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Notes to Consolidated Financial Statements 

For the years ended June 30, 2010 and 2009 

6. Financial Instruments and Financial Risk Exposure (continued) 

a. Financial Assets and Liabilities (continued) 

The Company’s cash equivalents bear interest at rates between 0.60% to Prime less 2.00% (2009 – Prime less 2.00% to 2.65%) and mature between July 14, 2010 and September 12, 2010 (2009 – July 16, 2009 and September 11, 2009). The instrument maturing July 14, 2010 in the amount of $34,500 was renewed to July 13, 2011 bearing interest at Prime less 1.85% and the remaining instruments were redeemed subsequent to year-end. 

The carrying values of financial liabilities by category at June 30, 2010 and 2009 are as follows: 

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## b. Financial Instrument Risk Exposure 

The Company’s financial instruments are exposed to certain financial risks, including market risk, credit risk, and liquidity risk. 

(i) Market risk 

Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk is comprised of three types of risk: foreign currency risk, price risk and interest rate risk. 

Currency risk 

The Company is exposed to foreign currency risk to the extent expenditures incurred or funds received by the Company are not denominated in Canadian dollars. Proceeds from gold sales are in US dollars. The majority of the Company’s expenditures related to the mine operations and mineral property interests are in Malaysian ringgit, US dollars and Australian dollars. The Company’s ability to generate revenue and to make payments to satisfy its obligations will be affected by foreign currency rate fluctuations. The Company is also exposed to foreign currency risk to the extent that it holds cash in Malaysian ringgit and US dollars. 

As at June 30, 2010 and 2009, the Company is exposed to currency risk through the following assets and liabilities denominated in Malaysian ringgit: 

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Based on the above net exposures as at June 30, 2010, and assuming that all other variables remain constant, a 5% depreciation or appreciation of the Malaysian ringgit against the Canadian dollar would result in an increase/decrease of approximately $151,000 (2009 – $66,000) in the Company’s net losses. 

As at June 30, 2010 and 2009, the Company is exposed to foreign currency risk through the following assets denominated in US dollars: 

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