </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">Cost
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">amortization </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">Net
      book value </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Buildings and equipment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;3,646 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;2,807 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;839 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Mine equipment </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">90,632 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">11,265 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">79,367 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Plant and equipment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>104,000 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>6,824 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>97,176 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Vehicles </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">2,744 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,593 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,151 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Computer equipment </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>3,390 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>3,130 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>260 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Social assets </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">402 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&#150; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">402 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Deferred pre-stripping costs </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>52,535 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>5,307 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>47,228 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Construction in progress </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">60,616 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">&#150; </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">60,616 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Assets under capital lease </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>18,222 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>333 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>17,889 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Asset retirement
      costs </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">62
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">62
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;336,248 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;31,259 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;304,989 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Other equipment and leasehold improvements
    </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>423 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>207 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>216 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Total mineral
      property interests (note 9) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="10%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="10%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">32,631 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
      bgColor=#e6efff><B>Mineral property interest, plant and equipment</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="10%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff><B>&nbsp;337,836</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_19></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>11.</B> </TD>
    <TD>
      <P align=justify><B>RELATED PARTY TRANSACTIONS AND
  BALANCES</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000
      align=left><B>Transactions</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" borderColor=#000000 align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid" borderColor=#000000 align=center
    width="1%">&nbsp;</TD>
    <TD colSpan=7 align=center borderColor=#000000 style="BORDER-BOTTOM: #000000 1px solid; BORDER-TOP: #000000 1px solid"><b>Twelve months ended December 31</b></TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">2009    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="11%">2008    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Joint Venture &#150; Management fee income (note
      11(b)) </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;648 </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;- </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;- </TD>
  <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=left>Hunter Dickinson Services Inc. (note 11(a)) &#150; Services
      rendered to the Company and reimbursement of third party expenses </TD>
    <TD align=left>&nbsp;</TD>
    <TD align=left valign="bottom">$</TD>
    <TD align=right valign="bottom">&nbsp;2,958 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">$</TD>
    <TD align=right valign="bottom">&nbsp;2,709 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">$</TD>
    <TD align=right valign="bottom">&nbsp;8,934 </TD>
  <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD>&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp; </TD>
  <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Due to (from)
      related parties:</B> </TD>
    <TD colspan="3" align=right style="BORDER-BOTTOM: #000000 1px solid"><STRONG>December 31, 2010</STRONG>&nbsp;&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    colSpan=4 align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2009</B> </TD>
  <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Joint Venture (Note 4) </TD>
    <TD align=left bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>$</B></TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>(1,764</B></TD>
    <TD align=left valign="bottom" bgColor=#e6efff><B>)</B> </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff><B>-</B> </TD>
  <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left>Hunter Dickinson
      Services Inc </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double"><B>$</B></TD>
    <TD align=right valign="bottom" style="BORDER-BOTTOM: #000000 3px double"><B>&nbsp;154</B> </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp; </TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double"><B>$</B></TD>
    <TD align=right valign="bottom" style="BORDER-BOTTOM: #000000 3px double"><B>&nbsp;13</B> </TD>
<TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>Hunter Dickinson Services Inc. ("HDSI")</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>HDSI is a private company which until recently was owned
      equally by eight public companies, one of which was Taseko. During the
      first quarter, the Company sold its interest in HDSI for nominal value.
      HDSI has certain directors in common with the Company and provides
      geological, corporate development, administrative and management services
      to, and incurs third party costs on behalf of the Company and its
      subsidiaries. On July 2, 2010, the HDSI services agreement was modified
      and services are now provided based on annually set hourly rates.
      Transactions with HDSI are reflected in the Company's statement of
      operations and comprehensive income (loss) and are measured at the
      exchange amount based on the agreement.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Management Fee</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Under the terms of the Joint Venture Operating Agreement,
      the Joint Venture pays a management fee to the Company for services
      rendered by the Company to the Joint Venture as operator of the Gibraltar
      mine. During the year ended December 31, 2010, the Company earned
      management fees of $648 net in relation to the Joint
  Venture.</P></TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_21></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED</B> </TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>12.</B> </TD>
    <TD>
      <P align=justify><B>LOAN OBLIGATIONS</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Future obligations under capital leases and equipment
      loans are as follows:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left><B>As at December 31, 2010</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B>Capital Lease</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B>Equipment</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B>Total Loan</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>Obligations (a)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>Loans (b)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>Obligations</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>2011 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;6,452 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;5,942 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;12,394 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>2012 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">6,144 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">7,449 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">13,593 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>2013 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>4,941 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>3,916 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>8,857 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>2014 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">2,983 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">2,611 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">5,594 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>2015 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>2,361 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>2,361 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Total payments </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">22,881 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">19,918 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">42,799 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Less: interest portion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>(2,568</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>(1,898</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>(4,466</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Present value of obligations </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">20,313 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">18,020 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">38,333 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Current portion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>(5,354</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>(4,961</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>(10,315</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left>Non-current
      portion </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="10%">&nbsp;14,959 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="10%">&nbsp;13,059 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="10%">&nbsp;28,018 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
    >&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left><B>As at December 31, 2009</B> </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B>Capital Lease</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B>Equipments</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%"><B>Total Loan</B> </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>Obligations (a)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>Loans (b)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%"><B>Obligations</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>2010 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;4,543 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;2,701 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;7,244 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>2011 </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">4,266 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">2,701 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">6,967 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>2012 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>4,215 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>4,710 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>8,925 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Thereafter until
      2013 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">2,612 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="10%">2,612 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Total payments </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>15,636 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>10,112 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>25,748 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Less: interest
      portion </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="10%">(1,648</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="10%">(1,402</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="10%">(3,050</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Present value of obligations </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>13,988 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>8,710 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>22,698 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Current portion
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="10%">(3,750</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="10%">(2,032</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="10%">(5,782</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
      bgColor=#e6efff>Non-current portion </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>&nbsp;10,238 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>&nbsp;6,678 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="10%"
    bgColor=#e6efff>&nbsp;16,916 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" align="center" vAlign=top><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>Capital Lease Obligations</I></P></TD></TR>
  <TR>
    <TD width="5%" align="center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" align="center"></TD>
    <TD>
      <P align=justify>Included in mineral property interests, plant and
      equipment are mining equipment that the Company acquired pursuant to
      capital lease agreements.</P></TD></TR>
  <TR>
    <TD width="5%" align="center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" align="center"></TD>
    <TD>
      <P align=justify>Capital lease obligations as detailed above are secured
      by plant and equipment and are repayable in monthly installments with
      fixed interest rates. The capital lease obligations bear fixed interest
      rates ranging from 5.93% to 8.80% per annum.</P></TD></TR>
  <TR>
    <TD width="5%" align="center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" align="center" vAlign=top><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Equipment Loans</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company has entered into various equipment loan
      agreements ranging from three to five years. These loans are secured by
      the underlying equipment at the Gibraltar mine. The loans are repayable in
      monthly installments and bear fixed interest rates ranging from 5.349% to
      8.63%.</P></TD></TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<A name=page_22></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>13. </B></TD>
    <TD>
      <P align=justify><B>RESTRICTED CASH</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During 2009, the Company had pledged $3,153 (US$3,000) as
      cash collateral in favour of Credit Suisse to obtain a waiver on a certain
      clause in the term facility agreement with Credit Suisse. During the first
      quarter of 2010, these funds were released from restriction due to the
      prepayment of the term facility (note 14).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>14. </B></TD>
    <TD>
      <P align=justify><B>CREDIT FACILITY</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In February 2009, the Company entered into and drew upon
      a US$30,000 36-month term facility agreement (the "Facility") with Credit
      Suisse. In September 2009, the Company and Credit Suisse, as Facility
      Agent, and Investec Bank plc ("Investec") amended the Facility to increase
      the existing Facility by an additional US$20,000 and the Company drew an
      additional US$20,000. Under the amended facility agreement, the US$50,000
      Facility was repayable commencing April 2010 and every second month
      thereafter in equal installments until February 2012. The Facility bore
      interest at LIBOR plus 5 percent.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>During the year, the Company repaid the Facility. A loss
      of $834 was recorded in the Company's net earnings (loss) as a result of
      the early pre-payment of the Facility.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%"><B>15. </B></TD>
    <TD>
      <P align=justify><B>DERIVATIVE FINANCIAL INSTRUMENTS</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Consistent with the Company's strategy to manage its
      operating margins effectively in volatile copper markets, the Company
      entered into the following producer put option contracts.</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The Company purchased a series of put options for 15,600
      metric tonnes of copper for the period January to June, 2011 at a strike
      price of US $3.00 per pound, with a premium per option ranging between
      $0.1994 and $0.2114.</P></TD></TR></TABLE><BR>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>Strike Price </B></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>Premium per </B></TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%"><B>Purchased metric </B></TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Contract Period
      </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>US$/lb </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>Contract US$ </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>tonnes (mt) of copper </B></TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>January
      to June 2011 </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;3.00 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;5,275 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>12,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>January
      to June 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;3.00 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;1,678 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">3,600    </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The strike price sets the gross minimum
price that the Company seeks to realise for its copper production. These put
options are only exercised if the spot price declines below the set put strike
price. The Company participates in the full upside price increases and is
protected from price decreases.</P>
<P style="MARGIN-LEFT: 5%" align=justify>For accounting purposes, the Company
determined that these contracts are derivative financial instruments that should
be measured at fair value at each reporting date with all changes in fair value
included in the net earnings (loss) in the period in which they arise. During
the year ended December 31, 2010, the Company recorded a mark-to-market net gain
of $3,575 (2009 - $11,330 loss) on contracts that settled during the year. The
Company recorded an unrealized loss of $6,898 (2009 - $15,775) on the
mark-to-market of outstanding contracts at fiscal year-end.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_23></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
otherwise) </TD></TR></TABLE>
<br>
<P style="MARGIN-LEFT: 5%" align=justify>The fair value of contracts and amount
payable to settle the derivative liability at December 31, 2010 is as
follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="12%"><B>Strike Price</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="15%"><B>Notional Quantity</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="12%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="15%"><B>Fair Value</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Option</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>US$/lb</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"><B>mt
      of copper</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%"><B>Due Date</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="15%"><B>(Liability)/Asset US$</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Call option <SUP>1</SUP> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;3.95 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>2,250 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>Dec 31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>&nbsp;(662</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Put option </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>&nbsp;3.00 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>15,600 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>Jun 30, 2011 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>&nbsp;436 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="23%"
    bgColor=#e6efff colSpan=4>Total Fair Value of Contracts (in US) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="12%"
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%"
    bgColor=#e6efff>&nbsp;(226</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="23%"
    colSpan=4>Total Fair Value of Contracts (in CAD) </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="12%">&nbsp;    </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="15%">&nbsp;(225</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%">)
</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><I>(1) Amount payable for December 2010
settlement of call option, which settled in January, 2011.</I></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>16.</B> </TD>
    <TD>
      <P align=justify><B>ROYALTY OBLIGATIONS</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="15%"><B>December 31, 2010</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="15%"><STRONG>December 31,
      2009</STRONG>&nbsp;&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Royalty Agreement &#150; Red Mile No. 2 LP </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>&nbsp;58,893 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="15%" bgColor=#e6efff>62,318 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Gibraltar Royalty
      LP </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="15%">6,511    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff><B>Total royalty obligations</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="15%"
    bgColor=#e6efff><B>&nbsp;58,893</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="15%"
    bgColor=#e6efff><B>68,829</B> </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>Royalty Agreement &#150; Red Mile No. 2 LP (promissory note
      and royalty obligation)</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>In September 2004, the Company entered
into agreements with an unrelated investment partnership, Red Mile Resources No.
2 Limited Partnership ("Red Mile"). Gibraltar sold to Red Mile a royalty for
$67,357 cash. These funds were invested in a promissory note with a trust
company and the Company pledged the promissory note along with interest earned
and to be earned thereon for a total of $70,200 to secure its royalty
obligations under the agreements. </P>
<P style="MARGIN-LEFT: 5%" align=justify>At December 31, 2010, the promissory
note amounted to $77,807 (2009 &#150; $78,097).</P>
<P style="MARGIN-LEFT: 5%" align=justify>Pursuant to the agreements, the
Company received an aggregate of $10,500 in fees and interest for services
performed in relation to the Red Mile transaction, of which $5,250 was received
in each of September and December of 2004, and included in interest and other
income. The amount of $5,250 received in September 2004 included $1,750 for
indemnifying an affiliate of Red Mile from any claims relating to a breach by
Gibraltar under the royalty agreement. The funds received in respect of the
indemnification are presented as deferred revenue, and are recognized over the
expected remaining life of the royalty agreement, with $656 (2009 &#150; $831)
remaining as deferred as at December 31, 2010, of which $175 (2009 &#150; $175) is
classified as current.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Annual royalties are payable by
Gibraltar to Red Mile at rates ranging from $0.01 per pound to $0.14 per pound
of copper produced during the period from the commencement of commercial
production (as defined in the agreement) to the latter of (i) December 2014 and
(ii) five years after the end of commercial production from the mine. For the
year ended December 31, 2010, Gibraltar owes a royalty to Red Mile in the amount
of $7,248 (2009 &#150; $4,697) at an average rate of $0.08007 (2009 &#150; $0.0686) per
pound of copper produced. Gibraltar is entitled to have released to it funds
held under the promissory note and interest thereon to fund its royalty
obligations to the extent of its royalty payment obligations. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has a pre-emptive option to
effectively purchase ("call") the royalty interest by acquiring the Red Mile
partnership units in consideration of a payment which is (i) approximately equal
to the funds received by the Company less royalty payments to date, or (ii) fair
value, whichever is lower. Under certain circumstances, the investors in Red
Mile also have a right to sell ("put") their Red Mile partnership units to the
Company at fair value; however, such right is subject to the Company's
pre-emptive right to exercise the "call" in advance of any "put" being exercised
and completed.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has granted to Red Mile a
net profits interest ("NPI"), which survives any "put" or "call" of the Red Mile
units. The NPI is applicable for the years 2011 to 2014 and is 2% if the price
of copper averages US$2.50 to US$2.74 per pound, 3% if the price of copper
averages US$2.75 to US$2.99 per pound and 4% if the price of copper averages
US$3.00 per pound or greater for any year during that period. The US-dollar
pricing amounts specified above are based upon an exchange rate of US$0.75 for
Cdn$1.00, and shall be adjusted from time to time by any variation of such
exchange rates. No NPI is payable until the Company reaches a pre-determined
aggregate level of revenues less defined operating costs and expenditures. No
NPI was payable at December 31, 2010 and 2009.</P>
<P style="MARGIN-LEFT: 5%" align=justify>In accordance with AcG15, the Company
has determined that the royalty agreement created certain variable interest
entities for which the Company holds a variable interest. However, as the
Company is not the primary beneficiary under the agreement, it is not required
to consolidate any of such entities.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Gibraltar Royalty LP</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>During 2009, the Company entered into
an agreement with an unrelated investment partnership, Gibraltar Royalty Limited
Partnership ("GRLP") whereby Gibraltar sold to GRLP a production royalty for
$6,511 cash. </P>
<P style="MARGIN-LEFT: 5%" align=justify>Annual royalties were payable by
Gibraltar to GRLP at rates ranging from $0.003 per pound to $0.004 per pound of
copper produced during the period from September 1, 2009 to December 31, 2030
(the "Royalty Period"). For the twelve months ended December 31, 2010, Gibraltar
paid $65 to GRLP. The royalty payments were recognized as an expense during the
period.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company classified the principal
balance of royalty obligation as a current financial liability to be settled in
a future period. The Company had a pre-emptive option to repurchase ("call") the
royalty obligation by acquiring the GRLP partnership units during the period
from March 1, 2010 to December 31, 2012 in consideration of a payment equal to
the funds received by the Company plus a 20% premium payable in the Company's
shares or cash. GRLP also had a right to sell ("put") its GRLP partnership units
to the Company at fair value during the period from April 1, 2012 to December
31, 2012. However, this "put" right was subject to the Company's pre-emptive
right to exercise the "call" in advance of any "put" being exercised and
completed.</P>
<P style="MARGIN-LEFT: 5%" align=justify>On March 24, 2010, the Company
exercised its "call" option through the issuance of 1,556,355 shares of the
Company. The 1,556,355 shares were recorded at $7,813 in the Company's accounts
to settle the carrying value of royalty obligation in the amount of $6,511. A
premium of $1,302 was recorded in the Company's statement of operations as a
result of the exercise of the call option. Consequently, at December 31, 2010,
no amounts were owed to GRLP (December 31, 2009 &#150; $6,511).</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>

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<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>17.</B> </TD>
    <TD>
      <P align=justify><B>RECLAMATION OBLIGATION AND RECLAMATION
    DEPOSITS</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>The continuity of the provision for site closure and
      reclamation costs related to the Gibraltar mine is as
  follows:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD align=left bgColor=#e6efff style="BORDER-TOP: #000000 1px solid">Balance, September 30, 2007 </TD>
    <TD width="1%" align=left  bgColor=#e6efff style="BORDER-TOP: #000000 1px solid">$</TD>
    <TD width="12%" align=right bgColor=#e6efff style="BORDER-TOP: #000000 1px solid">&nbsp;17,441 </TD>
    <TD width="2%" align=left  bgColor=#e6efff style="BORDER-TOP: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Changes during fiscal, 2008: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Reclamation incurred </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(183</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Accretion expense </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">1,451 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Additional site closure and
      reclamation obligation recognized </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>366 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;
      &nbsp;Reduction in the present value of reclamation obligation due to a
      revision in mine life </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="12%">(8,709</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Balance, December 31, 2008 </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;10,366 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Changes during fiscal 2009: </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Reclamation incurred </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(1,590</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Accretion expense </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">968 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp;Additional site closure and reclamation
      obligation recognized </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>63 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Balance, December 31, 2009 </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="12%">&nbsp;9,807 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Changes during fiscal 2010: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Reclamation incurred </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">(91</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Accretion expense </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>860 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Additional site closure and reclamation
      obligation recognized </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="12%">195 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp;Less: JV 25% portion of the March 31/10 total
      reclamation obligation </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(2,593</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Balance, December
      31, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;8,178 </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>During the 15 months ended December 31,
2008, the value of the underlying site closure and reclamation obligation was
revised to reflect an increase in the life of the Gibraltar mine. This change
resulted in a revision to the timing of undiscounted cash flows associated with
the carrying amount of the liability and a reduction in the present value of the
site closure and reclamation obligation. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The impact of these changes in
estimates were:</P>
<UL style="TEXT-ALIGN: justify">

      <li><p style="margin-left:5%">an increase to asset retirement costs included in mineral property
        interests, plant and equipment and corresponding increase to reclamation
        obligation as at December 31, 2008 of $366 </p></li>
      <li><p style="margin-left:5%">a decrease as at December 31, 2008 of $1,426 in asset retirement costs
        included in mineral property interests, plant and equipment </p></li>
      <li><p style="margin-left:5%">a decrease as at December 31, 2008 of $8,709 in the present value of the
        reclamation obligation due to an extension in the mine life </p></li>
      <li><p style="margin-left:5%">a gain for the 15 months ended December 31, 2008 of $6,917 </p></li>

