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## COMMANDER RESOURCES LTD. 

(An Exploration Stage Company) 

Notes to Financial Statements 

For the Years Ended December 31, 2012 and 2011 

(Expressed in Canadian dollars) 

## 9. Exploration and Evaluation Assets (Continued) 

## (k) Realization of assets (Continued) 

Resource exploration and development is highly speculative and involves inherent risks. While the rewards if an ore body is discovered can be substantial, few properties that are explored are ultimately developed into producing mines. 

There can be no assurance that current exploration programs will result in the discovery of economically viable quantities of ore. The amounts shown for acquisition costs and deferred exploration expenditures represent costs incurred to date and do not necessarily reflect present or future values. 

## 10. Investment in Maritime 

Pursuant to the agreement between the parties dated June 14, 2010, on October 5, 2010, the Company received 12 million common shares of Maritime in exchange for a 50% interest in the Green Bay Property, located in the King's Point area, Newfoundland. Under the agreement, Maritime was responsible for funding all exploration expenditures and is committed to conducting $750,000 of mineral exploration activities on the property by April 5, 2012. The Company commenced consolidating the results of Maritime from October 5, 2010, the date control was obtained. 

On January 31, 2012, the Company sold its remaining 50% interest in the Green Bay Property to Maritime in exchange for a further 5 million common shares of Maritime, as provided in the agreement dated June 14, 2010. 

On February 15, 2012, the Company sold 4.5 million common shares of Maritime to Rambler Metals and Mining Canada Ltd. through a private transaction at a price of $0.23 per share for gross cash proceeds of $1,035,000. After the sale, the Company held 12.5 million shares of Maritime, representing 47% of Maritime’s issued and outstanding common shares. The Company retains a 2% NSR on future production from portions of the Green Bay Property, which is now wholly owned by Maritime. 

The Company reviewed the elements of control over Maritime in accordance with IAS 27, “Consolidated and Separate Financial Statements”. The Company determined that it no longer had control over Maritime, therefore, no longer needed to consolidate Maritime into its financial statements from February 15, 2012. 

Accordingly, the Company discontinued consolidating the financial results of Maritime and applies the equity accounting method to account for the investment in Maritime after February 15, 2012 in accordance with IAS 28. The Company derecognized the carrying amounts of assets, liabilities and non-controlling interest and recognized its remaining investment in Maritime at its fair value as of the date of deconsolidation. As a result, the Company recorded a gain on disposal of Maritime of $3,186,676 in its statement of income and a decrease of $202,486 in “investing activities” in its statement of cash flows for the year ended December 31, 2012. 

As at December 31, 2012, the Company’s interest of Maritime decreased further, to 41%, after Maritime’s completion of a private placement financing and a loan arrangement. The value of the Company’s investment in Maritime as at December 31, 2012 was as follows: 

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