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Notes to Consolidated Financial Statements 

For the years ended June 30, 2010 and 2009 

## 9. Deferred costs 

Deferred costs are comprised of the following: 

a. Deferred business acquisition cost: the Company has incurred $14,981 in legal expenditures related to the Famehub Acquisition (notes 8(c) and 21(b)). In addition, $50,000 which was incurred in 2009 was reclassified from mineral property interests to deferred costs in 2010 (note 8(c)). 

b. Deferred financing costs: the Company has incurred $173,518 (2009 - $nil) in legal and regulatory costs associated with the $8,000,000 convertible notes and $5,000,000 gold forward sale financing (note 21(a)). 

## 10. Capital Lease Obligation 

As at June 30, 2010 and 2009, the Company has three long-term leases on vehicles for its operations at rates ranging from 5.2% to 6.5%. 

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## 11. Asset Retirement Obligation 

The Company’s asset retirement obligation consists of reclamation and closure costs for mine development and exploration activities. Although the ultimate amount of reclamation costs to be incurred cannot be predicted with certainty, the total undiscounted amount of estimated cash flows required to settle the Company’s estimated obligations is $4.5 million. The present value of asset retirement obligations is $2,566,438 (2009 - $1,502,309) and is expected to be settled over the next ten years. This amount has been disclosed using a credit and inflation adjusted risk free rate of 10.0%. Significant reclamation and closure activities include land rehabilitation, decommissioning of tailing storage facilities, mined waste dump, road bridges, buildings and mine facilities. 

Changes to the reclamation and closure cost balance during the 2010 and 2009 years are as follows: 

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The revision in estimate of liabilities in 2010 and 2009 was the result of the development on Selinsing. 