</UL>
<P style="MARGIN-LEFT: 5%" align=justify>The new estimated total amount of the
reclamation costs, adjusted for estimated inflation at 2.5% per year, in 2032
dollars, as at December 31, 2010 was $91,000 (2009 &#150; $90,300) and is expected to
be spent over a period of approximately three years beginning in 2032. The
credit-adjusted risk free rates at which the estimated future cash flows have
been discounted are 7.1% to 10%, which results in the net present value of the
obligation for the Company as at December 31, 2010 of $8,178 (2009 &#150; $9,807). The accretion
for the year ended December 31, 2010 of $860 (2009 &#150;$968) is charged to the
statement of operations.</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
otherwise) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>As required by regulatory authorities,
at December 31, 2010, the Company had reclamation deposits totaling $23,266
(2009 &#150; $29,421) comprised of $22,977 (2009 &#150; $29,132) for the Gibraltar mine,
$75 (2009 &#150; $75) for the Prosperity project<B>, </B>$175 (2009 &#150; $175) for the
Harmony project and $39 (2009 &#150; $39) for the Aley project. These deposits are
invested in government bonds and treasury bills and bear interest at rates
ranging from 1.5% to 4.7% per annum. In addition, the Company has issued an
irrevocable standby letter of credit for $10,000 in favour of the Province of
British Columbia for the Gibraltar mine. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>18.</B> </TD>
    <TD>
      <P align=justify><B>TAX AND INTEREST RECOVERIES</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Income tax expense (recovery) differs from the amount
      which would result from applying the statutory Canadian income tax rates
      (2010 &#150; 28.5%, 2009 &#150; 30.0%, 2008 &#150; 31.4%) for the following
    reasons:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%">2010 </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%">2009 </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%">2008 </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%" >&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Earnings (loss) before income taxes </TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;195,382 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;11,255 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;(2,087</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Expected tax expense based on statutory
      rates </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>55,684 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>3,376 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(657</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Permanent differences </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(20,387</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,141 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">6,790 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Mineral tax </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>14,293 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>981 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>606 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>Future tax rate differences </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(3,637</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">(3,674</TD>
    <TD align=left width="2%" >) </TD>
    <TD align=left width="1%" >&nbsp;</TD>
    <TD align=right width="10%">1,215 </TD>
    <TD align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Recognition of previously unrecognized tax
      assets </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>(13,613</TD>
    <TD align=left width="2%"  bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Other </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">831
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
    width="10%">(1,130</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">62
</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Tax expense (recovery) for the year </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;46,784 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;694 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
     bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%"
    bgColor=#e6efff>&nbsp;(5,597</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD>
    <TD width="1%" >&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Presented as: </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="10%" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp; &nbsp;Current income tax expense (recovery)
    </TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;4,106 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;669 </TD>
    <TD align=left width="2%" >&nbsp;</TD>
    <TD align=left width="1%" >$</TD>
    <TD align=right width="10%">&nbsp;(2,151</TD>
    <TD align=left width="2%" >) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp; &nbsp;Future income tax expense (recovery)
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>42,678 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>25 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
     bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>(3,446</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
     bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;46,784 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;694 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;(5,597</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >) </TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_27></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>As at December 31, 2010 and December
31, 2009, the estimated tax effect of the significant components within the
Company&#146;s future tax assets were as follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="12%"><B>2010</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="12%"><B>2009</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Loss carry forwards </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;89 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;8,985 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Royalty obligation </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">12,911 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">16,343 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>BC mining taxes </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>1,952 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Copper hedge and
      other tax pools </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">651
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%">6,210
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Future income tax assets </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>13,651 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>33,490 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="12%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Partnership deferral </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(5,820</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Reclamation obligation </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(3,760</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(4,800</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Plant and equipment </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(46,662</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(20,323</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>BC Mining taxes </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(9,531</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Mineral properties and deferred stripping
    </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(13,973</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>(19,436</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Unrealized foreign exchange gain </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(43</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="12%">(751</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Unrealized gain recorded in comprehensive income </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(893</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(654</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>Net future
      income tax liability</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;(61,211</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="12%">&nbsp;(18,294</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">)
</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Current portion &#150; future income tax liability </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;(1,008</TD>
    <TD align=left width="2%">) </TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="12%">&nbsp;(1,979</TD>
    <TD align=left width="2%">) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Long term future income tax liability </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(60,203</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="12%"
    bgColor=#e6efff>(16,315</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left><B>Net future
      income tax liability</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%"><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%"><B>&nbsp;(61,211</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      width="2%"><B>)</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="1%"><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="12%"><B>&nbsp;(18,294</B></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      width="2%"><B>)</B> </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>At December 31, 2010 the Company&#146;s tax
attributes included capital losses totaling $Nil (2009 &#150;$3,525) which are
available indefinitely to offset future taxable capital gains, and resource tax
pools totaling approximately $2,910 (2009 &#150; $2,022) which are available
indefinitely to offset future taxable income. The Company also has non-capital
losses of $319 (2009 &#150; $40,981) to offset future taxable income which expire in
2028 and 2029 respectively.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has accrued a long-term tax
provision of $2,500 (2009 &#150; $32,299) related to various tax pools.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year ended December 31,
2010, provisions for certain long term income tax liabilities and associated
interest relating to historical tax estimates for the 2004 fiscal year for one
of the Company&#146;s subsidiaries were reversed. Management believes the probability
of these provisions being paid would be unlikely. Consequently, the Company
recognized a reversal of income tax in the amount of $22,523 (2009 &#150; $nil) and
interest in the amount of $8,098 (2009 &#150; $nil).</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  ><STRONG>19.</STRONG> </TD>
    <TD vAlign=top colSpan=2>
      <P align=justify><B>CONVERTIBLE DEBT</B></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%"><EM>(a) </EM></TD>
    <TD>
      <P align=justify><I>Convertible Bonds</I></P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD colspan="2">
      <P align=justify>On August 29, 2006 the Company issued US$30,000 of
        five-year convertible bonds due in 2011 (the "Bonds") to qualified
        institutional buyers (the &#147;Bondholders&#148;). The Bonds were convertible into
        the Company&#146;s common shares. The Bonds constituted direct, unsubordinated,
        unsecured, general and unconditional obligations of the Company. The Bonds
        were issued at 100% and, if not converted, could be redeemed at maturity
        at 101%. The Bonds carried coupon interest rates of 7.125% per annum. The
        Bonds also had a &#147;put&#148; right in August 2009 to be redeemed at
    100.6%.</P></TD>
    </TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD colspan="2">
      <P align=justify>During 2009, the Company repurchased US$20,000 of the
        Bonds from its Bondholders for the purpose of cancellation. The remaining
        Bondholders exercised the &#147;put&#148; right on the
        remaining US$10,000 in August 2009. The Company
        allocated the consideration paid on the extinguishment of the bonds to the
        liability and equity elements of the security based on their relative fair
        values at the date of the transaction. A gain of $1,630 which was attributed to
        the liability portion was recorded in the Company&#146;s statement of operations as a
        result of the convertible bond redemptions. A gain of $2,169 which was
        attributed to the equity portion was recorded in contributed surplus as a result
    of the convertible bond redemptions.</P></TD>
</TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
otherwise) </TD></TR></TABLE>
<br>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Convertible Debenture</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>On July 21, 1999, in connection with
the acquisition of the Gibraltar mine, the Company issued a $17,000
interest-free debenture (the &#147;Debenture&#148;) to NVI Mining Ltd. (&#147;NVI&#148;), formerly
Boliden Westmin (Canada) Limited. The Debenture was due on July 21, 2009 and was
convertible into common shares of the Company over a 10-year period commencing
at a price of $3.14 per share in year one and escalating by $0.25 per share per
year thereafter. NVI had the right to convert, in part or in whole from time to
time, the Debenture into fully paid common shares of the Company from year one
to year ten. </P>
<P style="MARGIN-LEFT: 5%" align=justify>On April 2, 2008, NVI issued a notice
to the Company to convert the principal amount of the Debenture of $17,000 at an
effective conversion rate of $5.14 per common share, which would have resulted
in 3,307,393 common shares of the Company being issued to NVI. The Company
issued 2,612,971 common shares to NVI and a cash payment of $3,569 in lieu of
issuing the remaining 694,422 common shares as full and final settlement to NVI.
The 2,612,971 shares were recorded at $21,318 in the Company&#146;s accounts to
settle the carrying value of the liability and equity portion of the Debenture
as at April 2, 2008.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>20.</B> </TD>
    <TD colSpan=2>
      <P align=justify><B>SHARE CAPITAL</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD colSpan=2>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD width="5%">
      <P align=justify><I>(a) </I></P></TD>
    <TD><EM>Authorized</EM></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Authorized share capital of the
Company consists of an unlimited number of common shares without par value.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Equity Issued</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><I>Fiscal year ending December 31,
2010</I></P>
<P style="MARGIN-LEFT: 5%" align=justify>During the year, the Company obtained
a receipt in respect of the final short-form base shelf prospectus from
regulatory authorities. The shelf registration will, subject to securities
regulatory requirements, allow the Company to make offerings of common shares,
warrants, subscription receipts, debt securities, or any combination of such
securities up to an aggregate offering price of $300,000 during the 25-month
period that the final short-form base shelf prospectus, including any amendments
thereto, remains effective. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company also entered into an At
the Market Issuance Agreement, with a third party, under which the Company may,
at its discretion, from time to time sell up to a maximum of 18.6 million of its
common shares through "at-the-market" ("ATM") issuance. The third party will act
as sales agent for any sales made under the ATM. The common shares will be sold
at market prices prevailing at the time of a sale. The Company is not required
to sell any of the reserved shares at any time during the term of the ATM, which
extends until November 1, 2012, and there are no fees for having established the
arrangement. The ATM Issuance Agreement does not prohibit the Company from
conducting other financings. </P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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&nbsp;
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
otherwise) </TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>Subsequent to year-end the Company
issued 1 million common shares under the ATM agreement for gross proceeds of
approximately $6,104. </P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Fiscal year ending December 31,
2009</I></P>
<P style="MARGIN-LEFT: 5%" align=justify>In 2009, the Company completed a
&#147;bought deal&#148; for 15,862,069 common shares at a price of $1.45 per common share,
resulting in aggregate gross proceeds to the Company of $23,000. </P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company also completed a private
placement financing of 3,628,015 shares at $1.45 per common share for gross
proceeds of $5,261.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company incurred $1,444 in
financing fees related to the issuance, for net proceeds of $26,817.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During 2009, 9,085,715 warrants issued
in December 2008 were exercised for total proceeds of $7,723.</P>
<P style="MARGIN-LEFT: 5%" align=justify><I>Fiscal period ending December 31,
2008</I></P>
<P style="MARGIN-LEFT: 5%" align=justify>In December 2008, the Company
completed a private placement financing of 8,571,429 units with each unit
consisting of one common share and one warrant, at the issue price of $0.70 per
unit for gross proceeds of $6,000. Each warrant entitled the holder to purchase
one common share of the Company (a "Warrant Share") for a period of 24 months at
the exercise price of $0.85 per Warrant Share in the first 12 months and $0.95
per Warrant Share in the second 12 months, subject to an acceleration of the
expiry date to 30 days in the event the Company's common shares trade at a price
of $1.50 or higher for a period of 10 trading days. </P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>(c)</I> </TD>
    <TD>
      <P align=justify><I>Share purchase option plan</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The Company has a share purchase
option compensation plan (the &#147;Plan&#148;) approved by the shareholders that allows
it to grant options, subject to regulatory terms and approval, to its directors,
employees, officers and consultants. The Plan is based on a maximum number of
eligible shares equaling a rolling percentage of up to 10% of the Company&#146;s
outstanding common shares, calculated from time to time. Pursuant to the Plan,
if outstanding options are exercised, or expire, and/or the number of issued and
outstanding common shares of the Company increases, the options available to
grant under the Plan increase proportionately. The exercise price of each option
is set by the Board of Directors at the time of grant and cannot be less than
the market price (less permissible discounts) on the Toronto Stock Exchange.
Options may have a term of up to ten years and typically terminate 30 days
following the termination of the optionee&#146;s employment, except in the case of
retirement or death. Vesting of options is at the discretion of the Board at the
time the options are granted. The continuity of share purchase options is as
follows:</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<P style="MARGIN-LEFT: 5%" align=justify>The following table summarizes
information about share purchase options outstanding at December 31, 2010:</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="19%" colSpan=4><B>2010</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="19%" colSpan=4><B>2009</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="19%" colSpan=4><B>2008</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=center
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Number </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Number </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Number </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Average </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">of
      shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">Price
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">of
      shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">Price
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">of
      shares </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">Price
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Opening balance </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>10,384,635 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1.40 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>7,817,718 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1.33 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>5,707,334 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;2.60 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Granted during the year </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">3,708,500 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">4.63 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">3,983,500 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">1.50 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">8,472,050 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">2.19 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Exercised during the year </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(2,791,834</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1.37 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(1,161,749</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1.20 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>(270,100</TD>
    <TD align=left width="2%" bgColor=#e6efff>) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>2.48 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Expired/cancelled
      during year </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">(187,500</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">1.62
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">(254,834</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2.14
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">(6,091,566</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">3.67
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Closing balance </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>11,113,801 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>2.47 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>10,384,635 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>1.40 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>7,817,718 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;1.33 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left colSpan=3>Average
      contractual remaining life (years) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2.68
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="8%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">3.17
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="8%">&nbsp;
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">3.47
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Range of exercise prices </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="19%"
    bgColor=#e6efff colSpan=4>&nbsp;$ 1.00 &#150; $5.39 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="19%"
    bgColor=#e6efff colSpan=4>$ 1.00 - $4.50 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff></TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="19%"
    bgColor=#e6efff colSpan=4>$ 1.00 - $5.45 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE> <BR>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="30%"
    colSpan=7>Options outstanding </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="19%"
    colSpan=4>Options exercisable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Number </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Number </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD width="8%" align=right nowrap>Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD width="8%" align=right nowrap>outstanding at </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD width="8%" align=right nowrap>exercisable at </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">average </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Range of exercise </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">December 31 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">remaining </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">exercise </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">December 31 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">exercise </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>prices </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD
      width="8%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">contractual life </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">price
    </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">price
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>$1.00 to $1.15 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>5,205,634 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>2.61 years </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;1.06 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>4,480,636 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;1.04 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>$1.71 to $2.18 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">1,732,167 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">2.82 years </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="8%">&nbsp;1.79 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">1,186,333 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="8%">&nbsp;1.82 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>$2.63 to $3.07 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>205,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>0.97 years </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;2.98 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>205,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;2.98 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>$4.03 to $4.49 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">2,090,000 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">3.98 years </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="8%">&nbsp;4.34 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">756,665 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="8%">&nbsp;4.41 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>$4.50 to $5.39 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>1,881,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>2.82 years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>&nbsp;4.78 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>832,999 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>&nbsp;4.74 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">11,113,801 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="8%">2.90
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">&nbsp;2.47 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">7,461,633 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">&nbsp;1.97 </TD>
<TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The following table summarizes
information about share purchase options outstanding at December 31, 2009:</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="30%"
    colSpan=7>Options outstanding </TD>
    <TD align=center width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center width="19%"
    colSpan=4>Options exercisable </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Number </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Number </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Weighted </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD width="8%" align=right nowrap>outstanding at </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">average </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD width="8%" align=right nowrap>exercisable at </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">average </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Range of exercise </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">December 31 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">remaining </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">exercise </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">December 31 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">exercise </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>prices </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD
      width="8%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid">contractual life </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">price
    </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">price
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>$1.00 to $1.15 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>7,711,801 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>3.11 years </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;1.06 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>5,937,535 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;1.08 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>$1.71 to $2.18 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">1,979,834 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">3.68 years </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="8%">&nbsp;2.17 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">874,169 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="8%">&nbsp;1.91 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>$2.63 to $3.07 </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>240,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>1.71 years </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;3.00 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="8%" bgColor=#e6efff>240,000 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="8%" bgColor=#e6efff>&nbsp;3.00 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>$4.03 to $4.09 </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">225,000 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">3.53 years </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="8%">&nbsp;4.11 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">125,000 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">$</TD>
    <TD align=right width="8%">&nbsp;4.08 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>$4.50 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>228,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>1.74 years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>&nbsp;4.50 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>228,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>&nbsp;4.50 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">10,384,635 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right width="8%">3.17
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">&nbsp;1.39 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">7,404,704 </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="8%">&nbsp;1.40 </TD>
<TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="2%">&nbsp;</TD></TR></TABLE> <BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_31></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<P style="MARGIN-LEFT: 5%" align=justify>The fair value of the options that
vested during the year is $10,409. The following are the weighted average
assumptions used to estimate the fair value of options during the periods
ended:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">2010
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>Risk-free interest rate </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>2.37% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>1.9% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>2.4% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Expected life </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">4.37
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">3.17
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">3.52
      years </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      bgColor=#e6efff>Volatility </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>78% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>74% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%"
    bgColor=#e6efff>65% </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>Expected
      dividends </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">nil
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">nil
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">nil
    </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>d)</I> </TD>
    <TD>
      <P align=justify><I>Share purchase warrants</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The continuity of share purchase
warrants during the year ended December 31, 2009 is as follows:</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="8%">Outstanding </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="8%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="8%">Outstanding </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Exercise </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">December 31, </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">December 31 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Expiry dates
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">price
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2008
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">Issued
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">Exercised </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2009
    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>December 17, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>0.85 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>9,085,715 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>9,085,715 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The continuity of share purchase
warrants during the period ended December 31, 2008 is as follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD
      align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=right borderColor=#000000 style="BORDER-TOP: #000000 2px solid">Outstanding </TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
    <TD align=right borderColor=#000000 style="BORDER-TOP: #000000 2px solid">Outstanding </TD>
    <TD align=left borderColor=#000000 style="BORDER-TOP: #000000 2px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp; </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">Exercise </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">September 30 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="8%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="8%">December 31 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp;Expiry dates    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">price    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2007    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">Issued    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">Exercised </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="8%">Expired </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%">2008    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>December 17, 2010 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>0.85 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>9,085,715 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="8%"
    bgColor=#e6efff>9,085,715 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="8%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>February 22, 2008 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>3.48 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>120,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>120,000 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="8%"
    bgColor=#e6efff>&#150; </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
  </TR></TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>e)</I> </TD>
    <TD>
      <P align=justify><I>Earnings per share</I></P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>The following table sets forth the
computation of diluted earnings per share:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%"><B>2010</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%"><B>2009</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%"><B>2008</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Earnings available to common shareholders
    </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;148,598 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;10,561 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;3,510 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Effect of assumed conversions: </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Royalty payments to GRLP (note
      16(b)) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>65 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>130 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; &nbsp;Tax
      effect on interest on convertible bonds </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
width="10%">(45</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%">) </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="10%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Earnings available to common shareholders
      including assumed conversions: </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>148,663 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>10,646 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>3,510 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="10%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Basic weighted-average number of shares
      outstanding (in 000&#146;s) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>186,103 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>173,170 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>142,062 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>Effect of dilutive securities (in 000&#146;s): </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;Stock options </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>10,626 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>3,244 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>5,142 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp;Warrants </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">7,060 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp;Potential shares issued in settlement
      of GRLP Royalty </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>1,757 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left>&nbsp;Tracking preferred shares </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">6,277 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">2,664 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="10%">2,664 </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Diluted weighted-average number of shares
      outstanding (in 000&#146;s) </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>203,006 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>180,835 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>156,928 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left><B>Earnings per share</B> </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=left width="10%">&nbsp; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD align=left bgColor=#e6efff>&nbsp; &nbsp;Basic </TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.80 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.06 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="10%" bgColor=#e6efff>&nbsp;0.02 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>&nbsp;
      &nbsp;Diluted </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;0.73 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;0.06 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%">$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right
      width="10%">&nbsp;0.02 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left
    width="2%">&nbsp;</TD></TR></TABLE><BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_32></A>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE></P>
<P style="MARGIN-LEFT: 5%" align=justify>The following table lists the stock
options and shares issuable under convertible debentures excluded from the
computation of diluted earnings per share because their inclusion would have
been anti-dilutive for the periods presented (in thousands):</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%">2010 </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%">2009 </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="1%" >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=right width="10%">2008 </TD>
    <TD style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%" >&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Stock options </TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>488 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>7,141 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%"  bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="10%" bgColor=#e6efff>2,626 </TD>
    <TD align=left width="2%"  bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD width="5%" >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left>Shares issuable
      under convertible bonds </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%">&#150; </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="10%">8,956
    </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    >&nbsp;</TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>21.</B> </TD>
    <TD>
      <P align=justify><B>COMMITMENTS</B></P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%" align="center" vAlign=top><I>(a)</I> </TD>
    <TD>
      <P align=justify><I>Treatment and refining agreement</I></P></TD></TR>
  <TR>
    <TD width="5%" align="center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" align="center"></TD>
    <TD>
      <P align=justify>The Company has an agreement with MRI Trading AG, a
      Swiss-based metal trading company, for the treatment and refining of
      certain copper concentrate from the Gibraltar mine. Under the terms of the
      agreement, the Company has secured long-term and fixed rates for
      processing copper concentrate until December 31, 2014. The Company has the
      right to price payable copper within the concentrate based on a
      quotational period, declared prior to, and covering each ensuing calendar
      year.</P></TD></TR>
  <TR>
    <TD width="5%" align="center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" align="center" vAlign=top><I>(b)</I> </TD>
    <TD>
      <P align=justify><I>Off-Take Agreement</I></P></TD></TR>
  <TR>
    <TD width="5%" align="center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" align="center"></TD>
    <TD>
      <P align=justify>As part of the JVFA, the Company entered into an off-take
      agreement with Cariboo for the treatment and refining of certain of copper
      concentrate from the Gibraltar mine. Under the terms of the off-take
      agreement, the Company has secured long-term and fixed rates for
      processing copper concentrate. The Company has the right to price payable
      copper within the concentrate based on a quotational period, declared
      prior to, and covering each ensuing calendar year</P></TD></TR>
  <TR>
    <TD width="5%" align="center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" align="center" vAlign=top><I>(c)</I> </TD>
    <TD>
      <P align=justify><I>Franco-Nevada Gold Stream Transaction</I></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In May 2010, the Company entered into a gold production
      stream transaction with Franco- Nevada Corporation ("Franco-Nevada") under
      which Franco-Nevada purchased a gold stream covering 22% of the
      life-of-mine gold to be produced by the Company from its proposed
      Prosperity gold and copper mine. Commencing with the construction of the
      Prosperity mine, the Company is to receive from Franco-Nevada funding in
      staged deposits totaling US$350,000 (the "Deposit"). Upon delivery of gold
      to Franco-Nevada once the Prosperity mine is in production, fixed price
      payments are to be made to the Company equal to the lesser of US$400 per
      ounce and the spot price at the time of sale (subject to certain
      adjustments).</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>Under the terms of the agreements with Franco-Nevada, the
      unpaid amount of the Deposit will remain refundable until it is reduced to
      nil. The Deposit will be reduced by an amount equal to the difference
      between the spot price of gold and the US$400 per ounce fixed price,
      multiplied by the total ounces of gold delivered to Franco-Nevada. If, at
      the end of the initial 40&#150;year term of the arrangement, the Deposit has
      not been reduced to nil, the Company is to refund the outstanding portion
      of the Deposit to Franco-Nevada.</P></TD></TR></TABLE>
<BR>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_33></A><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left><B>TASEKO MINES LIMITED </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Notes to the Consolidated Financial Statements </TD></TR>
  <TR vAlign=top>
    <TD align=left>For the years ended December 31, 2010 and 2009, and fifteen
      months ended December 31, 2008. </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>(Expressed in
      thousands of Canadian dollars, except per ounce figures, unless stated
      otherwise) </TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%"><B>22.</B> </TD>
    <TD>
      <P align=justify><B>SUPPLEMENTARY CASH FLOW DISCLOSURES</B></P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%"></TD>
    <TD>
      <P align=justify>In addition to the non-cash operating, financing and
      investing activities primarily disclosed, the Company's non-cash
      operating, financing and investing activities were as
  follows:</P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="5%"  >&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="13%">December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="13%">December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="13%">December 31 </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="2%">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>2010    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>2009    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>2008    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Acquisition of assets under capital lease    </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff> 12,923 </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff> 765 </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>$</TD>
    <TD align=right valign="bottom" bgColor=#e6efff> 17,484 </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left>Conversion of convertible debenture (note 14(b)) </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&#150; </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&#150; </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">21,318 </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Decrease in asset retirement costs included
      in mineral properties, plant and equipment (note 15) </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>1,426 </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left>Shares and units issued for the purchase of mineral
      property interests (note 9 (e) &amp; (f)) </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&#150; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&#150; </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">5,220 </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Shares issued for finders fee </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>360 </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left>Shares issued for the purchase of royalty interest (note
      16(b)) </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">7,813 </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&#150; </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&#150; </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Shares issued for donation </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>928 </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left>Fair value of stock options transferred to share capital
      from contributed surplus on exercise of options </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">2,599 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">2,108 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">514 </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align="right" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align="right" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align="right" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD>&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD valign="bottom">&nbsp;</TD>
    <TD align="right" valign="bottom">&nbsp; </TD>
    <TD valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" bgColor=#e6efff>&nbsp; </TD>
    <TD valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align="right" valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align="right" valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD align="right" valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left><B>Supplemental cash flow information</B> </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=left valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">&nbsp; </TD>
    <TD align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left bgColor=#e6efff>Cash paid during the year for </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD align=left>&nbsp; &nbsp;Interest </TD>
    <TD align=right valign="bottom">$</TD>
    <TD align=right valign="bottom"> 2,696 </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">$</TD>
    <TD align=right valign="bottom"> 4,461 </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
    <TD align=right valign="bottom">$</TD>
    <TD align=right valign="bottom"> 2,844 </TD>
    <TD align=right valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD >&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>&nbsp; &nbsp;Taxes </TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"> 1,911 </TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"> 98 </TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">$</TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid"> 315 </TD>
    <TD align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 2px solid">&nbsp;</TD>
  </TR></TABLE>
<BR>
<HR align=center width="100%" color=black noShade SIZE=5>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>3
<FILENAME>exhibit99-2.htm
<DESCRIPTION>MANAGEMENT'S DISCUSSION AND ANALYSIS FOR THE YEAR ENDED DECEMBER 31, 2010
<TEXT>
<HTML>
<HEAD>
   <TITLE>Taseko Mines Ltd.: Exhibit 99.2 - Filed by newsfilecorp.com</TITLE>
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<TABLE
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cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD></TR></TABLE>
<P align=center><B>T A B L E &nbsp;&nbsp;O F &nbsp;&nbsp;C O N T E N T S</B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD width="9%" align=left bgColor=#eeeeee ><A
      href="#page_2">1.1
      </A></TD>
    <TD align=left width="9%" bgColor=#eeeeee ><A
      href="#page_2">Date
      </A></TD>
    <TD align=left width="77%" bgColor=#eeeeee>&nbsp; <A
      href="#page_2"></A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_2">2
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_3">1.2
      </A></TD>
    <TD align=left width="9%" ><A
      href="#page_3">Overview
      </A></TD>
    <TD align=left width="77%">&nbsp; <A
      href="#page_3"></A></TD>
    <TD align=right width="5%" ><A
      href="#page_3">3
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee >&nbsp; <A
      href="#page_4"></A></TD>
    <TD align=left width="9%" bgColor=#eeeeee ><A
      href="#page_4">1.2.1
      </A></TD>
    <TD align=left width="77%" bgColor=#eeeeee><A
      href="#page_4">Gibraltar
      Mine </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_4">4
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; <A
      href="#page_9"></A></TD>
    <TD align=left width="9%" ><A
      href="#page_9">1.2.2
      </A></TD>
    <TD align=left width="77%"><A
      href="#page_9">Prosperity
      Project </A></TD>
    <TD align=right width="5%" ><A
      href="#page_9">9
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee >&nbsp; <A
      href="#page_11"></A></TD>
    <TD align=left width="9%" bgColor=#eeeeee ><A
      href="#page_11">1.2.3
      </A></TD>
    <TD align=left width="77%" bgColor=#eeeeee><A
      href="#page_11">Harmony
      Project </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_11">11
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; <A
      href="#page_11"></A></TD>
    <TD align=left width="9%" ><A
      href="#page_11">1.2.4
      </A></TD>
    <TD align=left width="77%"><A
      href="#page_11">Aley
      Project </A></TD>
    <TD align=right width="5%" ><A
      href="#page_11">11
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee >&nbsp; <A
      href="#page_12"></A></TD>
    <TD align=left width="9%" bgColor=#eeeeee ><A
      href="#page_12">1.2.5
      </A></TD>
    <TD align=left width="77%" bgColor=#eeeeee><A
      href="#page_12">Market
      Trends </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_12">12
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_13">1.3
      </A></TD>
    <TD align=left colSpan=2><A
      href="#page_13">Selected
      Annual Information </A></TD>
    <TD align=right width="5%" ><A
      href="#page_13">13
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee ><A
      href="#page_14">1.4
      </A></TD>
    <TD align=left bgColor=#eeeeee colSpan=2><A
      href="#page_14">Summary
      of Quarterly Results </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_14">14
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_15">1.5
      </A></TD>
    <TD align=left colSpan=2><A
      href="#page_15">Results
      of Operations </A></TD>
    <TD align=right width="5%" ><A
      href="#page_15">15
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee ><A
      href="#page_16">1.6
      </A></TD>
    <TD align=left width="9%" bgColor=#eeeeee ><A
      href="#page_16">Liquidity
      </A></TD>
    <TD align=left width="77%" bgColor=#eeeeee>&nbsp; <A
      href="#page_16"></A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_16">16
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_17">1.7
      </A></TD>
    <TD align=left colSpan=2><A
      href="#page_17">Capital
      Resources </A></TD>
    <TD align=right width="5%" ><A
      href="#page_17">17
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee ><A
      href="#page_19">1.8
      </A></TD>
    <TD align=left bgColor=#eeeeee colSpan=2><A
      href="#page_19">Off-Balance
      Sheet Arrangements </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_19">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_19">1.9
      </A></TD>
    <TD align=left colSpan=2><A
      href="#page_19">Transactions
      with Related Parties </A></TD>
    <TD align=right width="5%" ><A
      href="#page_19">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee ><A
      href="#page_19">1.10
      </A></TD>
    <TD align=left bgColor=#eeeeee colSpan=2><A
      href="#page_19">Fourth
      Quarter </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_19">19
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_21">1.11
      </A></TD>
    <TD align=left colSpan=2><A
      href="#page_21">Proposed
      Transactions </A></TD>
    <TD align=right width="5%" ><A
      href="#page_21">21
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee ><A
      href="#page_22">1.12
      </A></TD>
    <TD align=left bgColor=#eeeeee colSpan=2><A
      href="#page_22">Critical
      Accounting Estimates </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_22">22
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_24">1.13
      </A></TD>
    <TD align=left colSpan=2><A
      href="#page_24">Change
      in Accounting Policies including Initial Adoption </A></TD>
    <TD align=right width="5%" ><A
      href="#page_24">24
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee ><A
      href="#page_25">1.14
      </A></TD>
    <TD align=left bgColor=#eeeeee colSpan=2><A
      href="#page_25">International
      Financial Reporting Standards (IFRS) </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_25">25
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left ><A
      href="#page_32">1.15
      </A></TD>
    <TD align=left colSpan=2><A
      href="#page_32">Financial
      Instruments and Other Instruments </A></TD>
    <TD align=right width="5%" ><A
      href="#page_32">32
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee ><A
      href="#page_34">1.16
      </A></TD>
    <TD align=left bgColor=#eeeeee colSpan=2><A
      href="#page_34">Other
      MD&amp;A Requirements </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_34">34
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; <A
      href="#page_34"></A></TD>
    <TD align=left width="9%" ><A
      href="#page_34">1.16.1
      </A></TD>
    <TD align=left width="77%"><A
      href="#page_34">Additional
      Disclosure for Venture Issuers without Significant Revenue </A></TD>
    <TD align=right width="5%" ><A
      href="#page_34">34
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee >&nbsp; <A
      href="#page_35"></A></TD>
    <TD align=left width="9%" bgColor=#eeeeee ><A
      href="#page_35">1.16.2
      </A></TD>
    <TD align=left width="77%" bgColor=#eeeeee><A
      href="#page_35">Disclosure
      of Outstanding Share Data </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_35">35
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; <A
      href="#page_35"></A></TD>
    <TD align=left width="9%" ><A
      href="#page_35">1.16.3
      </A></TD>
    <TD align=left width="77%"><A
      href="#page_35">Internal
      Controls over Financial Reporting Procedures </A></TD>
    <TD align=right width="5%" ><A
      href="#page_35">35
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee >&nbsp; <A
      href="#page_36"></A></TD>
    <TD align=left width="9%" bgColor=#eeeeee ><A
      href="#page_36">1.16.4
      </A></TD>
    <TD align=left width="77%" bgColor=#eeeeee><A
      href="#page_36">Disclosure
      Controls and Procedures </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_36">36
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left >&nbsp; <A
      href="#page_37"></A></TD>
    <TD align=left width="9%" ><A
      href="#page_37">1.16.5
      </A></TD>
    <TD align=left width="77%"><A
      href="#page_37">Non
      GAAP Measures </A></TD>
    <TD align=right width="5%" ><A
      href="#page_37">37
      </A></TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#eeeeee >&nbsp; <A
      href="#page_38"></A></TD>
    <TD align=left width="9%" bgColor=#eeeeee ><A
      href="#page_38">1.16.6
      </A></TD>
    <TD align=left width="77%" bgColor=#eeeeee><A
      href="#page_38">Risk
      Factors </A></TD>
    <TD align=right width="5%" bgColor=#eeeeee ><A
      href="#page_38">38
      </A></TD></TR></TABLE>
<P align=center>1</P>
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<TABLE width="100%" border=0 cellPadding=0
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  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><FONT color=#0000ff>1.1 Date</FONT></B></P>
<P align=justify>This Management Discussion and Analysis ("MD&amp;A") should be
read in conjunction with the audited consolidated financial statements of Taseko
Mines Limited ("Taseko" or the "Company") for the years ended December 31, 2010,
December 31, 2009, and the fifteen months ended December 31, 2008, prepared in
accordance with Canadian generally accepted accounting principles, and publicly
available on SEDAR at <U><FONT color=#0000ff>www.sedar.com</FONT></U>.</P>
<P align=justify>This MD&amp;A is prepared as of March 16, 2011. All dollar
figures stated herein are expressed in Canadian dollars, unless otherwise
specified.</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left>
      <P align=justify>This discussion includes certain statements that may be
      deemed "forward-looking statements". All statements in this discussion,
      other than statements of historical facts, that address future production,
      reserve potential, exploration drilling, exploitation activities and
      events or developments that the Company expects are forward-looking
      statements. Although the Company believes the expectations expressed in
      such forward-looking statements are based on reasonable assumptions, such
      statements are not guarantees of future performance and actual results or
      developments may differ materially from those in the forward-looking
      statements. Factors that could cause actual results to differ materially
      from those in forward-looking statements include market prices,
      exploitation and exploration successes, continued availability of capital
      and financing and general economic, market or business conditions.
      Investors are cautioned that any such statements are not guarantees of
      future performance and actual results or developments may differ
      materially from those projected in the forward-looking statements.
  </P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=3 width="100%" border=0>

