## 1. Nature of Operations and Going Concern 

Commander Resources Ltd. (the “Company” or “Commander”) is actively exploring and developing its mineral properties and has not yet determined whether these properties contain mineral resources that are economically recoverable. The Company has not earned significant revenues from its mineral property interests and is considered to be in the exploration stage. 

The address of the Company’s corporate office and principal place of business is 1100 - 1111 Melville Street, Vancouver, British Columbia, Canada, V6E 3V6. 

These financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) on a going concern basis, which contemplates that the Company will be able to realize its assets and discharge its liabilities in the normal course of business. Accordingly, these financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue as a going concern. 

The Company has relied on the issuance of share capital to finance its activities. Future capital requirements will depend on many factors including the Company's ability to execute its business plan. The Company intends to continue relying upon the issuance of shares to finance its future activities, but there can be no assurance that such financing will be available on a timely basis under terms acceptable to the Company. Inability to secure future financing would have a material adverse effect on the Company's business, results of operations and financial condition. 

For the year ended December 31, 2012, the Company reported a net income of $924,471 (2011 - net loss of $3,974,813) and as of December 31, 2012 had a deficit of $19,384,712 (December 31, 2011 - $20,937,101), and working capital of $702,207 (December 31, 2011 - $1,292,030). 

## 2. Statement of Compliance 

These annual financial statements are prepared in accordance with IFRS, as issued by the International Accounting Standards Board. The accounting policies set out in Note 3 have been applied consistently to all years presented in these financial statements unless otherwise indicated. These financial statements were authorized for issue by the Board of Directors on February 26, 2013. 

## 3. Summary of Significant Accounting Policies 

These financial statements have been prepared under the historical cost convention, except for certain financial assets and financial liabilities recorded at fair value, including derivative instruments and available-for-sale instruments. The financial statements are presented in Canadian dollars, unless otherwise noted. 

## (a) Principles of consolidation and deconsolidation 

For the year ended December 31, 2012, the financial statements include the accounts of the Company and its former subsidiary, Maritime Resources Corp. (“Maritime”) up to February 15, 2012. Refer to Note 10, “Investment in Maritime”, for details. The comparative figures for 2011 in these financial statements include the accounts of Maritime. 

The interest of non-controlling shareholders is initially measured at the non-controlling interest’s proportionate share of the subsidiary’s identifiable net assets. Subsequent to acquisition, non-controlling interests consist of the amount attributed to such interests at initial recognition and the non-controlling interest’s share of changes in equity since the date of the combination. All material intercompany transactions, balances, income and expenses are eliminated on consolidation. Changes in the Company’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognized directly in equity and attributed to the Company. 

