## MANAGEMENT DISCUSSION & ANALYSIS 

## For the yearended December31, 2012 (Expressed in US dollars) 

## Loans and receivables 

## NEW OROPERU RESOURCES INC. 

Loans and receivables arenon-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They are classified as current assets or non -current assets based on their maturity date. Loans and receivables are carried at amortized cost less any impairment. Loans and receivables comprise accounts receivable and advances to joint venture partner. 

## Borrowings and other financial liabilities 

Borrowings and other financial liabilities are non -derivatives and are recognized initially at fair value , net of transaction costs incurred, and are subsequently stated at amortized cost. Any difference between the amounts originally received, net of transaction costs, and the redemption value is recognized in the statement of lossover the period to maturit y using the effective interest method. 

Borrowings and other financial liabilities are classified as current or non -current based on their maturity date. Financial liabilities include trade payables and accrued liabilities. 

## Fair value 

The carrying values of cash and trade payable s and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments. 

The Company’s risk exposure and the impact on the Company’s financial instruments are as follows: 

a) Credit Risk 

Credit risk is the risk of financial loss to the Company if a customer or counter party to a financial instrument fails to meet its contractual obligations. 

The Company is exposed to concentration of credit risk with respect to its cash ; however, the risk is minimized as cashis placed with major Canadian financial institution s. 

b) Liquidity Risk 

Liquidity risk is the risk that the Company will encounter difficulty in satisfying financial obligations as they become due. The Company's approach to mana ging liquidity risk is to ensure that it will have sufficient assets to meet liabilities when due. As at December 31, 2012, the Company has working capitaldeficiencyof $16,551. As at December 31, 2012, the Company has trade payables and accrued liabili ties of$68,013 which are due in the first and second quarters of 2013. 

c) Market Risk 

Market risk is the risk that the fair value of or future cash flows from the Company’s financial instruments will significantly fluctuate due to changes in market prices.  The value of financial instruments can be affected by changes in interest rates, foreign currency rates and equity prices. Management closely monitors individual interes t rate and foreign currency movements to determine the appropriate course of action to  be taken by the Company. 