  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #ff0000 1px solid; BORDER-TOP: #ff0000 1px solid; BORDER-LEFT: #ff0000 1px solid"
    borderColor=#000000 align=center><B><FONT color=#ff0000>Cautionary Note to
      Investors Concerning Estimates of Measured and Indicated
      Resources</FONT></B> <BR>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #ff0000 1px solid; BORDER-LEFT: #ff0000 1px solid; BORDER-BOTTOM: #ff0000 1px solid"
    borderColor=#000000 align=left>
      <P align=justify>This discussion uses the terms 'measured resources' and
      'indicated resources'. The Company advises investors that while those
      terms are recognized and required by Canadian regulations, the U.S.
      Securities and Exchange Commission does not recognize them. <B>Investors
      are cautioned not to assume that any</B> <B>part or all of mineral
      deposits in these categories will ever be converted into reserves.</B>
    </P></TD></TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=3 width="100%" border=0>

  <TR vAlign=bottom>
    <TD
    style="BORDER-RIGHT: #ff0000 1px solid; BORDER-TOP: #ff0000 1px solid; BORDER-LEFT: #ff0000 1px solid"
    borderColor=#000000 align=center><B><FONT color=#ff0000>Cautionary Note to
      Investors Concerning Estimates of Inferred Resources</FONT></B>
      <BR>&nbsp;&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #ff0000 1px solid; BORDER-LEFT: #ff0000 1px solid; BORDER-BOTTOM: #ff0000 1px solid"
    borderColor=#000000 align=left>
      <P align=justify>This discussion uses the term 'inferred resources'. The
      Company advises investors that while this term is recognized and required
      by Canadian regulations, the U.S. Securities and Exchange Commission does
      not recognize it. 'Inferred resources' have a great amount of uncertainty
      as to their existence, and as to their economic and legal feasibility. It
      cannot be assumed that all or any part of a mineral resource will ever be
      upgraded to a higher category. Under Canadian rules, estimates of Inferred
      Mineral Resources may not form the basis of economic studies, except in
      rare cases. <B>Investors are cautioned not to assume that</B> <B>any part
      or all of an inferred resource exists, or is economically or legally
      mineable.</B> </P></TD></TR></TABLE>
<P align=center>2</P>
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  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=3 width="100%" border=0>

  <TR vAlign=bottom>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center>Cash Cost of Production
      <BR>&nbsp;&nbsp;&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>
      <P align=justify>This management discussion uses the term cash cost of
      production which is a non-GAAP measure intended to provide additional
      information to investors and should not be considered in isolation or as a
      substitute for measures of performance prepared in accordance with GAAP
      (see 1.16.5). Cash cost of production is a common performance measure in
      the copper industry and includes direct cost of operations and related
      costs through to refined metal, excluding amortization.
</P></TD></TR></TABLE><BR>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left><B>Taseko&#146;s 75% (effective March 31, 2010) owned Gibraltar
      Mine is located north of the City of</B> <B>Williams Lake in south-central
      British Columbia. Sales and production volumes from the Gibraltar</B>
      <B>Mine (the &#147;Gibraltar Joint Venture&#148; or the &#147;Joint Venture&#148;) reflected
      in this MD&amp;A are on a</B> <B>100% basis unless otherwise
      indicated.</B> </TD></TR></TABLE>
<P align=justify><B><FONT color=#0000ff>1.2 Overview</FONT></B></P>
<P align=justify>Taseko is a mining and mine development company with one
operating mine, two advanced stage projects and one exploration property, all
located in British Columbia, Canada. These are the Gibraltar copper-molybdenum
mine, the Prosperity gold-copper project, the Harmony gold project and the Aley
niobium project.</P>
<P align=justify>During the year ended December 31, 2010, Taseko has continued
to focus on completing capital upgrade projects in order to increase throughput
and metal recovery at its Gibraltar mine and on advancing engineering,
permitting and financing for the Prosperity project.</P>
<P align=justify>On March 31, 2010, the Gibraltar mine became a joint venture
with Cariboo Copper Corp. (&#147;Cariboo&#148;). Taseko and Cariboo now hold 75% and 25%
interests, respectively, in the mine and Taseko continues to be the operator.
</P>
<P align=justify>Taseko had an operating profit of $125.5 million and earnings
before tax and other items of $107.2 million for the year ended December 31,
2010, compared to an operating profit of $48.3 million and earnings before tax
and other items of $27.0 million for the year ended December 31, 2009. Other
items included a gain on the sale of the 25% interest in the Gibraltar mine (to
the Joint Venture) in the amount of $95.1 million and an unrealized (non-cash)
marked-to-market loss attributable to derivative instruments of $6.9
million.</P>
<P align=justify>Net earnings were $148.6 million or $0.80 per share for the
year ended December 31, 2010 as compared to net earnings of $10.6 million or
$0.06 per share for the year ended December 31, 2009. Net earnings for the year
were higher than the prior year due to increases in Gibraltar&#146;s production
capacity, the significant impact of increased sales volumes, as well as
continued strength in the metals markets, resulting in much higher average
prices realized in fiscal 2010. In addition, the gain realized on the sale of
the 25% interest in the Gibraltar mine in the amount of $95.1 million
contributed to the higher earnings. </P>
<P align=justify>During the year ended December 31, 2010, the Gibraltar mine
produced 92.3 million pounds of copper and 941,000 pounds of molybdenum. Total
cash costs for the year averaged US$1.70 per pound of copper produced. </P>
<P align=center>3</P>
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<TABLE width="100%" border=0 cellPadding=0
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style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>In the quarter ended December 31, 2010, the Gibraltar mine
produced 23.4 million pounds of copper and 276,000 lbs of molybdenum. </P>
<P align=justify>A number of major capital projects were undertaken during the
year. These included the in-pit crusher and conveyor system, upgrades to the
concentrate filter/dryer circuits and tailings handling system, and the Semi
Autogenous Grinding (SAG) mill direct feed system that is scheduled to be
commissioned in early 2011.</P>
<P align=justify>During the year, the Company prepaid its US$50 million credit
facility with Credit Suisse and Investec Bank PLC without penalty. The Company
also exercised its &#147;call&#148; option to redeem the Gibraltar Royalty Limited
Partnership ("GRLP") royalty obligation through the issuance of 1,556,355 shares
of the Company.</P>
<P align=justify>In 2011, the Company plans to move forward with a further
expansion at Gibraltar. Gibraltar Development Plan 3 (GDP-3) will include
construction of a 30,000 ton per day (&#147;tpd&#148;) concentrator to complement the
existing 55,000 tpd facility, increasing annual production capacity to 180
million pounds of copper. A new molybdenum recovery facility is also planned to
increase annual molybdenum production to more than two million pounds. The
capital cost for infrastructure related to the increased production capacity is
expected to be $235 million, with an additional mining equipment requirement of
approximately $90 million.</P>
<P align=justify>Taseko has also submitted a new Project Description to the
Federal Government to advance permitting for the Prosperity project. The Company
also plans delineation drilling and engineering at the Aley Project. </P>
<P align=justify><B>1.2.1 Gibraltar Mine</B></P>
<P align=justify>The Gibraltar mine is located north of the City of Williams
Lake in south-central British Columbia. The following sales and production
volumes and prices are on a 100% basis.</P>
<P align=justify><B><I>Three-Month Sales </I></B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Copper-in-concentrate sales for the three months ended December 31, 2010
  were 32.7 million pounds compared to 16.2 million pounds sold during the three
  months ended December 31, 2009. </P>
  <LI>
  <P>There were 0.9 million pounds of copper cathode sold in the three months
  ended December 31, 2010 compared to 0.6 million pounds sold in the three
  months ended December 31, 2009. </P>
  <LI>
  <P>The average price realized for sales of copper during the three months
  ended December 31, 2010 was US$4.12 per pound, compared to US$3.10 per pound
  realized in the three months ended December 31, 2009. The realized price
  included adjustments on final invoices related to prior quarters. </P>
  <LI>
  <P>Molybdenum-in-concentrate sales for the three months ended December 31,
  2010 were 261,000 pounds compared to 97,000 pounds sold in the three months
  ended December 31, 2009. </P>
  <LI>
  <P>The average price realized for sales of molybdenum for the three months
  ended December 31, 2010 was US$16.24 per pound, compared to US$12.01 per pound
  realized in the three months ended December 31, 2009. </P></LI></UL>
<P align=center>4</P>
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<TABLE width="100%" border=0 cellPadding=0
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  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><I>Twelve-Month Sales </I></B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Copper-in-concentrate sales increased to 84.8 million pounds for the year
  ended December 31, 2010 from the 65.9 million pounds sold during the year
  ended December 31, 2009. </P>
  <LI>
  <P>Copper cathode sales decreased in the year ended December 31, 2010 to 1.5
  million pounds compared to 2.2 million pounds in the year ended December 31,
  2009. </P>
  <LI>
  <P>The average price realized for sales of copper in the year ended December
  31, 2010 was US$3.66 per pound, compared to US$2.31 per pound realized in the
  year ended December 31, 2009. </P>
  <LI>
  <P>Molybdenum-in-concentrate sales increased to 924,000 pounds in the year
  ended December 31, 2010 from 692,000 pounds sold in the year ended December
  31, 2009. </P>
  <LI>
  <P>The average price realized for sales of molybdenum for the year ended
  December 31, 2010 was US$16.32 per pound, compared to US$11.02 per pound
  realized in the year ended December 31, 2009. </P></LI></UL>
<P align=justify><B><I>Year-end Inventory</I></B></P>
<UL style="TEXT-ALIGN: justify">
  <LI>
  <P>Copper-in-concentrate inventory at December 31, 2010 was 5.0 million pounds
  compared to 3.8 million pounds at December 31, 2009. </P>
  <LI>
  <P>Copper cathode inventory at December 31, 2010 was 0.5 million pounds
  compared to 0.1 million pounds at December 31, 2009. </P>
  <LI>
  <P>Molybdenum-in-concentrate inventory at December 31, 2010 was 33,000 pounds
  compared to 16,000 pounds at December 31, 2009. </P></LI></UL>
<P align=center>5</P>
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noShade SIZE=5>
<A name=page_6></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><I>Gibraltar Mine Production and Cost
Performance</I></B></P>
<P align=justify>The following table is a summary of operating statistics
(100%):</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD align=left bgcolor="#E0E0E0"><BR>
      <BR><BR></TD>
    <TD width="13%" align=center bgcolor="#E0E0E0"><B>Year </B><BR>
      <B>ended </B><BR><B>December
      31, </B><BR><B>2010 </B></TD>
    <TD width="13%" align=center bgcolor="#E0E0E0"><B>Year </B><BR>
      <B>ended </B><BR><B>December
      31, </B><BR><B>2009 </B></TD>
    <TD width="13%" align=center bgcolor="#E0E0E0"><B>Three months </B><BR>
      <B>ended
      </B><BR><B>December 31, </B><BR><B>2010 </B></TD>
    <TD width="13%" align=center bgcolor="#E0E0E0"><B>Three months </B><BR>
      <B>ended
      </B><BR><B>December 31, </B><BR><B>2009 </B></TD></TR>
  <TR vAlign=top>
    <TD align=left>Total tons mined (millions)<SUP>1 </SUP></TD>
    <TD width="13%" align=center valign="middle">52.3 </TD>
    <TD width="13%" align=center valign="middle">34.9 </TD>
    <TD width="13%" align=center valign="middle">15.6 </TD>
    <TD width="13%" align=center valign="middle">11.3 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Tons of ore milled (millions) </TD>
    <TD width="13%" align=center valign="middle">15.0 </TD>
    <TD width="13%" align=center valign="middle">13.0 </TD>
    <TD width="13%" align=center valign="middle">3.9 </TD>
    <TD width="13%" align=center valign="middle">3.2 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Stripping ratio </TD>
    <TD width="13%" align=center valign="middle">2.5 </TD>
    <TD width="13%" align=center valign="middle">1.8 </TD>
    <TD width="13%" align=center valign="middle">2.9 </TD>
    <TD width="13%" align=center valign="middle">2.2 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper grade (%) </TD>
    <TD width="13%" align=center valign="middle">0.338 </TD>
    <TD width="13%" align=center valign="middle">0.319 </TD>
    <TD width="13%" align=center valign="middle">0.333 </TD>
    <TD width="13%" align=center valign="middle">0.319 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Molybdenum grade (%) </TD>
    <TD width="13%" align=center valign="middle">0.012 </TD>
    <TD width="13%" align=center valign="middle">0.011 </TD>
    <TD width="13%" align=center valign="middle">0.012 </TD>
    <TD width="13%" align=center valign="middle">0.010 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper recovery (%) </TD>
    <TD width="13%" align=center valign="middle">89.2 </TD>
    <TD width="13%" align=center valign="middle">82.3 </TD>
    <TD width="13%" align=center valign="middle">89.1 </TD>
    <TD width="13%" align=center valign="middle">84.1 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Molybdenum recovery (%) </TD>
    <TD width="13%" align=center valign="middle">25.5 </TD>
    <TD width="13%" align=center valign="middle">24.4 </TD>
    <TD width="13%" align=center valign="middle">29.8 </TD>
    <TD width="13%" align=center valign="middle">20.9 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper production (millions lb) <SUP>2 </SUP></TD>
    <TD width="13%" align=center valign="middle">92.3 </TD>
    <TD width="13%" align=center valign="middle">70.3 </TD>
    <TD width="13%" align=center valign="middle">23.4 </TD>
    <TD width="13%" align=center valign="middle">17.4 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Molybdenum production (thousands lb) </TD>
    <TD width="13%" align=center valign="middle">941 </TD>
    <TD width="13%" align=center valign="middle">629 </TD>
    <TD width="13%" align=center valign="middle">276 </TD>
    <TD width="13%" align=center valign="middle">113 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Foreign exchange ($C/$US) </TD>
    <TD width="13%" align=center valign="middle">1.03 </TD>
    <TD width="13%" align=center valign="middle">1.14 </TD>
    <TD width="13%" align=center valign="middle">1.01 </TD>
    <TD width="13%" align=center valign="middle">1.06 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Copper production costs, net of by-product
      credits<SUP>3</SUP> , per lb of copper </TD>
    <TD width="13%" align=center valign="middle">US$1.34 </TD>
    <TD width="13%" align=center valign="middle">US$1.24 </TD>
    <TD width="13%" align=center valign="middle">US$1.38 </TD>
    <TD width="13%" align=center valign="middle">US$1.67 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Off-property costs for transport, treatment &amp;
      marketing per lb of copper </TD>
    <TD width="13%" align=center valign="middle">US$0.36 </TD>
    <TD width="13%" align=center valign="middle">US$0.30 </TD>
    <TD width="13%" align=center valign="middle">US$0.49 </TD>
    <TD width="13%" align=center valign="middle">US$0.31 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Total cash costs of production per lb of copper<SUP>4
      </SUP></TD>
    <TD width="13%" align=center valign="middle">US$1.70 </TD>
    <TD width="13%" align=center valign="middle">US$1.54 </TD>
    <TD width="13%" align=center valign="middle">US$1.87 </TD>
    <TD width="13%" align=center valign="middle">US$1.98 </TD>
  </TR></TABLE><BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>1 </SUP></TD>
    <TD>
      <P align=justify>Total tons mined includes sulphide ore, low grade
      stockpile material, overburden, and waste rock which were moved from
      within pit limit to outside pit limit during the period.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>2 </SUP></TD>
    <TD>
      <P align=justify>Copper production includes concentrate and
  cathode.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>3 </SUP></TD>
    <TD>
      <P align=justify>By-product credit is calculated on actual period
      sales.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><SUP>4 </SUP></TD>
    <TD>
      <P align=justify>See Section 1.16.5.</P></TD></TR></TABLE>
<P align=justify>Total tons mined in 2010 were higher than in 2009 in order to
meet the increased processing capacity of the mill and to operate closer to the
deposit average strip ratio based on continued strength in the price of copper.
The Gibraltar concentrator continued to perform well on copper recovery while
throughput steadily increased toward the targeted 55,000 tons per day level.
Copper and molybdenum production levels have been increasing throughout the
year, due to the completion of concentrator capital projects, increased mill
throughput, and an increase in the copper head grade and recovery. </P>
<P align=justify>Total per pound cash costs of production for the year ended
December 31, 2010 were higher than the same period 2009 as a result of increased
stripping ratio (US$0.17), strengthening Canadian dollar against the US dollar
(US$0.17), higher prices for fuel, reagents and grinding media (US$0.05), and
increased off property transportation costs (US$ 0.06) for the year. These
increased costs were partially offset by lower mining and milling costs realized
from new equipment (US$0.23) and increased molybdenum by-product value (US$0.06)
..</P>
<P align=center>6</P>
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noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><I>Gibraltar Joint Venture</I></B></P>
<P align=justify>The Gibraltar mine became an unincorporated joint venture
between Taseko and Cariboo (a Japanese consortium) on March 31, 2010. The
Company and Cariboo hold 75% and 25% beneficial interests in the Joint Venture,
respectively. Under the Joint Venture Agreement, the Company contributed certain
assets and liabilities pertaining to the Gibraltar mine with a deemed fair value
of $747 million to the Joint Venture at March 31, 2010, and Cariboo paid the
Company US$187 million to obtain a 25% interest in the Joint Venture. The
Company continues to be the operator of the Gibraltar mine.</P>
<P align=justify>The assets and liabilities contributed by the Company into the
Joint Venture were primarily mineral property interests, plant and equipment,
inventory, prepaid expenses, reclamation deposits, equipment loans, and capital
lease obligations and the site closure and reclamation obligation.</P>
<P align=justify>The Company&#146;s 75% interest in the assets and liabilities of the
Joint Venture as at December 31, 2010, are as follows:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD
    style="BORDER-TOP: #000000 2px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left><B><I>($ in thousands)</I></B> </TD>
    <TD
    style="BORDER-TOP: #000000 2px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="5%">&nbsp;</TD>
    <TD width="12%" align=right nowrap
    borderColor=#000000 style="BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2010</B> </TD>
  <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 2px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>Assets </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=left
    width="5%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=left
    bgColor=#e6efff>&nbsp;Current assets </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=right
    width="5%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;97,713 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>&nbsp;Advances for equipment </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=right
    width="5%">&nbsp;</TD>
    <TD align=right width="12%">1,188 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=left
    bgColor=#e6efff>&nbsp;Reclamation deposits </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=right
    width="5%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="12%" bgColor=#e6efff>22,977 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>&nbsp;Mineral property interests, plant and equipment, net </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=right
    width="5%">&nbsp;</TD>
    <TD align=right width="12%">301,219 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
    bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=right
    width="5%" bgColor=#e6efff>&nbsp;</TD>
    <TD width="12%" bgColor=#e6efff>&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>Liabilities </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=right
    width="5%">&nbsp;</TD>
    <TD align=left width="12%">&nbsp; </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=left
    bgColor=#e6efff>&nbsp;Current liabilities </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=right
    width="5%" bgColor=#e6efff>$</TD>
    <TD align=right width="12%" bgColor=#e6efff>&nbsp;29,538 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=left
    width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>&nbsp;Long-term liabilities </TD>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000 align=left
    width="5%">&nbsp;</TD>
    <TD align=right width="12%">28,019 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 2px solid"
    borderColor=#000000 align=left bgColor=#e6efff>&nbsp;Site closure &amp;
      reclamation obligation </TD>
    <TD style="BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 2px solid"
    borderColor=#000000 align=left width="5%" bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="12%"
    bgColor=#e6efff>8,178 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 2px solid"
    borderColor=#000000 align=left width="2%"
  bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>Included within the Company&#146;s statement of operations and
comprehensive income (loss) for the year ended December 31, 2010 is the
Company's 75% interest in the operations of the Joint Venture for the period
from March 31, 2010 (inception of the Joint Venture) to December 31, 2010 and
its 100% interest in the Gibraltar mine for the period January 1, 2010 through
March 31, 2010. The 75% interest is summarized as follows:</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0 align=center>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000
      align=left><B><I>($ in thousands)</I></B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD
    width="20%" align=right nowrap borderColor=#000000 style="BORDER-TOP: #000000 1px solid"><B>From March 31, 2010 to</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000 align=left
    width="3%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD
      width="20%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="3%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Revenues </TD>
    <TD align=left width="2%" bgColor=#e6efff>$</TD>
    <TD align=right width="20%" bgColor=#e6efff>&nbsp;194,370 </TD>
    <TD align=left width="3%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Operating expenses </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=right width="20%">97,461 </TD>
    <TD align=left width="3%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Depreciation and depletion </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="20%" bgColor=#e6efff>7,092 </TD>
    <TD align=left width="3%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Other expenses </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=right width="20%">4,867 </TD>
    <TD align=left width="3%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Other comprehensive loss </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="20%"
    bgColor=#e6efff>39 </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="3%"
    bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left><B>Total
      comprehensive income</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=left
      width="2%"><B>$</B></TD>
    <TD style="BORDER-BOTTOM: #000000 3px double" align=right
      width="20%"><B>&nbsp;84,911</B> </TD>
<TD style="BORDER-BOTTOM: #000000 3px double" align=left
    width="3%">&nbsp;</TD></TR></TABLE>
<P align=center>7</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_8></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>Included within the cash flows of the Company for the year
ended December 31, 2010 are the Company&#146;s 100% interest for the period in the
Gibraltar mine for the period January 1, 2010 through March 31, 2010 and its 75%
interest in the cash flows of the Joint Venture for the period from March 31,
2010 to December 31, 2010. This 75% interest is reflected as follows:</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0 align=center>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000
      align=left><B><I>($ in thousands)</I></B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD
    width="20%" align=right nowrap borderColor=#000000 style="BORDER-TOP: #000000 1px solid"><B>From March 31, 2010 to</B> </TD>
    <TD style="BORDER-TOP: #000000 1px solid" borderColor=#000000 align=left
    width="3%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD
      width="20%" align=right nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="3%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Operating activities </TD>
    <TD align=left width="2%" bgColor=#e6efff>$</TD>
    <TD align=right width="20%" bgColor=#e6efff>&nbsp;93,103 </TD>
    <TD align=left width="3%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Investing activities </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=right width="20%">(44,496</TD>
    <TD align=left width="3%">) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
      bgColor=#e6efff>Financing activities </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="20%"
    bgColor=#e6efff>8,270 </TD>
<TD style="BORDER-BOTTOM: #000000 1px solid" align=left width="3%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify><B><I>Infrastructure and Mining Fleet Upgrades </I></B></P>
<P align=justify>The new in-pit 60-inch by 89-inch crusher and overland conveyor
system was completed and commissioned mid-2010. The system is designed to reduce
operating costs and improve mine productivity by replacing the original
Gibraltar crusher and supplanting approximately three diesel-powered haulage
trucks with an electrically driven overland conveyor belt.</P>
<P align=justify>Replacement of the single-line tailings system with a two-line
system and substitution of the natural gas-fired concentrate dryer with a filter
press was completed in 2010. This equipment reduces operating costs and provides
a more stable operating platform, and will be able to manage increased volume as
mill throughput increases.</P>
<P align=justify>Construction of the SAG direct feed system was started in the
third quarter of 2010. The system is designed to improve mill availability,
increase throughput and reduce costs by eliminating the complicated secondary
crusher and fine ore feed system. The new direct feed system will also allow
larger mill feed more appropriate for autogenous grinding than can be achieved
with the current system. The direct feed system is scheduled to be commissioned
during the second quarter of 2011.</P>
<P align=justify>The Gibraltar mine has continued to invest in the mining fleet
during the year, purchasing four new 320 ton capacity haulage trucks all of
which have been delivered to the mine. Two of the trucks were assembled and put
into operation in October and the second two became operational in December.
Also, the construction of a new Bucyrus 495 cable shovel was completed and the
machine was commissioned in October 2010.</P>
<P align=justify>Copper production for the year ended December 31, 2010 (92.3
million pounds) was 31% higher than in 2009 (70.3 million pounds) as a result of
the investments and operational improvements which have occurred at
Gibraltar.</P>
<P align=justify><B><I>Labour</I></B></P>
<P align=justify>The number of active personnel at the site at the end of
December 2010 was 455, compared to 377 personnel at the end of December 2009.
</P>
<P align=center>8</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_9></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><I>Mineral Reserves</I></B></P>
<P align=justify>The Gibraltar mine mineral reserves are based on the published
reserves at December 31, 2008 and depleted for ore production from the Granite
pit in 2009 and 2010.</P>
<P align=justify>The proven and probable reserves as of December 31, 2010 are
tabulated in the table below and are NI 43-101 and SEC Guide 7 compliant.</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=3 width="70%" border=0 align=center>

  <TR vAlign=top>
    <TD colSpan=5 align=center
    borderColor=#000000 bgcolor="#E6E6E6"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid"><B>Gibraltar Mine Mineral
      Reserves</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD colSpan=5 align=center
    borderColor=#000000 bgcolor="#E6E6E6"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid">At 0.20% copper cut-off </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left><B>Pit</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=left width="20%"><B>Category</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>Tons</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>Cu</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=center
    width="20%"><B>Mo</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="20%">&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>(millions)</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>(%)</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>(%)</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>Connector </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=left width="20%">Proven </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%">40.4 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%">0.296 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=center
    width="20%">0.010 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=left width="20%">Probable </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">14.8 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">0.271 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">0.009 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="20%"><B>Subtotal</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>55.2</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>0.289</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>0.010</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>Gibraltar East </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=left width="20%">Proven </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%">66.8 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%">0.286 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=center
    width="20%">0.008 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=left width="20%">Probable </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">33.3 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">0.285 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">0.013 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="20%"><B>Subtotal</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>100.1</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>0.286</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>0.010</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>Granite </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=left width="20%">Proven </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%">163.4 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%">0.323 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=center
    width="20%">0.009 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=left width="20%">Probable </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">21.6 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">0.319 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">0.009 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="20%"><B>Subtotal</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>185.0</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>0.322</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>0.009</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>Gibraltar Extension </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=left width="20%">Proven </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%">75.4 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center width="20%">0.352 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid" borderColor=#000000 align=center
    width="20%">0.002 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=left width="20%">Probable </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">29.3 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">0.304 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 3px double"
    borderColor=#000000 align=center width="20%">0.002 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>&nbsp; </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left width="20%"><B>Subtotal</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>104.7</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>0.339</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=center width="20%"><B>0.002</B> </TD></TR>
  <TR vAlign=top>
    <TD align=center
    borderColor=#000000 bgcolor="#E6E6E6" style="BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid">Total </TD>
    <TD width="20%" align=left bgcolor="#E6E6E6" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;    </TD>
    <TD width="20%" align=center
    borderColor=#000000 bgcolor="#E6E6E6"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid">445.0 </TD>
    <TD width="20%" align=center
    borderColor=#000000 bgcolor="#E6E6E6"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid">0.314 </TD>
    <TD width="20%" align=center
    borderColor=#000000 bgcolor="#E6E6E6"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid">0.008</TD>
</TR></TABLE>
<P align=justify>The mineral reserve estimations were completed by Taseko staff
under the supervision of Scott Jones, P.Eng., Vice-President, Engineering and a
Qualified Person under National Instrument 43-101. </P>
<P align=justify><B>1.2.2 Prosperity Project</B></P>
<P align=justify>Taseko holds a 100% interest in the Prosperity project, located
125 kilometers southwest of the City of Williams Lake. The property hosts a
large porphyry gold-copper deposit amenable to open pit mining. </P>
<P align=justify><B><I>Mineral Reserves and Resources</I></B></P>
<P align=justify>During 2009, the Company announced the results of a review of
the mineral reserves for the Prosperity project. The reserves (tabulated below)
are based on a C$5.50 net smelter return (&#147;NSR&#148;) cut-off using gold and copper
prices of US$650/oz and US$1.65/lb, respectively.</P>
<P align=center>9</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_10></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<BR>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
borderColor=#000000 cellSpacing=0 cellPadding=3 width="100%" border=1>

  <TR vAlign=top>
    <TD colSpan=8 align=center vAlign=bottom bgcolor="#E6E6E6"><B>Prosperity Project Mineral
      Reserves</B><br>
    at C$5.50 NSR/t cut-off </TD></TR>

  <TR vAlign=top>
    <TD vAlign=bottom align=center rowSpan=2><B>Category</B> </TD>
    <TD width="12%" rowSpan=2 align=center vAlign=bottom><B>Tonnes</B>
      <BR><B>(millions)</B> </TD>
    <TD vAlign=bottom align=center colSpan=2><B>Grade</B> </TD>
    <TD vAlign=bottom align=center colSpan=2>&nbsp;<B>Recoverable
      Metal</B> </TD>
    <TD vAlign=bottom align=center colSpan=2>&nbsp;<B>Contained
      Metal</B> </TD></TR>
  <TR vAlign=top>
    <TD width="12%" align=center vAlign=bottom
      ><STRONG>Au<BR></STRONG> <B>(g/t)</B>&nbsp;&nbsp;</TD>
    <TD width="12%" align=center vAlign=bottom
      >&nbsp;<STRONG>Cu<BR></STRONG> <B>(%)</B> </TD>
    <TD width="12%" align=center vAlign=bottom><B>Au</B> <BR><B>(M oz)</B> </TD>
    <TD width="12%" align=center vAlign=bottom><B>Cu<BR></B><B>(B lb)</B> </TD>
    <TD width="12%" align=center vAlign=bottom><B>Au</B> <br>
      <B>(M oz)</B> </TD>
    <TD width="12%" align=center vAlign=bottom><B>Cu</B><br>      <B>(B lb)</B> </TD></TR>
  <TR vAlign=top>
    <TD align=center>Proven </TD>
    <TD align=center>481 </TD>
    <TD align=center>0.46 </TD>
    <TD align=center>0.26 </TD>
    <TD align=center>&nbsp; &nbsp;5.0 </TD>
    <TD align=center>&nbsp;2.4 </TD>
    <TD align=center>7.1 </TD>
    <TD align=center>2.8 </TD></TR>
  <TR vAlign=top>
    <TD align=center>Probable </TD>
    <TD align=center>350 </TD>
    <TD align=center>0.35 </TD>
    <TD align=center>0.18 </TD>
    <TD align=center>&nbsp; &nbsp;2.7 </TD>
    <TD align=center>&nbsp;1.2 </TD>
    <TD align=center>3.9 </TD>
    <TD align=center>1.4 </TD></TR>
  <TR vAlign=top>
    <TD align=center><B>Total</B> </TD>
    <TD align=center><B>831</B> </TD>
    <TD align=center><B>0.41</B> </TD>
    <TD align=center><B>0.23</B> </TD>
    <TD align=center>&nbsp; &nbsp;<B>7.7</B> </TD>
    <TD align=center>&nbsp;<B>3.6</B> </TD>
    <TD align=center><B>11.0</B> </TD>
    <TD align=center><B>4.2</B> </TD></TR></TABLE>

<P align=justify>Note: Recoveries for Cu and Au are 87% and 69%,
respectively.</P>
<P align=justify>There are additional estimated measured and indicated resources
totaling 180 million tonnes grading 0.37 g/t gold and 0.32% copper, containing
2.1 million ounces of gold and 1.3 billion pounds of copper (assuming 100%
recoveries). The mineral resource and reserve estimations were completed by
Taseko staff under the supervision of Scott Jones, P.Eng., Vice-President,
Engineering and a Qualified Person under National Instrument 43-101. A technical
report has been filed on www.sedar.com.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=3 width="100%" border=0>

  <TR vAlign=bottom>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000 align=center>Cautionary regarding differences in US
      and Canadian Criteria for Reserves </TD></TR>
  <TR>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    borderColor=#000000>&nbsp; </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    borderColor=#000000 align=left>
      <P align=justify>The mineralized material at the Prosperity project is
      currently classified as measured and indicated resources, and a portion of
      it qualifies under Canadian mining disclosure standards as proven and
      probable reserves. Readers are cautioned that no part of the Prosperity
      project&#146;s mineralization is yet considered to be a reserve under US mining
      standards as all necessary mining permits and project financing would be
      required in order to classify the project&#146;s mineralized material as an
      economically exploitable reserve. </P></TD></TR></TABLE>
<P align=justify>In early June, the British Columbia Provincial Government
granted Taseko a long-term, renewable, 25-year mining lease for the Prosperity
gold-copper project, providing the Company with mineral tenure security for the
project.</P>
<P align=justify><B><I>Permitting</I></B></P>
<P align=justify>On January 14, 2010, the Company received the environmental
assessment certificate for the Prosperity project from the British Columbia
Provincial Ministry of Environment. The Provincial Mines Act permit application
was submitted to the Ministry of Energy, Mines, and Petroleum Resources in June
2010 but was put in abeyance following the November Federal decision as
discussed below.</P>
<P align=justify>The Canadian Environmental Assessment process, in which public
hearings were conducted by a three-person panel (&#147;Federal Panel&#148;) operating
under defined Terms of Reference, concluded on May 3, 2010. The Federal Panel
submitted its findings to the Federal Minister of Environment on July 2,
2010.</P>
<P align=center>10</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>Taseko was advised on November 2, 2010, that the Government of
Canada would not proceed with permitting on the Prosperity project as proposed.
The Company has reviewed and revised its plan and has put forth a new design
proposal, which adds construction costs and life of mine operating expenditures
of approximately $300 million to the original design. The new plan addresses the
concerns identified during the Federal Review process and on February 21, 2011
the Company submitted the new Project Description for the Prosperity gold-copper
project to the Government of Canada.</P>
<P align=justify><B><I>Gold Stream Agreement</I></B></P>
<P align=justify>In May 2010, the Company entered into a gold stream transaction
with Franco-Nevada Corporation (&#147;Franco-Nevada&#148;), under which Franco-Nevada will
purchase gold equal to 22% of the life of mine gold produced at the project.
Staged cash deposits aggregating US$350 million will be paid during mine
construction, and two million Franco-Nevada warrants will be issued on the date
of the first advance of the cash payment. For each ounce of gold delivered to
Franco-Nevada, Taseko will receive a further cash payment of US$400/oz (subject
to an inflationary adjustment) or the prevailing market price, if lower. The
deposit will be credited with the difference between US$400/oz and the market
price of gold for each ounce delivered until the deposit is fully credited. </P>
<P align=justify>Each warrant is exercisable to purchase one Franco-Nevada
common share at a price of $75.00 until June 16, 2017 and will be listed under
the same terms as the warrants listed on TSX under the symbol FNV.WT.A.</P>
<P align=justify>The conditions to funding the gold stream include obtaining
full financing of the project, receipt of all material permits to construct and
operate Prosperity, and securing marketing arrangements for the majority of the
concentrate.</P>
<P align=justify><B>1.2.3 Harmony Project</B></P>
<P align=justify>Taseko holds 100% of the Harmony gold project, located on the
Queen Charlotte Island -Haida Gwaii on the northwest coast of British Columbia.
The Company has undertaken property maintenance and environmental monitoring
activities at Harmony since acquiring the project in 2001. Taseko is considering
initiating a pre-feasibility level study of Harmony during 2011 to further
evaluate the project. </P>
<P align=justify><B>1.2.4 Aley Project</B></P>
<P align=justify>Taseko holds 100% of the Aley niobium project in northern
British Columbia. The Company completed a significant exploration drilling
program during the year.</P>
<P align=justify>The 2010 exploration program comprised geological mapping and
diamond drilling of 23 drill holes, for a total of 4,460 metres. These holes
intersected excellent grade niobium mineralization across an area measuring over
900 metres east-west and 350 metres north-south, and drill intercepts range to
over 200 metres in length. The niobium mineralization begins close to surface,
is highly continuous and is open to expansion in at least three directions and
to depth. Examples of key intercepts include 0.52% Nb<SUB>2</SUB>O<SUB>3 </SUB>over </SUP>153.1 metres beginning at 45.1 metres depth in hole 030 and
0.82% Nb<SUB>2</SUB>O<SUB>3 </SUB>over 141.7 metres beginning 4.6
metres depth in hole 023. Please see the Company&#146;s press release dated January
10, 2011 and our website for futher information on the 2010 core drilling
program.</P>
<P align=center>11</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_12></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>Plans are to accelerate work on the project in 2011, with a
comprehensive work program including improved road access, exploration and
geotechnical drilling, metallurgical testwork and environmental baseline
studies. Management believes that there is a strong market for niobium in steel
production and an excellent opportunity for development, if the deposit is
confirmed.</P>
<P align=justify><B>1.2.5 Market Trends </B></P>
<P align=justify>Copper prices had an overall upward trend between late 2003 and
mid-2008, followed by an unprecedented 70% drop in prices over the final six
months of 2008 as a result of uncertainty in global financial markets. The
average copper price in 2008 was US$3.15/lb. Prices stabilized in January 2009
and have been on an upward trend since. The average copper price in 2010 and
2009 was US$3.42/lb and $2.34/lb respectively. Price strength has continued into
2011 averaging US$4.38/lb up to the date of this report.</P>
<P align=justify>Gold prices were volatile in late 2008, dropping below
US$800/oz for a two-week period in September, and again from mid-October through
November. The average gold price for 2008 was US$871/oz and US$974/oz in 2009.
The average price in 2010 was US$1,226/oz., and the average price in 2011 to the
date of this report was US $1,380/oz.</P>
<P align=justify>Molybdenum prices increased from US$7.60/lb in 2003 to peak at
about US$34.00/lb in 2005. Prices averaged US$25.53/lb in 2006 and US$30.47/lb
in 2007. Molybdenum prices dropped significantly in late 2008, but averaged
US$28.98/lb during 2008 based on strength earlier in the year. Molybdenum prices
continued to drop in 2009 to about US$8.00/lb in early May, but improved after
that and averaged US$11.28/lb for the year. The average price of molybdenum was
US$15.90/lb for 2010, and US$17.19/lb for 2011 through to the date of this
report.</P>
<P align=justify>The Company sells its products in United States dollars but its
expenses are denominated primarily in Canadian dollars. The twelve-month average
to December 31, 2010 for one United States dollar was 1.03 Canadian dollars. At
December 31, 2010, one United States dollar was equivalent to 0.9946 Canadian
dollars. Current forecasts anticipate continued strengthening in the Canadian
dollar.</P>
<P align=center>12</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><FONT color=#0000ff>1.3 Selected Annual
Information</FONT></B></P>
<P align=justify>The consolidated financial statements have been prepared in
accordance with Canadian generally accepted accounting principles, and are
expressed in thousands of Canadian dollars except per share amounts.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="48%"
    colSpan=7 align=center valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>As at December 31</B> </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>Balance
      Sheets</B> </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="14%" align=right valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2010</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="14%" align=right valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2009</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="14%" align=right valign="bottom" nowrap style="BORDER-BOTTOM: #000000 1px solid"><B>2008</B> </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Current assets </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;281,300 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;92,316 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;41,283 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Mineral properties </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">27,737 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">32,631 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">32,610 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Plant and equipment </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>283,024 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>305,205 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>292,390 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Other assets </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">95,551 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">104,943 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">111,962 </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Total assets </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;687,612 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;535,095 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;478,245 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Current liabilities </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>66,636 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;75,179 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;112,053 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Other liabilities </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">151,025 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">163,223 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">131,285 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Shareholders&#146; equity </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">469,951 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">296,693 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">234,907 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Total liabilities
      &amp; shareholders&#146; equity </TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;687,612 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;535,095 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;478,245 </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD>&nbsp; </TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="14%">&nbsp; </TD>
    <TD width="2%">&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom">&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"><B>Year ended</B> </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"><B>Year ended</B> </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"><B>Fifteen months</B> </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" nowrap
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid"><B>December 31</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" nowrap
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid"><B>December 31</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" nowrap
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid"><B>ended December 31</B> </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid"><B>Statements of Operations</B> </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid"><B>2010</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid"><B>2009</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid"><B>2008</B> </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Revenue </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;278,460 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;188,902 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;231,678 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Cost of sales </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">142,674 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">132,434 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">196,261 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Depletion, depreciation and amortization </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">10,336 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">8,150 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">7,363 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">Operating profit </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">125,450 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">48,318 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">28,054 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Accretion of reclamation obligation </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">860 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">968 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">1,451 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Asset retirement obligation change of
      estimates </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(6,917</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Change in fair market value of financial
      instruments </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(319</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">886 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Exploration </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>10,090 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>3,407 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>11,864 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Foreign exchange loss (gain) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">2,650 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(8,800</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">4,032 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Gain on convertible bond repurchase </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(1,630</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">General and administration </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">13,853 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">8,382 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">11,896 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Interest accretion on convertible debt </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>1,260 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>2,938 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Interest and other income </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(18,275</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(7,402</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(9,701</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Interest expense </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>4,542 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>8,265 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>8,284 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Gain on sale of marketable securities </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(4,087</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(188</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(1,034</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Loss on prepayment of credit facility </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>834 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Premium paid on the redemption of royalty
      obligation </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">1,302 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Realized loss (gain) on derivative
      instruments </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(3,575</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>11,330 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&#150; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">Stock-based compensation </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">10,409 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">5,696 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">6,442 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Earnings (loss) before other items </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;107,166 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;27,030 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;(2,087</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Other items: </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp;Gain on contribution to the
      Joint Venture </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">95,114 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">&#150; </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">&#150; </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; &nbsp;Unrealized loss on derivative instruments </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(6,898</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(15,775</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&#150; </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Earnings before income taxes: </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">195,382 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">11,255 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="14%" align=right valign="bottom">&nbsp;(2,087</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Current income tax expense (recovery) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>4,106 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>669 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(2,151</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">Future income tax expense (recovery) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">42,678 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">25 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">(3,446</TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Earnings for the year </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;148,598 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;10,561 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;3,510 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Other comprehensive income (loss): </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp;Unrealized gain (loss) on
      reclamation deposits </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(118</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(1,040</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">1,859 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>&nbsp; &nbsp;Unrealized gain (loss) on
      marketable securities/investments </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>6,117 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>14,263 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(11,295</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; &nbsp;Reclassification of realized
      gain on sale of marketable securities </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(4,087</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(188</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(1,152</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; &nbsp;Tax effect </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(239</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(1,779</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1,570 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">Other comprehensive income (loss) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;1,673 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;11,256 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;(9,018</TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#ffffff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Total comprehensive income (loss) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;150,271 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;21,817 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;(5,508</TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Basic earnings per share </TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="14%" align=right valign="bottom">&nbsp;0.80 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="14%" align=right valign="bottom">&nbsp;0.06 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="14%" align=right valign="bottom">&nbsp;0.02 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Diluted earnings per share </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;0.73 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;0.06 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;0.02 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Basic weighted average number of common
      shares outstanding </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">186,103 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">173,170 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">142,062 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Diluted weighted average number of common
      shares outstanding </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>203,006 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>180,835 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>156,928 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR></TABLE>
<P align=center>13</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_14></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><FONT color=#0000ff>1.4 Summary of Quarterly
Results</FONT></B></P>
<P align=justify>The consolidated financial results reported for the periods
ending December 31, September 30 , June 30, and March 31, 2010 reflect the
Company&#146;s 75% interest in the new Joint Venture, which includes the results of
operations since April 1, 2010.</P>
<P align=justify><I>Expressed in thousands of Canadian dollars, except per-share
amounts. </I></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" nowrap>Dec 31 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" nowrap>Sept 30 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" nowrap>Jun 30 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" nowrap>Mar 31 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" nowrap>Dec 31 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" nowrap>Sept 30 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" nowrap>June 30 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" nowrap>Mar 31 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2010    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2010    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2010    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2010    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2009    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2009    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2009    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2009    </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Current assets </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>281,300 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>262,581 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>238,691 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>249,118 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>92,316 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>90,209 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>75,950 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>58,357 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Mineral properties </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">27,737 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">27,588 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">26.628 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">26,566 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">32,631 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">32,617 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">32,617 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">32,619 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Plant and equipment </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>283,024 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>263,544 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>235,535 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>233,672 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>305,205 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>303,434 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>301,891 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>295,094 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Other assets </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">95,551    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">96,190    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">99,851    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">96,641    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">104,943 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">107,686 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">107,707 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">112,321 </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>Total assets</B> </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>687,612</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>649,903</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>600,705</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>605,997</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>535,095</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>533,946</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>518,165</B> </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid"><B>498,391</B> </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp; </TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="6%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="6%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="6%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="6%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="6%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="6%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="6%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="6%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Current liabilities </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>66,636 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>80,998 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>53,621 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>78,468 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>75,179 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>58,949 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>61,503 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>91,195 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Other liabilities </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">151,025 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">128,626 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">112,362 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">139,077 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">163,223 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">183,856 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">165,341 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">166,596 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Shareholders' equity </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">469,951 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">440,279 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">434,722 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">388,452 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">296,693 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">291,141 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">291,321 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">240,600 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>Total
      liabilities and shareholders' equity</B> </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>687,612</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>649,903</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>600,705</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>605,997</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>535,095</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>533,946</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>518,165</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>498,391</B> </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Revenue </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">108,959 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">37,540 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">56,453 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">75,508 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">55,966 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">40,132 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">52,632 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">40,172 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Mine site operating costs </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>38,116 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>14,743 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>30,488 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>31,559 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>32,160 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>24,528 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>26,203 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>25,454 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Transportation and treatment </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">8,716 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">4,115 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">6,678 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">8,259 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">5,724 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">4,554 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">7,609 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">6,202 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Amortization </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">4,637 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1,217 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1,902 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">2,580 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">2,421 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1,677 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">2,142 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">1,910 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>Operating
      profit</B> </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>57,490</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>17,465</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>17,385</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>33,110</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>15,661</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>9,373</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>16,678</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>6,606</B> </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B><U>Expenses:</U></B> </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Accretion of reclamation obligation </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">205 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">202 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">197 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">256 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">250 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">245 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">239 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">234 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Change in fair value of financial
      instruments </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(319</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Exploration </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">3,971 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">3,619 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">1,519 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">981 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">1,519 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">805 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">549 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">534 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Foreign exchange loss (gain) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>4,042 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>1,972 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(2,774</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(590</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(681</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(3,108</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(7,941</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>2,930 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">General and administration </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">4,659 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">3,139 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">3,270 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">2,785 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">2,197 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">1,752 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">2,104 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">2,329 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Interest and other income </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(3,117</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(2,917</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(10,611</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(1,630</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(1,702</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(1,529</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(1,987</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(2,184</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Interest expense and accretion charges </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">1,058 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">652 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">731 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">2,101 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">1,935 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">2,041 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">2,765 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">2,784 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Gain on convertible bond repurchase </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(948</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(682</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Loss (gain) on sale of marketable securities </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">(2,973</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">(765</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">(349</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">(1,004</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">816 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Loss on prepayment of credit facility </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>834 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Premium paid on redemption of royalty obligation </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">1,302 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Realized loss (gain) on derivative
      instrument </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(15,117</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>3,881 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>7,661 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>7,762 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>3,568 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>- </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Stock-based
      compensation </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2,669    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">1,176    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">1,110    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">5,454    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">2,385    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">1,073    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">1,581    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">657</TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(1,949</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">4,870 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(3,442</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">18,805 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">12,661 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">4,715 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(3,372</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">7,284 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Earnings (loss)
      before other items </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">59,439    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">12,595    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">20,827    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">14,305    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">3,000    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">4,658    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">20,050    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(678</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">)</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Other Items: </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Gain (loss) on contribution to the joint venture </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">1,095 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">(3,363</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">97,382 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">- </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Unrealized gain (loss) on derivative instruments </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(18,284</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(5,015</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">8,910 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">7,491 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(4,237</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(8,829</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(2,709</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">- </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">Earnings (loss)
      before income taxes </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">42,250    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">4,217    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">29,737    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">119,178 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(1,237</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(4,171</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">17,341    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(678</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">)</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"
      bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">Income tax expense (recovery) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">16,919 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">2,839 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(15,703</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">42,729 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">766 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(1,822</TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">5,936 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">(4,186</TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>Earnings (loss)
      for the period</B> </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>25,331</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>1,378</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>45,440</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>76,449</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>(2,003</B></TD>
    <TD
      width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>)</B> </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>(2,349</B></TD>
    <TD
      width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>)</B> </TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>11,405</B> </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
      width="6%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid"><B>3,508</B> </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Earnings (loss) per share &#150; basic </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>0.14 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>0.01 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>0.24 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>0.42 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(0.01</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>(0.01</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>0.07 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="6%" align=right valign="bottom" bgColor=#e6efff>0.02 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Earnings (loss) per share &#150;diluted </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">0.12 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">0.01 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">0.24 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">0.40 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">(0.01</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">(0.01</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">0.06 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="6%" align=right valign="bottom">0.02 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR></TABLE>
<P align=center>14</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_15></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B>1.5 Results of Operations</B></P>
<P align=justify>The results of operations reported for the year ended December
31, 2010 reflect the Company&#146;s 75% interest in the new Joint Venture from the
inception date of March 31, 2010 and 100% for the period January 1, 2010 through
March 31, 2010. Sales and production volumes reflected below are on a 100% basis
unless otherwise indicated.</P>
<P align=justify>This management discussion and analysis compares the years
ended December 31, 2010 (&#147;2010&#148;) and the year ended December 31, 2009
(&#147;2009&#148;).</P>
<P align=justify>During 2010, Taseko generated operating profit of $125.5
million compared to $48.3 million during 2009 and earnings before tax and other
items of $107.2 million for 2010, compared to earnings before tax and other
items of $27.0 million for 2009. Other items included a gain on the sale of the
25% interest in the Gibraltar mine in the amount of $95.1 million and an
unrealized (non-cash) marked-to-market loss attributable to derivative
instruments of $6.9 million (2009 - $15.8 million).</P>
<P align=justify>During 2010, Taseko generated cash inflow from continuing
operating activities of $89.8 million as compared to an outflow of $26.8 million
for 2009. The increase in cash inflows from operating activities in 2010
resulted from the significant increase in sales over 2009, and the higher
average realized prices. </P>
<P align=justify>The Company&#146;s revenues are $278.5 million in 2010,
  compared to $188.9 million in 2009, consisting of copper concentrate sales of
  $258.9 million (2009 &#150; $172.5 million), molybdenum concentrate sales of $12.7
  million (2009 &#150; $8.8 million), silver concentrate sales of $2.9 million (2009 &#150;
  $2.0 million), and copper cathode sales of $4.0 million (2009 &#150; $5.6 million).
  The increase in revenue was the result of higher copper shipments in 2010 mainly
  due to increased production at Gibraltar, as well as a higher average realized
  copper price. For 2010, 86.3 million pounds of copper (concentrate and cathode)
  were sold compared to 68.1 million pounds of copper (concentrate and cathode)
  for 2009. The average price per pound of copper sold increased to US$3.66 per
  pound for 2010, up from US$2.31 per pound for 2009. Molybdenum sales increased
  to 0.9 million pounds for 2010 from 0.7 million pounds for 2009 mainly due to
  the higher molybdenum recovery levels seen over 2009. The average price per
  pound of molybdenum sold increased to US$16.32 per pound for 2010, up from
  US$11.02 per pound for 2009.</P>
<P align=justify>Cost of sales for 2010 was $142.7 million, compared to $132.4
million for 2009. Cost of sales for 2010 consists of total production cost of
$118.4 million (2009 &#150; $109.6 million), an inventory adjustment of $3.5 million
(2009 &#150; $1.3 million), and transportation and treatment costs of $27.8 million
(2009 &#150; $24.1 million). Cost of sales was higher during 2010 mostly due to
increased production levels, increases in the labour force, increases in input
costs and an increased strip ratio.</P>
<P align=justify>Amortization expense for 2010 was $10.3 million compared to
$8.2 million in 2009. The increase was the result of the capital equipment
additions as well as the utilization of several new pieces of equipment related
to the concentrator expansion and higher production volumes.</P>
<P align=justify>Exploration expenses increased to $10.1 million in 2010
compared to $3.4 million in 2009, due to an increased level of activity at the
Company's Prosperity project. Higher costs relating to the work carried out on
the environmental assessment review, some preliminary detailed engineering work,
and the permitting process (see Section 1.2.2) . An exploration drill program
was also carried out on the Aley project. Exploration expenses of $1.6 million
(2009 &#150; $0.05 million) at Gibraltar were capitalized.</P>
<P align=center>15</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>General and administrative (&#147;G&amp;A&#148;) costs increased to $13.9
million in 2010 from $8.4 million in 2009, mainly due to higher staffing levels
and support costs associated with the planned growth within the Company. Costs
were incurred relating to the expansion of the Williams Lake office, and an
increase in the staffing levels related to Prosperity and the Gibraltar mill
expansion during the comparative period.</P>
<P align=justify>Stock-based compensation was $10.4 million in 2010 compared to
$5.7 million in 2009. The increase is mainly due to the newly granted options in
2010, combined with the compensation expense of options granted in prior
years.</P>
<P align=justify>Interest and other income increased to $18.3 million as
compared to $7.4 million in 2009. The increase was primarily due to an interest
expense recovery of $8.1 million that occurred mid-way through the year, as a
result of the reversal of a provision for tax liabilities, as well as higher
levels of interest earned on deposits held with Canadian banks. Interest expense
decreased to $4.5 million in 2010 compared to $8.3 million in 2009 mainly due to
the redemption of the Company&#146;s convertible bonds during 2009 and repayment of
the credit facility at the end of the first quarter of 2010. The Company
recorded a foreign exchange loss of $2.6 million for 2010 compared to a gain of
$8.8 million in 2009. The loss was primarily due to the strengthening of the
Canadian dollar and the revaluation of the US-dollar receivables at December 31,
2010.</P>
<P align=justify>The Company recorded a realized gain of $3.6 million (2009 &#150;
loss $11.3 million) and an unrealized loss of $6.9 million (2009 &#150; $15.8
million) on derivative instruments as a result of the decrease in fair value of
the producer call and put option contracts which settled during 2010, and the
fair valuation of the contracts outstanding at December 31, 2010.</P>
<P align=justify>Current income tax expense of $4.1 million (2009 &#150; $0.7
million) and future income taxes expense of $42.7 million (2009 &#150; $0.03 million)
were recorded for the year ended December 31, 2010. </P>
<P align=justify><B><FONT color=#0000ff>1.6 Liquidity</FONT></B></P>
<P align=justify>At December 31, 2010, the Company had cash and equivalents of
$211.8 million, as compared to $35.1 million at December 31, 2009. In addition,
the Company had working capital of $214.7 million, as compared to working
capital of $17.1 million at December 31, 2009. The increase in working capital
was primarily a result of the proceeds from the sale of the 25% interest in the
Gibraltar mine to Cariboo.</P>
<P align=justify>Management anticipates that sales from copper and molybdenum
concentrate and copper cathode, along with the various financing activities
disclosed in Section 1.7 Capital Resources, and cash management strategies will
be sufficient to fund current operations and satisfy obligations as they come
due. Management continuously monitors all commitments and planned expenditures
necessary to maintain operational and capital spending objectives. </P>
<P align=center>16</P>
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noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><I>Liquidity Risk</I></P>
<P align=justify>The Company ensures that there is sufficient capital in order
to meet short-term business requirements, after taking into account cash flows
from operations and the Company's holdings of cash and equivalents. The Company
believes that these sources will be sufficient to cover the likely short and
long-term cash requirements. The Company's cash and equivalents are held in
business bank accounts with a major Canadian financial institution and are
available on demand for the Company's programs.</P>
<P align=justify>The following are the principal maturities of contractual
obligations (in thousands of Canadian dollars):</P>

<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 8pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="80%" border=0 align=center>

  <TR vAlign=top>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000
      align=left>&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="9%"><B>Contractual</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="9%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="9%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="9%">&nbsp; </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=right
    width="9%"><B>Over 3-5</B> </TD>
    <TD style="BORDER-TOP: #000000 2px solid" borderColor=#000000 align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left><B>As at December
      31, 2010</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="9%"><B>Obligations</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="9%"><B>2011</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="9%"><B>2012</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="9%"><B>2013</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="9%"><B>years</B> </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Accounts payable and accrued liabilities</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="9%" bgColor=#e6efff>&nbsp;22,983 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="9%" bgColor=#e6efff>&nbsp;22,983 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="9%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="9%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>$</TD>
    <TD align=right width="9%" bgColor=#e6efff>&nbsp;&#150; </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left>Amounts due to a related party </TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">154 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">154 </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD>
    <TD align=left width="1%">&nbsp;</TD>
    <TD align=right width="9%">&#150; </TD>
    <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left bgColor=#e6efff>Capital lease obligations </TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>20,313 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>5,354 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>5,394 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>4,511 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=left width="1%" bgColor=#e6efff>&nbsp;</TD>
    <TD align=right width="9%" bgColor=#e6efff>5,054 </TD>
    <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>Long-term
      equipment loan </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">18,020    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">4,961    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">6,828    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">3,672    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="1%">&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right width="9%">2,559    </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left
      bgColor=#e6efff>Total liabilities </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;61,470 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;33,452 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;12,222 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;8,183 </TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="1%"
    bgColor=#e6efff>$</TD>
    <TD style="BORDER-BOTTOM: #000000 2px solid" align=right width="9%"
    bgColor=#e6efff>&nbsp;7,613 </TD>
<TD style="BORDER-BOTTOM: #000000 2px solid" align=left width="2%"
    bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=justify>The Company also has purchase orders in the normal course of
operations for capital equipment. The orders have specific delivery dates and
financing of this equipment will be through existing cash resources.</P>
<P align=justify>Other than those obligations disclosed in the notes to the
consolidated financial statements for the year ended December 31, 2010, the
Company has no other material commitments for capital expenditures, long-term
debt, capital lease obligations, operating leases or any other long-term
obligations.</P>
<P align=justify><B><FONT color=#0000ff>1.7 Capital Resources</FONT></B></P>
<P align=justify>The Company&#146;s primary sources of liquidity and capital
resources are its cash flow provided from operations as well as equity and debt
financings.</P>
<P align=justify><I>Debt Financings</I></P>
<P align=justify>In February 2009, the Company entered into and drew down a
US$30 million 36-month term facility agreement (the &#147;Facility&#148;) with Credit
Suisse. During the prior year, the Company and Credit Suisse, as Facility Agent,
and Investec Bank plc amended the Facility to increase the existing Facility by
an additional US$20 million and the Company drew these additional funds. Under
the amended facility agreement, the US$50 million Facility was repayable
commencing April 2010 and every second month thereafter in equal installments of
US$4.2 million until February 2012. The Facility interest rate was LIBOR plus 5
percent and was due and payable bi-monthly. The long-term credit facility
security provided under the terms of the relevant agreement included certain
equipment of the Gibraltar mine, a general security pledge, and the treatment
and refining off-take agreement in addition to a corporate guarantee. </P>
<P align=center>17</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>In Q1 2010, the Company prepaid the Facility without penalty. A
loss of $0.8 million was recorded in net earnings as a result of the prepayment
of the Facility and the requirement to simultaneously expense deferred financing
costs.</P>
<P align=justify>During the year, the Company entered into a 5-year capital
lease agreement to finance the purchase of four haul trucks for the Gibraltar
mine for a total amount of $17.2 million (75% - $12.9 million). The terms of the
lease require monthly installments of approximately $0.3 million (75% - $0.2
million) beginning in October 2010 and ending in August, 2015, at an annual
interest rate of 5.99% . The Company guaranteed this financing.</P>
<P align=justify>Also during the year, the Company entered into a new 48-month
term equipment loan to finance the purchase of a new shovel for the Gibraltar
mine in the amount of $18.8 million (75% - $14.1 million). The loan is secured
by the underlying shovel at the Gibraltar mine. The loan is repayable in monthly
installments of approximately $0.4 million (75% - $0.3 million) beginning in
September 2010 through to August 2014. The loan bears a fixed interest rate of
5.349% and is guaranteed by the Company and Cariboo.</P>
<P align=justify><I>Equity Financings</I></P>
<P align=justify>During 2010, the Company obtained a receipt in respect of the
final short-form base shelf prospectus from regulatory authorities. The shelf
registration will, subject to securities regulatory requirements, allow the
Company to make offerings of common shares, warrants, subscription receipts,
debt securities, or any combination of such securities up to an aggregate
offering price of $300 million during the 25 month period that the final
short-form base shelf prospectus, including any amendments thereto, remains
effective. </P>
<P align=justify>The Company also entered into an At the Market Issuance
Agreement, with a third party, under which the Company may, at its discretion,
from time to time sell up to a maximum of 18.6 million of its common shares
through "at-the-market" ("ATM") issuance. The third party will act as sales
agent for any sales made under the ATM. The common shares will be sold at market
prices prevailing at the time of a sale. The Company is not required to sell any
of the reserved shares at any time during the term of the ATM, which extends
until November 1, 2012, and there are no fees for having established the
arrangement. The ATM Issuance Agreement does not prohibit the Company from
conducting other financings. Subsequent to year-end the Company issued 1.0
million common shares under the ATM agreement for gross proceeds of $6.0
million. </P>
<P align=justify><I>Other Financings</I></P>
<P align=justify>During 2009, the Company entered into an agreement with an
unrelated investment partnership, Gibraltar Royalty Limited Partnership ("GRLP")
whereby Gibraltar sold to GRLP a royalty for $6.5 million. </P>
<P align=justify>Annual royalties were
  payable by Gibraltar to GRLP at rates ranging from $0.003/lb to $0.004/lb of
  copper produced during the period from September 1, 2009 to December 31, 2030.
  These royalty payments were to be recognized as an expense during the
  period.</P>
<P align=justify>The Company classified the principal balance of the royalty
obligation as a financial liability to be settled in a future period. The
Company had a pre-emptive option to repurchase ("call") the royalty obligation
by acquiring the GRLP partnership units after March 1, 2010 to December 31, 2012
in consideration of a payment equal to the funds received by the Company plus a 20%
premium payable in the Company&#146;s shares or cash. GRLP also had a right to sell
("put") its GRLP partnership units to the Company at fair value after April 1,
2010 to December 31, 2012. However, this &#147;put&#148; right was subject to the
Company's pre-emptive right to exercise the "call" in advance of any "put" being
exercised and completed.</P>
<P align=center>18</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>In Q1 2010, the Company exercised its &#147;call&#148; option through the
issuance of 1,556,355 shares of the Company and recognized an expense of $1.3
million related to a premium on early redemption. </P>
<P align=justify><B><FONT color=#0000ff>1.8 Off-Balance Sheet
Arrangements</FONT></B></P>
<P align=justify>None.</P>
<P align=justify><B><FONT color=#0000ff>1.9 Transactions with Related
Parties</FONT></B></P>
<P align=justify>Hunter Dickinson Services Inc. ("HDSI") (formerly Hunter
Dickinson Inc.) is a private company which is owned equally by several public
companies, one of which was Taseko. During Q1 2010, the Company sold its
interest in HDSI for nominal value. HDSI has certain directors in common with
the Company and carries out geological, engineering, corporate development,
administrative, financial management, investor relations, and other management
activities for, and incurs third party costs on behalf of the Company. On July
2, 2010, the HDSI services agreement was modified and services are now provided
based on annually set hourly rates.</P>
<P align=justify>Costs for services rendered and costs incurred on behalf of the
Company by HDSI during the year ended December 31, 2010 were $3.0 million, as
compared to $2.7 million in 2009. </P>
<P align=justify>Under the terms of the Joint Venture Operating Agreement, the
Joint Venture pays a management fee to the Company for services rendered by the
Company to the Joint Venture as operator of the Gibraltar mine. Since the
inception of the Gibraltar Joint Venture, the Company has earned $2.6 million in
management fees of which 25% in the amount $0.6 million (2009 &#150; nil) was
recorded in the Company&#146;s accounts as other income.</P>
<P align=justify><B><FONT color=#0000ff>1.10 Fourth Quarter</FONT></B></P>
<P align=justify>For the three months ended December 31, 2010 (&#147;Q4 2010&#148;),
Taseko generated operating profit of $57.5 million compared to $15.6 million
during the three months ended December 31, 2009 (&#147;Q4 2009&#148;).</P>
<P align=justify>Other items in Q4 2010 include an adjustment of $1.1 million to
the gain realized on the sale of the 25% interest in the Gibraltar mine and an
unrealized (non-cash) mark-to-market loss attributable to derivative instruments
related to the copper hedging program in the amount of $18.3 million (Q4 2009 -
$4.2 million).</P>
<P align=justify>The Company recognized revenues of $109.0 million in Q4 2010,
compared to $56.0 million in Q4 2009.</P>
<P align=justify>Revenues in Q4 2010 consisted of copper concentrate sales of
$102.0 million compared to $52.9 million for Q4 2009. Molybdenum concentrate
sales were $3.2 million in the Q4 2010 compared to $0.7 million for Q4 2009. Silver concentrate sales were $1.3 million for Q4
2010 compared to $0.6 million for Q4 2009 and copper cathode sales were $2.5
million for Q4 2010 compared to $1.8 million for Q4 2009.</P>
<P align=center>19</P>
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  </TR>
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    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>Cost of production for Q4 2010 was $38.1 million, compared to
$32.2 million in Q4 2009. Cost of production consists of total production cost
for Q4 2010 of $29.1 million (Q4 2009 &#150; $31.9 million), plus concentrate
inventory adjustment of $8.9 million (Q4 2009 &#150; $0.3 million). Transportation
and treatment costs for Q4 2010 amounted to $8.7 million (Q4 2009 &#150; $5.7
million). </P>
<P align=justify>Amortization expense of $4.6 million for Q4 2010 was higher
compared to $2.5 million in Q4 2009 due to the utilization of new equipment.
Mining and milling assets are amortized using the units of production method
based on tons mined and milled during the period.</P>
<P align=justify>Exploration expenses for Q4 2010 increased to $4.0 million,
compared to $1.5 million in Q4 2009, mostly due to some preliminary detailed
engineering and permitting work relating to the Prosperity project, as well as
an exploration drill program carried out on the Aley project in the latter part
of 2010. </P>
<P align=justify>General and administrative (&#147;G&amp;A&#148;) expense for Q4 2010 was
$4.7 million, compared to $2.2 million in Q4 2009, the increase due to the
higher staffing levels and support costs resulting from planned growth within
the Company.</P>
<P align=justify>Stock-based compensation expense for Q4 2010 was $2.7 million,
compared to an expense of $2.4 million in Q4 2009, for options granted in 2010
as well as prior periods. </P>
<P align=justify>Interest and other income for Q4 2010 was $3.1 million,
compared to $1.7 million in Q4 2009. The increase is mainly due to higher
interest earned on the cash balances and income relating to the Joint Venture
management fees.</P>
<P align=justify>Interest expense and accretion for Q4 2010 was $1.1 million,
compared to $1.9 million in Q4 2009, the decrease mostly due to the repayment of
the Credit Suisse Term Facility in the first quarter of 2010.</P>
<P align=justify>The Company recorded a foreign exchange loss for Q4 2010 of
$4.0 million, compared to a gain of $0.7 million in Q4 2009. The Company sales
are denominated in US dollars and are therefore impacted by the strengthening of
the Canadian dollar and the revaluation of the US receivables at period close.
The loss for Q4 2010 was primarily due to the revaluation of the Company&#146;s US
bank balances of $3.5 million and the loss due to the revaluation of the US
dollar receivables of $0.5 million at December 31, 2010.</P>
<P align=justify>The Company recorded a realized gain of $15.1 million, compared
to a loss of $7.8 million in Q4 2009, and an unrealized loss of $18.3 million
(Q4 2009 &#150; $4.2 million) during Q4 2010 as a result of the decrease in the fair
value of the outstanding derivative contracts at December 31, 2010 and the
reclassification between realized and unrealized gains and losses for the
contracts that settled during the 2010 fiscal year.</P>
<P align=center>20</P>
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    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
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    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><FONT color=#0000ff>1.11 Proposed
Transactions</FONT></B></P>
<P align=justify><I>Franco-Nevada Gold Stream Transaction</I></P>
<P align=justify>During the year, the Company announced it had entered into an
arrangement (the &#147;Arrangement&#148;) with Franco-Nevada Corporation (&#147;Franco-Nevada&#148;)
to sell 22% of the gold to be produced from the Prosperity project. </P>
<P align=justify>The conditions to funding the gold stream include obtaining
full financing of the project, receipt of all material permits to construct and
operate Prosperity and securing marketing arrangements for the majority of the
concentrate. </P>
<P align=justify><I>Gibraltar Tracking Preferred Shares</I></P>
<P align=justify>In October 2001, the Company and its subsidiary Gibraltar Mines
Ltd. ("Gibraltar") completed the acquisition of the Harmony Gold Property
(&#147;Harmony&#148;) and related assets from Continental Minerals Corporation
(&#147;Continental&#148;), for 12,483,916 series "A" non-voting tracking preferred shares
of Gibraltar and $2.2 million cash. The tracking preferred shares were recorded
at $26.6 million, being their then fair value, and are designed to track and
capture the value of Harmony and will be redeemed for common shares of Taseko
upon a realization event, such as a sale of Harmony to a third party or
commercial production at the Harmony or, at the option of Gibraltar, if a
realization event has not occurred by 2011. Accordingly, the tracking preferred
shares have been classified within shareholders&#146; equity on the consolidated
balance sheet. The initial paid-up amount for the Gibraltar preferred shares is
$62.8 million, subject to reduction prior to redemption for certain stated
events. </P>
<P align=justify>On the occurrence of a realization event (as mentioned above),
Gibraltar must redeem the Gibraltar preferred shares by distributing that number
of Taseko common shares equal to the paid-up amount (as adjusted) divided by a
deemed price per Taseko common share, which will vary dependent on the timing of
such realization event. The tracking preferred shares are redeemable at
specified prices per common share of Taseko starting at $3.39 and escalating by
$0.25 per year, currently at $5.64 (as of December 31, 2010).</P>
<P align=justify>If a realization event does not occur on or before October 16,
2011, Gibraltar has the right to redeem the tracking preferred shares for Taseko
common shares at a deemed price equal to the greater of the then average 20 day
trading price of the common shares of Taseko and $10.00. The Taseko common
shares to be issued to Continental upon a realization event will in turn be
distributed pro-rata, after adjustment for any taxes, to the holders of
redeemable preferred shares of Continental that were issued to Continental
shareholders at the time of the Arrangement Agreement.</P>
<P align=justify>If an unrelated third party&#146;s acquisition of Continental (the
&#147;Acquisition&#148;) announced September 17, 2010 proceeds, it is planned, subject to
ongoing negotiations with Continental, that the redemption of the tracking
preferred shares for Taseko common shares be accelerated to occur just before
closing of the Acquisition.</P>
<P align=justify>On December 20, 2010, Continental announced that it had signed
a formal &#147;Arrangement Agreement&#148; to implement the proposed acquisition plan
announced in September, through a process which will be subject to the terms and
conditions of the Arrangement Agreement. Completion of the Arrangement Agreement is targeted for the end of the first quarter of 2011.
The tracking preferred shares will be exchanged for the Company&#146;s common shares
on the ratio of 0.5028 per Company&#146;s common share to a Continental preferred
share, and the Company&#146;s common shares will not be subject to any hold periods
by Continental.</P>
<P align=center>21</P>
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    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
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    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><FONT color=#0000ff>1.12 Critical Accounting
Estimates</FONT></B></P>
<P align=justify>The Company's significant accounting policies are presented in
notes 2 and 3 of the audited consolidated statements for the year ended December
31, 2010. The preparation of consolidated financial statements in accordance
with generally accepted accounting principles requires management to select
accounting policies and make estimates. Such estimates may have a significant
impact on the consolidated financial statements. These estimates include:</P>
<P align=justify><I>(a) Revenue Recognition</I></P>
<P align=justify>Revenue from the sales of metal in concentrate is recognized
when persuasive evidence of a sales agreement exists, the title and risk is
transferred to the customer, collection is reasonably assured, and the price is
reasonably determinable. Revenue from the sales of metal may be subject to
adjustment upon final settlement of shipment weights, assays and estimated metal
prices. Adjustments to revenue for metal prices are recorded monthly and other
adjustments are recorded on final settlement. Cash received in advance of
meeting these revenue recognition criteria is recorded as deferred revenue. </P>
<P align=justify>Under the Company&#146;s concentrate sales contracts, final copper
and molybdenum prices are set based on a specified future quotational period and
the average market metal price in that period. Typically, the quotational
periods for copper are either one or four months after the date of arrival at
the port of discharge and for molybdenum is three months after the month of
shipment. Revenues are recorded under these contracts at the time title passes
to the buyer and are based on the forward price for the expected settlement
period. The contracts, in general, provide for a provisional payment based upon
provisional assays and quoted metal prices. The price adjustment features in the
Company&#146;s receivables are treated as embedded derivatives for accounting
purposes and as such, are marked-to-market through earnings from the date of
sale through the date of final pricing. </P>
<P align=justify>In a period of unusual price volatility, as experienced in
fiscal 2008, the effect of mark-to-market price adjustments related to the
quantity of copper or molybdenum which remains to be settled could be
significant. For changes in quantities upon receipt of new information and
assay, the provisional sales quantities are adjusted as well.</P>
<P align=justify><I>(b) Asset Retirement Obligations (&#147;ARO&#148;)</I></P>
<P align=justify>The Company recognizes any statutory, contractual or other
legal obligation related to the retirement of tangible long-lived assets when
such obligations are incurred, if a reasonable estimate of fair value can be
made. These obligations are measured initially at fair value and the resulting
costs are capitalized to the carrying value of the related asset. In subsequent
periods, the liability is adjusted for the accretion of the discount and any
changes in the amount or timing of the underlying future cash flows. The asset
retirement cost is amortized to operations over the life of the asset. Changes
resulting from revisions to the timing or the amount of the original estimate of
undiscounted cash flows are recognized as an increase or a decrease in the
carrying amount of the liability and the related asset retirement cost. In the
event the required decrease in the asset retirement cost is in excess of the
carrying value, the excess amount is recorded as a change in estimate in net
earnings (loss).</P>
<P align=center>22</P>
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    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
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    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>The ARO are based on management&#146;s estimates, taking into
account various factors such as the reclamation method, legal requirements, and
current technology. The estimated amount of the reclamation cost is adjusted for
estimated inflation at 2.5% per year, and in 2032 dollars is expected to be
spent over a period of approximately three years beginning in 2032. After
discounting the estimated reclamation costs to be spent in 2032, a net present
value of the ARO was estimated at $8.2 million as at December 31, 2010 using
credit-adjusted risk free rates of 7.1% to 10%. These individual assumptions can
be subject to change and <FONT color=#152a31>can materially affect the
recognized amount of the liability.</FONT></P>
<P align=justify><I>(c) Mineral Resources and Reserves</I></P>
<P align=justify>The mineral reserves and resources in the Company&#146;s mineral
properties are determined in accordance with <I>National Instrument 43-101,
&#147;Standards of Disclosure for Mineral Projects&#148;</I>, issued by the Canadian
Securities Administrators (&#147;CSA&#148;). Management uses numerous assumptions in
estimating mineral reserves and mineral resources. The accuracy of any reserve
or resource estimate is a function of the quantity and quality of available data
and of the assumptions made and judgments used in engineering and geological
interpretation.</P>
<P align=justify>There are numerous uncertainties inherent in estimating mineral
reserves and mineral resources. Differences between management&#146;s assumptions and
market conditions could have a material effect in the future on the Company&#146;s
financial position and results of operations.</P>
<P align=justify><I>(d) Depletion, Depreciation, Amortization and Impairment
</I></P>
<P align=justify>The majority of the Company&#146;s plant and equipment are amortized
using the units of production method based on tons mined or milled.</P>
<P align=justify>Mineral property interests, plant and equipment are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. Recoverability of assets to
be held and used is measured by a comparison of the carrying amount of an asset
to estimated undiscounted future cash flows expected to be generated by the
asset. </P>
<P align=justify>If the Company determines that there has been an impairment
because its prior estimates of future cash flows have proven to be inaccurate
due to reductions in the price of copper and molybdenum, increases in the costs
of production, and/or reductions in the amount of reserves expected to be
recovered, the Company would be required to write down the recorded value of its
mineral property interests, plant and equipment, which would reduce the
Company&#146;s earnings and net assets.</P>
<P align=justify>No impairment was identified for the Gibraltar mine or the
Company&#146;s other exploration projects for the year ended December 31, 2010.</P>
<P align=center>23</P>
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    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
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    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
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<P align=justify><I>(e) Income Taxes</I></P>
<P align=justify>The Company uses the asset and liability method of accounting
for income taxes. Under this method, future income tax assets and liabilities
are computed based on differences between the carrying amounts of assets and
liabilities on the balance sheet and their corresponding tax values, generally
using the substantively enacted or enacted income tax rates expected to apply to
taxable income in the years in which those temporary differences are expected to
be recovered or settled. Future income tax assets also result from unused loss
carry forwards, resource-related pools, and other deductions. Future income tax
assets are recognized to the extent that they are considered more likely than
not to be realized. The valuation of future income tax assets is adjusted, if
necessary, by the use of a valuation allowance to reflect the estimated
realizable amount.</P>
<P align=justify><I>(f) Stock-based Compensation</I></P>
<P align=justify>The Company records all stock-based payments using the fair
value method. Under the fair value method, stock-based payments are measured at
the fair value of the consideration received or the fair value of the equity
instruments issued or liabilities incurred, whichever is more reliably
measurable, and are charged to operations over the vesting period. Management
uses several assumptions such as the Company&#146;s stock price volatility, the
risk-free interest rate and the expected life of the options in order to
estimate the fair value of the stock-based compensation. These assumptions can
be subject to change and <FONT color=#152a31>can materially affect the
recognized amount of stock-based compensation.</FONT></P>
<P align=justify><I>(g) Inventory</I></P>
<P align=justify>Finished goods and work-in-process are valued at the lower of
the average production costs or net realizable value. The assumptions used in
the valuation of work-in-process inventory include estimates of copper and
molybdenum contained in the stockpiles and an assumption of the copper price
expected to be realized when the stockpiles are processed into concentrate. If
these estimates or assumptions prove to be inaccurate, the Company could be
required to write down the recorded value of its work-in-process inventory,
which would reduce the Company&#146;s earnings and working capital.</P>
<P align=justify><I>(h) Copper Hedging Program</I></P>
<P align=justify>The Company&#146;s copper hedging contracts are recorded at fair
value. Changes in the fair values of the copper hedging contracts are recognized
in net earnings (loss) for the period. Several assumptions such as copper&#146;s
price volatility, the risk-free interest rate and copper forward curves are used
in order to estimate the fair value of the copper hedges. These assumptions can
be subject to change and <FONT color=#152a31>can materially affect the
recognized amount of both the realized and unrealized gains (losses) on
derivative financial instruments reflected in the Company&#146;s financial
statements.</FONT></P>
<P align=justify><B><FONT color=#0000ff>1.13 Change in Accounting Policies
including Initial Adoption</FONT></B></P>
<P align=justify><I>(a) New Accounting Standards adopted:</I></P>
<P align=justify>As a result of the Company&#146;s joint venture formation over the
Gibraltar mine entered into on March 31, 2010, the Company has adopted the
following standard on a prospective basis with no restatement to prior period
financial statements:</P>
<P align=center>24</P>
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    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
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    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
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<P align=justify><I>CICA 3055 &#150; &#147;Interests in Joint Ventures&#148;</I></P>
<P align=justify>The Company&#146;s interests in jointly controlled assets are
accounted for using proportionate consolidation. The Company combines its share
of the joint venture&#146;s individual income and expenses, assets and liabilities
and cash flows on a line-by-line basis with similar items in the Company&#146;s
financial statements. The Company recognizes the portion of gains or losses on
the sale of assets by the Company to the joint venture that is attributable to
the other venturers. The Company does not recognize its share of profits or
losses from the joint venture that result from the Company&#146;s purchase of assets
from the joint venture until it resells the assets to an independent party.
However, a loss on the transaction is recognized immediately if the loss
provides evidence of a reduction in the net realizable value of current assets
or an impairment loss.</P>
<P align=justify><I><FONT color=#211f1f>(b) New Accounting Standards Not Yet
Adopted:</FONT></I></P>
<P align=justify><I><FONT color=#211f1f>Business Combinations/Consolidated
Financial Statements/Non-Controlling Interests</FONT></I></P>
<P align=justify>The AcSB issued CICA Sections 1582, <I>Business
Combinations</I>, 1601, <I>Consolidated Financial Statements</I>, and 1602,
<I>Non-Controlling Interests</I>, which superseded current Sections 1581,
<I>Business Combinations</I>, and 1600, <I>Consolidated Financial
Statements</I>. These new Sections replace existing guidance on business
combinations and consolidated financial statements to harmonize Canadian
accounting for business combinations with IFRS. These Sections will be applied
prospectively to business combinations for which the acquisition date is on or
after the beginning of the first annual reporting period beginning on or after
January 1, 2011. Earlier adoption is permitted. If an entity applies these
Sections before January 1, 2011, it is required to disclose that fact and apply
each of the new sections concurrently. </P>
<P align=justify>The Company did not elect to early adopt this standard and will
adopt IFRS 3 <I>Business Combinations </I>in accordance with IFRS effective
January 1, 2011.</P>
<P align=justify><B><FONT color=#0000ff>1.14 International Financial Reporting
Standards (IFRS)</FONT></B></P>
<P align=justify>The Accounting Standards Board confirmed in February 2008 that
International Financial Reporting Standards (&#147;IFRS&#148;) will replace Canadian
generally accepted accounting principles (&#147;GAAP&#148;) for publicly accountable
enterprises for financial periods beginning on and after January 1, 2011, with a
transition date of January 1, 2010 (the &#147;Transition Date&#148;). </P>
<P align=justify>Accordingly, the Company will issue its first IFRS annual
consolidated financial statements for the year ended December 31, 2011, with
statements of comparative balance sheets as at December 31, 2010 and January 1,
2010 and restatement of earnings for the year ended December 31, 2010. During
the year ended December 31, 2011, the Company will issue interim consolidated
financial statements prepared in accordance with IAS 34 &#150; <I>Interim Financial
Reporting </I>(&#147;IAS 34&#148;) for the periods ended March 31, 2011, June 30, 2011 and
September 30, 2011, with restatement of comparative balance sheets as at
December 31, 2010 and January 1, 2010, and statements of earnings for the
comparative periods presented. </P>
<P align=justify>The Company adopted a formal project plan for its transition to
IFRS and allocated internal resources and engaged expert consultants, which was
monitored by a Steering Committee to manage the transition from GAAP to IFRS reporting. The Steering Committee provides regular
updates to the Audit Committee and the Board of Directors with the progress of
the convergence project through communication and meetings. The Company&#146;s
auditors have completed certain preliminary audit work on the IFRS opening
balance sheet adjustments to be used in determining the opening statement of
financial position under IFRS. </P>
<P align=center>25</P>
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    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
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    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>The IFRS convergence project instituted consists of three
primary phases, which in certain cases will occur concurrently as IFRS is
applied to specific areas:</P>
<UL style="TEXT-ALIGN: justify">
  <LI><p><U>Phase 1 - Initial Scoping and Impact Assessment Analysis: </U>to
  isolate key areas that will be impacted by the transition to IFRS. </p></LI>
  <LI><p><U>Phase 2 - Evaluation and Design: </U>to identify specific changes
  required to existing accounting policies, information systems and business
  processes, together with an analysis of policy alternatives allowed under IFRS
  and development of draft IFRS financial statements. </p></LI>
  <LI><p><U>Phase 3 - Implementation and Review</U>: to execute the changes to
  information systems and business processes, completing formal authorization
  processes to approve recommended accounting policy changes and training
  programs across the Company&#146;s finance and other staff, as necessary. This will
  culminate in the collection of financial information necessary to compile IFRS
  compliant financial statements, including embedding IFRS principles in
  business processes, and Audit Committee review and approval of the financial
  statements. </p></LI></UL>
<P align=justify>A detailed timetable was prepared to manage the transition and
the Company is currently on schedule. At the date of preparing this MD&amp;A,
the Company has met the objectives of the project plan. The Company&#146;s analysis
of IFRS and comparison with GAAP has identified a number of differences which
are discussed under the heading &#147;Impact of adoption of IFRS on Financial
Reporting&#148; below.</P>
<P align=justify><B><U>First-time Adoption of International Financial Reporting
Standards</U></B></P>
<P align=justify>IFRS 1, <I>First-time Adoption of International Financial
Reporting Standards </I>(&#147;IFRS 1&#148;), sets forth guidance for the initial adoption
of IFRS. Commencing for the period ended March 31, 2011 the Company will restate
its comparative fiscal 2010 financial statements for annual and interim periods
to be consistent with IFRS. In addition, the Company will reconcile equity and
net earnings from the previously reported fiscal 2010 GAAP amounts to the
restated 2010 IFRS amounts.</P>
<P align=justify>IFRS generally requires that first-time adopters
retrospectively apply all IFRS standards and interpretations in effect as at the
first annual reporting date. IFRS 1 provides for certain mandatory exceptions
and optional exemptions to this general principle. </P>
<P align=justify>The Company anticipates using the following IFRS 1 optional
exemptions:</P>
<UL style="TEXT-ALIGN: justify">
  <LI><FONT color=#1a171b>to apply the requirements of IFRS 3, </FONT><I><FONT
  color=#1a171b>Business Combinations, </FONT></I><FONT
  color=#1a171b>prospectively from </FONT>the <FONT color=#1a171b>Transition
  Date;</FONT>
  <LI><FONT color=#1a171b>to apply the requirements of IFRS 2, </FONT><I><FONT
  color=#1a171b>Share-based Payments</FONT></I><FONT color=#1a171b>, to equity
  instruments granted</FONT> <FONT color=#1a171b>which had vested as of the
  Transition Date;</FONT>
  <LI><FONT color=#1a171b>to apply the borrowing cost exemption and apply IAS
  23, </FONT><I><FONT color=#1a171b>Borrowing Costs, </FONT></I><FONT
  color=#1a171b>prospectively</FONT> <FONT color=#1a171b>from the Transition
  Date; and</FONT>
  <LI><FONT color=#1a171b>to elect not to comply with IFRIC 1, </FONT><I><FONT
  color=#1a171b>Changes in Existing Decommissioning, Restoration and</FONT></I>
  <I><FONT color=#1a171b>Similar Liabilities, </FONT></I><FONT color=#1a171b>for
  changes in such liabilities that occurred before the Transition Date.</FONT>
  </LI></UL>
<P align=center>26</P>
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style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>Changes to estimates previously made are not permitted. The
estimates previously made by the Company under GAAP will not be revised for
application of IFRS except where necessary to reflect any changes resulting from
differences in accounting policies.</P>
<P align=justify><B><U>Impact of Adoption of IFRS on Financial
Reporting</U></B><B> </B></P>
<P align=justify>While GAAP is in many respects similar to IFRS, conversion will
result in differences in recognition, measurement, and disclosure in the
financial statements. Based on a Company&#146;s scoping and analysis, the following
financial statement areas are expected to be significantly impacted: </P>
<P align=justify><B>Property, Plant and Equipment (PP&amp;E)</B></P>
<P align=justify>Under IAS 16, <I>Property, Plant and Equipment, </I>are
recognized initially at cost if it is probable that future economic benefits
associated with the item will flow to the entity and the cost of the item can be
measured reliably. Costs include all expenditures directly attributable to
bringing the asset to the location and condition necessary for it to be capable
of operating in the manner intended by management.</P>
<P align=justify>Under IAS 16, each part of an item of PP&amp;E with a cost that
is significant in relation to the total cost of the item shall be depreciated
separately. In order to meet this requirement, componentization is generally
required. The Company does not currently componentize to the same level as would
be required under IFRS. Componentization would be required only to the extent
that different depreciation methods or rates are appropriate and those
components are material. In addition, major inspections or overhaul costs are
identified and accounted for as a separate component under IFRS if that
component is used for more than one period. The Company does not currently have
a policy for major overhaul costs. Practically, this should be factored into the
determination of the components of PP&amp;E.</P>
<P align=justify>The Company&#146;s componentization analysis determined that the
level of componentization of assets under the Company&#146;s policies under GAAP also
meets the IFRS requirements and therefore there are no GAAP differences.</P>
<P align=justify><B>Income Taxes</B></P>
<P align=justify>IAS 12, <I>Income Taxes</I>, requires the recognition of
deferred tax assets or liabilities for all deductible and taxable temporary
differences except for temporary differences created in a transaction that
is:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">(a) </TD>
    <TD>
      <P align=justify>not a business combination and</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%">(b) </TD>
    <TD>
      <P align=justify>at the time of the transaction, affects neither
      accounting profit nor taxable profit.</P></TD></TR></TABLE>
<P align=justify>Under GAAP, the Company recognizes a deferred tax liability on
temporary differences arising on the initial recognition of the Aley mineral
property interest and Oakmont net profit interest (where the accounting basis of
the asset acquired exceeded its tax basis) in a transaction which was not a
business combination and affected neither accounting profit/(loss) nor taxable
profit/(loss). </P>
<P align=justify>As of the Transition Date, the Company will derecognize all
deferred tax liabilities which had been previously recognized on the initial
acquisition of the Aley mineral property interest and the Oakmont net profit
interest since these transactions are deemed not to be a business combination
and affected neither accounting profit/(loss) nor taxable profit/(loss) with a
corresponding reduction in the related asset. As a result, there will be a
reduction in the amount of $4.9 million in both mineral property interests and
future income tax liabilities as of the Transition Date. For the year ended
December 31, 2010, there will be a reduction in the amount of $4.4 million in
mineral property interests, a reduction of $4.9 million in future income tax
liabilities and an increase of $0.5 million in the gain recognized in the
contribution to the Joint Venture. Please refer to the unaudited proforma IFRS
reconciliation below.</P>
<P align=center>27</P>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>In addition, a deferred tax asset is recognized to the extent
it is probable that taxable profit will be available against which the
deductible temporary differences can be utilized. Under GAAP, tax assets are
recognized if it is more likely than not to be realized. Probable is not defined
in IAS 12. However, entities have often used a definition of more likely than
not similar to GAAP. However, IAS 12 does not preclude a higher threshold.
Accordingly, a difference will not result as long as the Company uses more
likely than not as its definition of probable. </P>
<P align=justify><B>Impairment of Assets</B></P>
<P align=justify>Per IAS 36, <I>Impairment of Assets</I>, an entity shall assess
at the end of each reporting period whether there is any indication that an
asset may be impaired. If any such indication exists, the entity should estimate
the recoverable amount of the asset. The indicators of impairment are generally
consistent with those of GAAP. An asset should be written down to its
recoverable amount if the recoverable amount is less than its carrying
value.</P>
<P align=justify>The recoverable amount is equal to the higher of the fair value
less cost to sell and its value in use. It is not necessary to determine both if
one indicates no impairment exists. The value in use is based on a discounted
cash flow model. This approach is different than GAAP (i.e. one step model under
IFRS compared to two step model under GAAP).</P>
<P align=justify>To the extent possible, individual assets should be tested for
impairment. However, if it is not possible to determine the recoverable amount
of an individual asset, an entity should determine the recoverable amount of the
Cash Generating Unit (&#147;CGU&#148;) to which the asset belongs. The definition of a CGU
is different from the Canadian definition of an Asset Group. However, no
difference between asset groups previously classified under GAAP and CGU&#146;s have
been identified.</P>
<P align=justify>The Company has in the past written down mineral property
balances for certain mineral properties. Under IAS 36, the Company would be
required to reconsider whether there is any indication that an impairment loss
recognized in a prior period may no longer exist or has decreased on transition
and thereafter on an annual basis. If such indicators exist, a new recoverable
amount should be calculated and all or part of the impairment charge should be
reversed to the extent the recoverable amount exceeds its carrying value. This
is different than GAAP where write ups are not permitted.</P>
<P align=justify>Based on the Company&#146;s analysis, indicators of impairment that
resulted in the impairment loss of $5.9 million recognized for Gibraltar in
fiscal 2001 no longer exist and therefore should be reversed. The reversal on
the Transition Date resulted into a $4.6 million increase in mineral property
interests and shareholders&#146; equity. For the year ended December 31, 2010, there
was a $3.3 million increase in mineral property interests and shareholder&#146;s
equity, an increase on $0.1 million in depreciation and amortization expenses and a decrease of $1.1 million in the gain recognized
in the contribution to the Joint Venture for IFRS purposes. Please refer to the
unaudited proforma IFRS reconciliation below.</P>
<P align=center>28</P>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>The Company concluded that the historical impairment recognized
for Prosperity and Harmony should not be reversed .</P>
<P align=justify><B>Asset Retirement Obligations (&#147;ARO&#148;)</B></P>
<P align=justify>Under IAS 37, <I>Provisions, Contingent Liabilities and
Contingent Assets</I>, an ARO is recognized when there is a legal or
constructive obligation to restore a site for damage that has already occurred,
it is probable a restoration expense will be incurred and the cost can be
estimated reliably. This is different than GAAP where only legal obligations are
considered. </P>
<P align=justify>Under IFRS, the amount recognized as a provision shall be the
best estimate of the expenditures required to settle the present obligation.
This is significantly different from GAAP where third-party costs are required.
Under IAS 37, the provision would be based on management&#146;s best estimate. This
estimate could be a third-party cost if it is management&#146;s intention to hire a
third-party to complete the work or an internal estimate of the cost if the
Company intends to use its own equipment and resources to do this work. The
Company&#146;s estimate is based on the Company&#146;s use of its own equipment and
resources, and these estimates are the basis for calculating its ARO under
IFRS.</P>
<P align=justify>Where the effect of the time value of money is material, the
amount of the provision should be the present value of the expenditures expected
to be required to settle the obligation. This is consistent with GAAP. The
discount rate used under IFRS would be a pre-tax rate specific to the liability
rather than the Company's use of the credit-adjusted risk-free rate required
under GAAP. The discount rate under IFRS should not reflect risks for which the
future cash flow estimates have been adjusted. Unwinding of the discount (i.e.
accretion) is included in finance costs under IFRS. </P>
<P align=justify>The ARO provision should be reviewed at the end of each
reporting period and adjusted to reflect the current best estimate. Changes may
result from changes in the amount or timing of the cash outflows or changes in
discount rates. This is different from GAAP where changes in discount rates
alone would not result in a change in the ARO. Accordingly, the Company will
need to assess the discount rate applicable to the ARO on an ongoing basis. As
the Company has elected to apply the IFRS 1 exemption related to asset
retirement obligations, the Company will not retroactively adjust the obligation
on transition for changes in discount rate that may have occurred from time to
time. As such, the Company has remeasured the rehabilitation liability as at
January 1, 2010 under IAS 37, estimated the amount to be included in the related
asset by discounting the liability to the date in which the liability arose
using best estimates of the historical risk adjusted discount rates, and
recalculated the accumulated depreciation and amortization under IFRS.</P>
<P align=justify>As a result of the above analysis, asset retirement obligations
will be increased by $9.9 million, asset retirement obligation assets will be
increased by $8.5 million and shareholders&#146; equity will be reduced by $1.4
million as of the Transition Date. For the year ended December 31, 2010, asset
retirement obligations will be increased by $6.1 million, asset retirement
obligation assets will be increased by $7.1 million, shareholders&#146; equity will
be reduced by $1.0 million, accretion expenses will be reduced by $0.3 million,
depreciation and amortization expenses will be increased by $0.15 million and
the gain on contribution to the Joint Venture will be increased by $0.2
million. Please refer to the unaudited proforma IFRS reconciliation below.</P>
<P align=center>29</P>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B>Share-based Payments</B></P>
<P align=justify>Currently, the Company measures stock-based compensation
related to stock-options at the fair value of the options granted using the
Black-Scholes option pricing formula and recognizes this expense over the
vesting period of the options. For the purpose of accounting for share-based
payment transactions, an individual is classified as an employee when the
individual is consistently represented to be an employee under law. The fair
value of the options granted to employees is measured on the date of grant. The
fair value of options granted to contractors and consultants are measured on the
date the services are completed. Forfeitures are recognized as they occur.</P>
<P align=justify>IFRS 2, similar to GAAP, requires the Company to measure
stock-based compensation related to stock-options granted to employees at the
fair value of the options on the date of grant and to recognize such expense
over the vesting period of the options. However, for options granted to
non-employees, IFRS requires that stock-based compensation be measured at the
fair value of the services received unless the fair value cannot be reliably
measured. For the purpose of accounting for share-based payment transactions an
individual is classified as an employee when the individual is an employee for
legal or tax purposes (direct employee) or provides services similar to those
performed by a direct employee. This definition of an employee is broader than
that currently applied by the Company and will result in certain contractors and
consultants being classified as employees under IFRS.</P>
<P align=justify>Based on the IFRS definition of an employee, the Company will
reclassify a number of individuals previously classified as non-employees to
employees. For the stock options granted to the individuals reclassified,
changes in fair value after the grant date previously recognized for GAAP
purposes will be adjusted. The effect of the above difference is yet to be
finalized.</P>
<P align=center>30</P>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B><I>December 31, 2010 Proforma IFRS Consolidated Balance
Sheet and Comprehensive Statement of Income/(Loss) and January 1, 2010 Opening
IFRS Balance Sheet: (Unaudited - Expressed in thousands of Canadian
Dollars):</I></B></P>
<P align=justify>The Company has prepared a condensed, unaudited preliminary
consolidated opening IFRS reconciliation as at January 1, 2010 with revised
comparatives for December 31, 2010 based on known adjustments to date. These
adjustments do not necessarily reflect all the adjustments required under IFRS.
The preliminary amounts presented below are based on accounting policies the
Company expects to apply in preparing its first consolidated IFRS financial
statements. The amounts determined for the Company&#146;s final consolidated opening
IFRS balance sheet as at January 1, 2010 and the December 31, 2010 comparative
consolidated balance sheet may differ from these preliminary amounts reported as
a result of changes to IFRS from the date of this document to the dates the
final consolidated opening IFRS balance sheet as at January 1, 2010 and December
31, 2010 comparative consolidated IFRS statements are issued.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom"><B>Dec-31, 2010</B> </TD>
    <TD width="2%" align=center valign="bottom">&nbsp;</TD>
    <TD width="1%" align=center valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom"><B>Jan-1, 2010</B> </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom"><I>Revised</I> </TD>
    <TD width="2%" align=center valign="bottom">&nbsp;</TD>
    <TD width="1%" align=center valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom"><I>Opening</I> </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom" nowrap><I>Comparatives</I> </TD>
    <TD width="2%" align=center valign="bottom">&nbsp;</TD>
    <TD width="1%" align=center valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom" nowrap><I>Balance Sheet</I> </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom">&nbsp; </TD>
    <TD width="2%" align=center valign="bottom">&nbsp;</TD>
    <TD width="1%" align=center valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom" nowrap><I>at Transition</I> </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">&nbsp; </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom">&nbsp; </TD>
    <TD width="2%" align=center valign="bottom">&nbsp;</TD>
    <TD width="1%" align=center valign="bottom">&nbsp;</TD>
    <TD width="14%" align=center valign="bottom"><I>Date</I> </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp; </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Total Assets per Canadian GAAP</B> </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;687,612 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;535,095 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Deferred tax adjustments </TD>
    <TD width="30%" align=left valign="bottom">- Mineral property interest </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(4,374</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(4,862</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Reversal of previous impairments </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>- Mineral property interest </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>3,339 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(4,574</TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Asset retirement obligation adjustments </TD>
    <TD width="30%" align=left valign="bottom">- Plant, property and equipment </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">6,126    </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">8,508    </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Total Assets per IFRS</B> </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;692,703 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;543,315 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom">&nbsp; </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
    <TD width="2%" valign="bottom">&nbsp;</TD>
    <TD width="1%" valign="bottom">&nbsp;</TD>
    <TD width="14%" valign="bottom">&nbsp; </TD>
  <TD width="2%" valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Total Liabilities per Canadian GAAP</B>    </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;217,661 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>$</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp;238,402 </TD>
  <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Deferred tax adjustments </TD>
    <TD width="30%" align=left valign="bottom">- Mineral property interest </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(4,862</TD>
    <TD width="2%" align=left valign="bottom">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">(4,862</TD>
  <TD width="2%" align=left valign="bottom">) </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Asset retirement obligation adjustments </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>- Site closure and reclamation
      obligation </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">7,138 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">9,899 </TD>
  <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"><B>Total Liabilities per IFRS</B> </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;219,937 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;243,439 </TD>
  <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
  </TR>
  <TR>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="5%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD colSpan=2 align=left valign="bottom"><B>Total Shareholders' Equity per Canadian
      GAAP</B> </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="14%" align=right valign="bottom">&nbsp;469,951 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="14%" align=right valign="bottom">&nbsp;296,693 </TD>
  <TD width="2%" align=left valign="bottom">&nbsp;</TD>
  </TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Deferred tax adjustments </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>- Retained deficit </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>489 </TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>- </TD>
  <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Reversal of previous impairments </TD>
    <TD width="30%" align=left valign="bottom">- Retained deficit </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">3,339 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">4,574 </TD>
  <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Asset retirement obligation adjustments </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>- Retained deficit </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(1,013</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(1,391</TD>
  <TD align=left width="2%" bgColor=#e6efff>) </TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"><B>Total Shareholders' Equity per IFRS</B> </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;472,766 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;299,876 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="5%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom"><B>Total Liabilities and Shareholders' Equity</B> </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;692,703 </TD>
    <TD
    width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">$</TD>
    <TD
      width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;543,315 </TD>
  <TD style="BORDER-BOTTOM: #000000 1px solid" align=left
    width="2%">&nbsp;</TD></TR>
  <TR>
    <TD valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="5%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="2%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD width="2%" bgColor=#e6efff>&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD colSpan=2 align=left valign="bottom"><B>Total Comprehensive Income per Canadian
      GAAP</B> </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">$</TD>
    <TD width="14%" align=right valign="bottom">&nbsp;150,271 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=left valign="bottom">&nbsp; </TD>
  <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Reversal of previous impairments </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>- Depletion, depreciation and
      amortization </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff></TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff></TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(99</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff></TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff></TD>
  <TD align=left width="2%" bgColor=#e6efff></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Asset retirement obligation adjustments </TD>
    <TD width="30%" align=left valign="bottom">- Finance costs </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=right valign="bottom">331 </TD>
    <TD width="2%" align=left valign="bottom">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=left valign="bottom">&nbsp; </TD>
  <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff>Asset retirement obligation adjustments </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>- Depletion, depreciation and
      amortization </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff></TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff></TD>
    <TD width="14%" align=right valign="bottom" bgColor=#e6efff>(185</TD>
    <TD width="2%" align=left valign="bottom" bgColor=#e6efff>) </TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff></TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff></TD>
  <TD align=left width="2%" bgColor=#e6efff></TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom">Gain on contribution to the joint venture </TD>
    <TD width="30%" align=left valign="bottom">&nbsp; </TD>
    <TD width="5%" align=left valign="bottom">&nbsp;</TD>
    <TD
    width="1%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">&nbsp;</TD>
    <TD
    width="14%" align=right valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">(415</TD>
    <TD width="2%" align=left valign="bottom" style="BORDER-BOTTOM: #000000 1px solid">) </TD>
    <TD width="1%" align=left valign="bottom">&nbsp;</TD>
    <TD width="14%" align=left valign="bottom">&nbsp; </TD>
  <TD align=left width="2%">&nbsp;</TD></TR>
  <TR vAlign=top>
    <TD align=left valign="bottom" bgColor=#e6efff><B>Total Comprehensive Income per IFRS</B>    </TD>
    <TD width="30%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
    <TD width="5%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="1%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">$</TD>
    <TD width="14%" align=right valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;149,903 </TD>
    <TD width="2%" align=left valign="bottom"
    bgColor=#e6efff style="BORDER-BOTTOM: #000000 3px double">&nbsp;</TD>
    <TD width="1%" align=left valign="bottom" bgColor=#e6efff>&nbsp;</TD>
    <TD width="14%" align=left valign="bottom" bgColor=#e6efff>&nbsp; </TD>
  <TD align=left width="2%" bgColor=#e6efff>&nbsp;</TD></TR></TABLE>
<P align=center>31</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B>IFRS Impact on Our Organization</B></P>
<P align=justify>The conversion to IFRS will impact the way the Company presents
its financial results. The first financial statements prepared using IFRS (i.e.
interim financial statements for the three months ended March 31, 2011) will be
required to include numerous notes disclosing extensive transitional information
and full disclosure of all new IFRS accounting policies.</P>
<P align=justify>The Company has obtained an understanding of IFRS from
intensive training of its finance personnel. Further, our finance personnel
include employees who have prepared financial statements under IFRS
previously.</P>
<P align=justify>Based on the analysis and differences identified to date, the
Company believes its systems can accommodate the required changes. In addition,
the Company&#146;s internal and disclosure control processes, as currently designed,
will not need significant modifications as a result of its conversion to
IFRS.</P>
<P align=justify>We have assessed the impacts of adopting IFRS on our
contractual arrangements, and have not identified any material compliance
issues.</P>
<P align=justify>We have considered the impacts that the transition will have on
our internal planning process and compensation arrangements and have not
identified any significant impacts to date.</P>
<P align=justify><B><FONT color=#0000ff>1.15 Financial Instruments and Other
Instruments</FONT></B></P>
<P align=justify>All financial instruments, including derivatives, are included
on the Company&#146;s balance sheet and are measured either at fair value or
amortized cost. Changes in fair value are recognized in the statements of
operations or accumulated other comprehensive income, depending on the
classification of the related instruments.</P>
<P align=justify>All financial assets and liabilities are recognized when the
entity becomes a party to the contract creating the asset or liability. All
financial instruments are classified into one of the following categories:
held-for-trading, held-to-maturity, loans and receivables, available-for-sale
financial assets, or other financial liabilities. Please refer to note 2(d) of
the accompanying audited consolidated financial statements for the list of the
Company&#146;s financial instruments and their classifications.</P>
<P align=justify>The Company is exposed in varying degrees to financial
instrument related risks. The Company&#146;s Board of Directors approves and monitors
the risk management processes, including treasury policies, counterparty limits,
controlling and reporting structures. The Company is exposed to the following
risks from its financial instruments:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD width="5%"  >&nbsp;</TD>
    <TD vAlign=top width="5%">a. ) </TD>
    <TD>
      <P align=justify><I>Credit Risk </I>&#150; Credit risk is the risk of potential
      loss to the Company if a customer or counterparty to a financial
      instrument fails to meet its contractual obligations. The Company is
      exposed to credit risk from its receivables and marketable securities. In
      general, the Company manages its credit exposure by transacting only with
      reputable counterparties. The Company monitors the financial condition of
      its customers and counterparties to contracts.</P></TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>b.</I> <EM>) </EM></TD>
    <TD>
      <P align=justify><I>Liquidity Risk </I>&#150; The Company ensures that there is
      sufficient capital in order to meet short- term business requirements,
      after taking into account cash flows from operations and
  the Company&#146;s holdings of cash and cash equivalents. The
      Company believes that these sources will be sufficient to cover the
  foreseeable short and long term cash requirements.</P></TD></TR></TABLE>
<P align=center>32</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<BR>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>
  <TR>
    <TD width="5%" >&nbsp;</TD>
    <TD vAlign=top width="5%"><I>c.</I> <EM>) </EM></TD>
    <TD>
      <P align=justify><I>Market Risk </I>&#150; The significant market risk
      exposures to which the Company is exposed are foreign exchange risk,
      interest rate risk and commodity price risk. These are discussed further
      below:</P></TD></TR></TABLE>
<P style="MARGIN-LEFT: 5%" align=justify><I>i) Foreign exchange risk</I></P>
<P style="MARGIN-LEFT: 5%" align=justify>The Company&#146;s revenues and treatment
and transportation charges are substantially denominated in US dollars, whereas
all other expenses are substantially denominated in Canadian dollars. The
Company has not entered into any agreements or purchased any instruments to
hedge possible currency risks at this time. The results of the Company&#146;s
operations are subject to currency transaction risk and currency translation
risk. The operating results and financial position of the Company are reported
in Canadian dollars in the Company&#146;s consolidated financial statements. The
fluctuation of the US dollar in relation to the Canadian dollar will
consequently have an impact upon the profitability of the Company and may also
affect the value of the Company&#146;s assets and the amount of shareholders&#146;
equity.</P>
<P style="MARGIN-LEFT: 5%" align=justify><I>ii) Interest rate risk</I></P>
<P style="MARGIN-LEFT: 5%" align=justify>Fluctuations in interest rates impact
the return on the cash equivalents and reclamation deposits invested at floating
rates of interest.</P>
<P style="MARGIN-LEFT: 5%" align=justify>Equipment loans carry fixed interest
rates ranging between 5.349% and 8.6% per annum, and as such are not subject to
fluctuations in interest rates. The royalty obligation is offset by a promissory
note held by the Company. </P>
<P style="MARGIN-LEFT: 5%" align=justify>iii) <I>Commodity price risk</I></P>
<P style="MARGIN-LEFT: 5%" align=justify>The value of the Company&#146;s mineral
resource properties is related to the price of gold, copper, molybdenum and
niobium and the outlook for these minerals. Gold, copper, molybdenum and niobium
prices historically have fluctuated widely and are affected by numerous factors
outside of the Company's control, including, but not limited to, industrial and
retail demand, central bank lending, forward sales by producers and speculators,
levels of worldwide production, short-term changes in supply and demand because
of speculative hedging activities, and certain other factors related
specifically to gold.</P>
<P style="MARGIN-LEFT: 5%" align=justify>The profitability of the Company's
operations is highly correlated to the market price of copper, molybdenum,
niobium and gold. If metal prices decline for a prolonged period below the cost
of production of the Gibraltar mine, it may not be economically feasible to
continue production.</P>
<P style="MARGIN-LEFT: 5%" align=justify>During 2009, the Company introduced a
copper hedging program. The program is a part of the Company&#146;s risk management
strategy and was conceived due to the copper price variability experienced in
fiscal 2008 and the perceived need to mitigate the potential risks to revenue
and operating margins.</P>
<P align=center>33</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P style="MARGIN-LEFT: 5%" align=justify>One strategy used to manage copper
price risk is called a &#147;zero cost cap and collar&#148; whereby the Company buys a
copper &#147;put&#148; option and simultaneously sells an offsetting &#147;call&#148; option.
Another strategy is the purchase of put options that sets a minimum price that
the Company will realize for a portion of its copper production. The put options
are only exercised if the spot price declines below the put strike price. The
Company will continue to review its hedge position from time to time in light of
prevailing market and economic conditions.</P>
<P align=justify><B><FONT color=#0000ff>1.16 Other MD&amp;A
Requirements</FONT></B></P>
<P align=justify>Additional information relating to the Company, including the
Company's Annual Information Form, is available on SEDAR at <U><FONT
color=#0000ff>www.sedar.com</FONT></U>.</P>
<P align=justify><B>1.16.1 Additional Disclosure for Venture Issuers without
Significant Revenue</B></P>
<P align=justify>Not applicable. The Company is not a Venture Issuer.</P>
<P align=center>34</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_35></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B>1.16.2 Disclosure of Outstanding Share Data</B></P>
<P align=justify>The following details the share capital structure as at March
16, 2011, the date of this MD&amp;A. These figures may be subject to minor
accounting adjustments prior to presentation in future consolidated financial
statements.</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0>

  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=left>&nbsp; </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="20%">Expiry date </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="20%">Exercise price </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="20%">Number </TD>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=right
      width="20%">Number </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>Common shares </TD>
    <TD align=right width="20%">&nbsp; </TD>
    <TD align=right width="20%">&nbsp; </TD>
    <TD align=right width="20%">&nbsp; </TD>
  <TD align=right width="20%">188,999,687 </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>Share purchase option </TD>
    <TD align=right width="20%">28-Mar-11 </TD>
    <TD align=right width="20%">$2.18 </TD>
    <TD align=right width="20%">110,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">28-Mar-11 </TD>
    <TD align=right width="20%">$2.63 </TD>
    <TD align=right width="20%">40,000 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">22-Aug-11 </TD>
    <TD align=right width="20%">$4.09 </TD>
    <TD align=right width="20%">15,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">10-Dec-11 </TD>
    <TD align=right width="20%">$1.00 </TD>
    <TD align=right width="20%">858,800 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">24-Feb-12 </TD>
    <TD align=right width="20%">$3.07 </TD>
    <TD align=right width="20%">165,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">24-Feb-12 </TD>
    <TD align=right width="20%">$4.50 </TD>
    <TD align=right width="20%">135,000 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">30-Jul-12 </TD>
    <TD align=right width="20%">$2.17 </TD>
    <TD align=right width="20%">26,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">15-Jan-13 </TD>
    <TD align=right width="20%">$4.77 </TD>
    <TD align=right width="20%">960,000 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">10-Dec-13 </TD>
    <TD align=right width="20%">$1.00 </TD>
    <TD align=right width="20%">2,168,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">4-Jan-14 </TD>
    <TD align=right width="20%">$5.13 </TD>
    <TD align=right width="20%">310,000 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">12-Jan-14 </TD>
    <TD align=right width="20%">$1.15 </TD>
    <TD align=right width="20%">1,917,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">21-Apr-14 </TD>
    <TD align=right width="20%">$1.71 </TD>
    <TD align=right width="20%">1,446,167 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">2-Dec-14 </TD>
    <TD align=right width="20%">$4.14 </TD>
    <TD align=right width="20%">100,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">5-Jan-15 </TD>
    <TD align=right width="20%">$4.46 </TD>
    <TD align=right width="20%">1,925,000 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">15-Jan-15 </TD>
    <TD align=right width="20%">$4.77 </TD>
    <TD align=right width="20%">150,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">28-Jan-15 </TD>
    <TD align=right width="20%">$5.00 </TD>
    <TD align=right width="20%">210,000 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">16-Feb-15 </TD>
    <TD align=right width="20%">$4.59 </TD>
    <TD align=right width="20%">120,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">6-Apr-15 </TD>
    <TD align=right width="20%">$5.39 </TD>
    <TD align=right width="20%">100,000 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">16-Sep-15 </TD>
    <TD align=right width="20%">$4.61 </TD>
    <TD align=right width="20%">160,000 </TD>
    <TD align=right width="20%">&nbsp; </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">4-Jan-16 </TD>
    <TD align=right width="20%">$5.13 </TD>
    <TD align=right width="20%">1,960,000 </TD>
  <TD align=right width="20%">&nbsp; </TD>
  </TR>
  <TR vAlign=top>
    <TD align=left>&nbsp; </TD>
    <TD align=right width="20%">&nbsp; </TD>
    <TD align=right width="20%">&nbsp; </TD>
    <TD align=right width="20%">&nbsp; </TD>
    <TD align=right width="20%">12,875,967 </TD></TR>
  <TR vAlign=top bgcolor="#E6EFFF">
    <TD align=left colSpan=3>Preferred shares redeemable into
      Taseko Mines Limited common shares </TD>
    <TD align=right width="20%">&nbsp; </TD>
    <TD align=right width="20%">12,483,916</TD>
  </TR></TABLE>
<P align=justify><B>1.16.3 Internal Controls over Financial Reporting
Procedures</B></P>
<P align=justify>The Company's management is responsible for establishing and
maintaining adequate internal control over financial reporting. The Company&#146;s
internal control system was designed to provide reasonable assurance to the
Company&#146;s management and the Board of Directors regarding the preparation and
fair presentation of published financial statements. </P>
<P align=center>35</P>
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noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>Internal control over financial reporting includes those
policies and procedures that:</P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=0 width="100%" border=0 BCLLIST>

  <TR>
    <TD vAlign=top width="5%">(1) </TD>
    <TD>
      <P align=justify>pertain to the maintenance of records that in reasonable
      detail accurately and fairly reflect the transactions and dispositions of
      the assets of the Company,</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(2) </TD>
    <TD>
      <P align=justify>provide reasonable assurance that transactions are
      recorded as necessary to permit preparation of financial statements in
      accordance with GAAP, and that receipts and expenditures of the Company
      are being made only in accordance with authorizations of management and
      directors of the Company, and</P></TD></TR>
  <TR>
    <TD width="5%">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
  <TR>
    <TD vAlign=top width="5%">(3) </TD>
    <TD>
      <P align=justify>provide reasonable assurance regarding prevention or
      timely detection of unauthorized acquisition, use or disposition of the
      Company&#146;s assets that could have a material effect on the financial
      statements. All internal control systems, no matter how well designed,
      have inherent limitations. Therefore, even those systems determined
      effective can provide only reasonable assurance with respect to financial
      statement preparation and presentation.</P></TD></TR></TABLE>
<P align=justify>The Company&#146;s management, with the participation of the Chief
Executive Officer and the Chief Financial Officer, has evaluated the
effectiveness of internal control over financial reporting based on the
framework and criteria established in Internal Control &#150; Integrated Framework,
issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Based on this evaluation, the Company&#146;s management has concluded that internal
control over financial reporting was effective as of December 31, 2010 to
provide reasonable assurance regarding the reliability of financial reporting
and the preparation of financial statements in accordance with GAAP.</P>
<P align=justify>On March 31, 2010, the Company entered into a Joint Venture
Formation Agreement (the &#147;JVFA&#148;) with Cariboo Copper Corp. Please refer to note
4 of the accompanying financial statements. In connection with the JVFA, the
Company has updated its internal controls over financial reporting, as
necessary, to reflect additional processes and controls. Other than the joint
venture, there are no significant changes in internal controls over financial
reporting that occurred during the year ended December 31, 2010<FONT
color=#1f497d>, </FONT>that could have materially affected or are reasonably
likely to materially affect the Company&#146;s internal control over financial
reporting.</P>
<P align=justify><B>1.16.4 Disclosure Controls and Procedures</B></P>
<P align=justify>The Company&#146;s management, with the participation of its Chief
Executive Officer and Chief Financial Officer, have evaluated the effectiveness
of the Company&#146;s disclosure controls and procedures. Based upon the results of
that evaluation, the Company&#146;s Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of the period covered by this report,
the Company&#146;s disclosure controls and procedures were effective to provide
reasonable assurance that the information required to be disclosed by the
Company under securities legislation is recorded, processed, summarized and
reported within the appropriate time periods and is accumulated and communicated
to management, including the Chief Executive Officer and Chief Financial
Officer, as appropriate to allow timely decisions regarding required
disclosure.</P>
<P align=center>36</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
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<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B>1.16.5 Non-GAAP Measures</B></P>
<P align=justify>This document includes certain non-GAAP performance measures
including &#147;cash production costs&#148; that do not have any standardized meaning
prescribed by GAAP and may not be comparable to similar measures presented by
other companies. The Company believes that these measures are commonly used, in
conjunction with conventional GAAP measures, by certain investors to enhance
their understanding of the Company&#146;s performance. The Company&#146;s use of these
non-GAAP measures is intended to provide additional information that should not
be considered in isolation or as a substitute for performance measures prepared
in accordance with GAAP. The table below provides a reconciliation of the
non-GAAP measures to reported GAAP measures.</P>
<P align=justify><B>Cash Production Cost </B></P>
<TABLE
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; "
cellSpacing=0 cellPadding=3 width="100%" border=0>

  <TR vAlign=top>
    <TD align=left
    borderColor=#000000 bgcolor="#E0E0E0"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid">&nbsp; </TD>
    <TD width="15%" align=right
    borderColor=#000000 bgcolor="#E0E0E0"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid"><B>Year ending</B> </TD>
  <TD width="15%" align=right
    borderColor=#000000 bgcolor="#E0E0E0"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-TOP: #000000 1px solid; BORDER-LEFT: #000000 1px solid"><B>Year ending</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD
    align=left bgcolor="#E0E0E0"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid">&nbsp; </TD>
    <TD width="15%"
    align=right bgcolor="#E0E0E0"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2010</B> </TD>
  <TD width="15%"
    align=right bgcolor="#E0E0E0"
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"><B>December 31, 2009</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left><B>GAAP operating costs (in thousands of CAD)</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%"><B>$ 118,450</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%"><B>$ 109,964</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left>Add: inventory adjustments </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">(3,544) </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">(324) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left>Less: molybdenum credits </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">(12,656) </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">(8,786) </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left>Less: silver credits </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="15%">(2,885) </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="15%">(2,001) </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left>Net operating costs (in thousands of CAD) </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">99,365 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">98,853 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left>Total copper production (in thousands of lbs) </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">92,348 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">70,347 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left>Cost per lb (CAD) </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">1.38 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">1.41 </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left>Average exchange rate </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="15%">1.03 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="15%">1.13 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left><B>Cost per lb (USD)</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%"><B>$ 1.34</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%"><B>$ 1.24</B> </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left>GAAP treatment and transportation costs (in thousands of CAD)
    </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">27,768 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">24,089 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left>Treatment and transportation per lb of copper (in CAD) </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">0.37 </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%">0.34 </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left>Average exchange rate </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="15%">1.03 </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="15%">1.13 </TD></TR>
  <TR vAlign=top>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=left><B>Treatment and transportation cost per lb (in USD)</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%"><B>0.36</B> </TD>
    <TD style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid"
    align=right width="15%"><B>0.30</B> </TD></TR>
  <TR vAlign=top>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=left><B>Total cash cost per lb of copper (in USD)</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="15%"><B>$ 1.70</B> </TD>
    <TD
    style="BORDER-RIGHT: #000000 1px solid; BORDER-LEFT: #000000 1px solid; BORDER-BOTTOM: #000000 1px solid"
    align=right width="15%"><B>$ 1.54</B> </TD></TR></TABLE>
<P align=center>37</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_38></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B>1.16.6 Risk Factors</B></P>
<P align=justify>There are a number of risks that may have a material and
adverse impact on the future operating and financial performance of the Company
and could cause the Company&#146;s operating and financial performance to differ
materially from the estimates described in forward-looking statements relating
to the Company. </P>
<P align=justify><B>Volatility in Metals Prices</B></P>
<P align=justify>The profitability of the Gibraltar mine and the financial
results, exploration, development and mining activities on the Company&#146;s other
properties are directly related and sensitive to the market price of copper,
gold, molybdenum and other metals. Metal prices fluctuate widely and are
affected by numerous factors beyond the Company&#146;s control, including global
supply and demand, expectations with respect to the rate of inflation, the
exchange rates of the United States dollar to other currencies, interest rates,
forward selling by producers, production and cost levels in major producing
regions, global or regional political, economic or financial situations and a
number of other factors such as the sale or purchase of commodities by various
commodity traders, production costs of major mineral producing countries and the
cost of substitutes.</P>
<P align=justify><B>Financing</B></P>
<P align=justify>The Company has been successful at financing its projects and
operations over the years. The Company&#146;s ability to continue its exploration,
assessment, development and operational activities will depend on the resource
industry generally, which is cyclical in nature, and which may, in turn, affect
the Company&#146;s ability to attract financing, including joint venture financing,
debt or bank financing, equity financing or production financing arrangements.
Failure to obtain, or difficulty or delay in obtaining, requisite financing
could result in the delay of certain projects or postponement of further
exploration, assessment or development of certain properties or projects.
Financing through the issuance of equity will result in dilution of existing
shareholders.</P>
<P align=justify><B>Taseko&#146;s Prosperity Project Risks</B></P>
<P align=justify>On January 14, 2010, Taseko received the environmental
assessment certificate for the Prosperity Project from the British Columbia
Provincial Ministry of Environment.</P>
<P align=justify>The Canadian Environmental Assessment process, conducted by a
Federal Review Panel, concluded in May 2010 and the panel submitted their report
to the Government of Canada in early July. In November, the Federal Minister of
Environment announced that the Prosperity mine project, as proposed, could not
be granted federal authorizations to proceed. Taseko suspended work on detailed
engineering and permitting and is currently in discussions with both the Federal
and Provincial Governments to define the issues and determine solutions so that
this mining project can move forward and meet the criteria that the Federal
Government deem appropriate. In February 2011, Taseko announced that it had
submitted a new project description to the federal government.</P>
<P align=center>38</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_39></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>Government approvals and permits are required in connection
with the development of the Prosperity project. Failure to obtain such approvals
and permits in a timely manner, or at all, will delay or even lead to
abandonment of the Prosperity project, which would likely negatively affect the
Company&#146;s share price.</P>
<P align=justify>Furthermore, the feasibility assumes specified, long-term price
levels for gold and copper. The prices of these metals have historically been
volatile, and the Company has no control of or influence on its price, which is
determined in international markets. There can be no assurance that the price of
gold or copper will remain at current levels or that it will not decline below
the prices assumed in the feasibility study. </P>
<P align=justify>The Prosperity project will require substantial financing,
including a possible combination of debt and equity financing. There can be no
assurance that debt and/or equity financing will be available on acceptable
terms. Other general risks include those typical of very large construction
projects, including the general uncertainties inherent in engineering and
construction costs, the need to comply with generally increasing environmental
regulation, and accommodation of local and community concerns. The economics of
the feasibility study are sensitive to the US dollar and Canadian dollar
exchange rate, and this rate has been subject to large fluctuations in the last
several years.</P>
<P align=justify><B>Increased Costs Could Affect Profitability</B></P>
<P align=justify>The cash cost of production is frequently subject to great
variation from one year to the next due to a number of factors, such as changing
strip ratios, ore grade, metallurgy, cost of supplies and services (for example,
electricity and fuel) and the exchange rate of supplies and services denominated
in foreign currencies. If these costs used in connection with the Company&#146;s
operations were to increase significantly, and remain at such levels for a
substantial period, the Company&#146;s cash flows from operations may be negatively
affected. The Company prepares estimates of future production and unit cash
costs of production annually. No assurance can be given that such estimates will
be achieved. Failure to achieve production or cost estimates or material
increases in operating or capital costs could have an adverse impact on the
Company&#146;s future cash flows, profitability, results of operations and financial
condition.</P>
<P align=justify><B>Taseko&#146;s Harmony Project and Aley Project Contain No Known
Reserves of Ore</B></P>
<P align=justify>Although there are known bodies of mineralization on the
Harmony and Aley projects, there are currently no known reserves or body of
commercially viable ore and additional work is required before Taseko can
ascertain if any mineralization may be economic. Exploration for minerals is a
speculative venture necessarily involving substantial risk. If the expenditures
Taseko makes on these properties do not result in discoveries of commercial
quantities of ore, the exploration and acquisition expenditures will be written
off and the value of Taseko stock could be negatively impacted. Under SEC
reserve recognition rules, the Prosperity project does not contain any
reserves.</P>
<P align=justify><B>Exchange Rate Risk</B></P>
<P align=justify>The Company is subject to currency exchange rate risk because
prices of copper and molybdenum are denominated in United States dollars and,
accordingly, the Company&#146;s revenues will be received in United States dollars.
The Company&#146;s expenses are almost entirely denominated in Canadian dollars. The
Company currently does not engage in foreign exchange hedging.
Any strengthening in the Canadian dollar will negatively impact the
profitability of the Company&#146;s mining operations, assuming all else equal.</P>
<P align=center>39</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_40></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify><B>Uncertain Project Realization Values</B></P>
<P align=justify>The Company annually undertakes a detailed review of the
life-of-mine plans for its operating properties and an evaluation of the
Company&#146;s portfolio of development projects, exploration projects and other
assets. The recoverability of the Company&#146;s carrying values of its operating and
development properties are assessed by comparing carrying values to estimated
future net cash flows from each property.</P>
<P align=justify>Factors which may affect carrying values include, but are not
limited to: copper, molybdenum and gold prices; capital cost estimates; mining,
processing and other operating costs; grade and metallurgical characteristics of
ore; and mine design and timing of production. In the event of a prolonged
period of depressed copper prices, the Company may be required to take
additional material write-downs of its operating and development properties.</P>
<P align=justify><B>General Mining Risks </B></P>
<P align=justify>Mining is an inherently risky business with large capital
expenditures and cyclical metals markets. Factors beyond the control of Taseko
will affect the marketability of any minerals discovered and mined. The mining
industry in general is intensely competitive and there is no assurance that,
even if commercial quantities of ore are discovered at the Prosperity project,
Aley project and the Harmony project, a profitable market will exist for the
sale of minerals produced by Taseko. Factors beyond the control of Taseko may
affect the marketability of any substances discovered. </P>
<P align=justify>The operations of Taseko may require licenses and permits from
various governmental authorities. There can be no assurances that Taseko will be
able to obtain all necessary licenses and permits that may be required to carry
out exploration, development and operations at its projects. No assurances can
be given that new rules and regulations will not be enacted or that existing
rules and regulations will not modified in ways that could adversely affect the
Company&#146;s financial position and the results of operations. </P>
<P align=justify>Taseko also competes with many companies possessing far greater
financial resources and technical facilities for the acquisition of mineral
concessions, claims, leases and other mineral interests, as well as for the
recruitment and retention of qualified employees.</P>
<P align=justify>Typical mining risks are also that estimated reserves are not
of the size or grade estimated, and adverse geological or ground conditions,
adverse weather conditions, potential labour problems, and availability and cost
of equipment procurement and repairs can impact operations.</P>
<P align=justify><B>Taseko&#146;s Share Price is Volatile</B></P>
<P align=justify>In recent years, the market price of a publicly traded stock,
especially a resource issuer like Taseko, has experienced a high level of price
and volume volatility. Taseko&#146;s shares have ranged between $0.36 and $20.00 in
the last 18 years and between approximately $7.27 and $0.66 in the last three
years.</P>
<P align=center>40</P>
<HR style="PAGE-BREAK-AFTER: always" align=center width="100%" color=black
noShade SIZE=5>
<!--$$/page=--><A name=page_41></A><BR>
<TABLE width="100%" border=0 cellPadding=0
cellSpacing=0
style="BORDER-COLOR: black; FONT-SIZE: 10pt; BORDER-COLLAPSE: collapse; ">
  <TR vAlign=bottom>
    <TD align=center><img src="tasekologo.jpg" width="384" height="52"></TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center>&nbsp;</TD>
  </TR>
  <TR vAlign=bottom>
    <TD align=center><B>YEAR ENDED DECEMBER 31, 2010</B> </TD>
  </TR>
  <TR vAlign=top>
    <TD style="BORDER-BOTTOM: #000000 1px solid" align=center><B>MANAGEMENT'S
      DISCUSSION AND ANALYSIS</B> </TD>
  </TR>
</TABLE>
<P align=justify>The wide fluctuation in market prices of securities may not
necessarily be related to the operating performance, underlying asset values or
prospects of the Company. Other factors impacting share prices may include the
strength of the economy, market perceptions of the attractiveness of particular
industries, and the breadth of the public market for the stock. The price of the
securities of the Company is also likely to be significantly affected by
short-term changes in commodity prices, other precious metal prices or other
mineral prices, currency exchange fluctuations and the political environment.
The effect of these and other factors on the market price of the common shares
on the TSX and the NYSE Amex suggest that Taseko&#146;s shares will continue to be
volatile.</P>
<P align=justify><B>Environmental Considerations</B></P>
<P align=justify>The estimation of the existing reclamation liability related to
the Gibraltar mine is not free from uncertainty. Mining always entails risks of
spills, pollution, reclamation, and other liabilities and obligations, which
like other mining companies, may adversely affect Taseko. If these challenges
are not properly assessed or if rules become more onerous, Taseko could be
materially adversely affected.</P>
<P align=justify><B>Significant Potential Equity Dilution</B></P>
<P align=justify>Taseko had 12,875,967 share purchase options in-the-money at
March 16, 2011. In addition, Gibraltar&#146;s class of tracking preferred shares
issued for the Harmony project are redeemable for 6,277,000 common shares. The
foregoing may act as an upside constraint on the trading price of Taseko&#146;s
shares.</P>
<P align=center>41</P>
<HR align=center width="100%" color=black noShade SIZE=5>

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`
end
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
