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ITEM 2 TABLE OF CONTENTS

ITEM 2 TABLE OF CONTENTS ........................................................................................................................ 1Incorporation of Financial Statements and Technical Reports ........................................................ 3Currency and Exchange Rates ......................................................................................................... 3Historical Copper Prices .................................................................................................................. 3Metric Equivalents ........................................................................................................................... 4Cautionary Statement Regarding Forward-Looking Information .................................................... 4Glossary of Terms ............................................................................................................................ 5

ITEM 3 CORPORATE STRUCTURE ................................................................................................................ 9Name and Incorporation .................................................................................................................. 9Intercorporate Relationships ............................................................................................................ 9

ITEM 4 GENERAL DEVELOPMENT OF THE BUSINESS .......... .......... ........... .......... ........... .......... ........... .. 9Three-Year History .......................................................................................................................... 9Significant Acquisitions ................................................................................................................. 10

ITEM 5 DESCRIPTION OF THE BUSINESS .......... ........... .......... ........... .......... ........... .......... ........... .......... .. 10General - Overview ........................................................................................................................ 10Property Description, Location and Claim Status .......................................................................... 12Accessibility, Infrastructure and Physiography ............................................................................. 12History 13Geological Setting .......................................................................................................................... 13Exploration History ........................................................................................................................ 14Mineralization ................................................................................................................................ 15Historical Drilling .......................................................................................................................... 17Exploration in 2007 and 2008 ........................................................................................................ 18Drilling Procedure .......................................................................................................................... 18Sample Preparation, Analyses and Security .................................................................................. 19Mineral Resource and Mineral Reserve Estimation ...................................................................... 19Current Exploration and Development Activities .......................................................................... 20Risk Factors ................................................................................................................................... 21

ITEM 6 DIVIDEND RECORD AND POLICY .......... .......... ........... .......... .......... ........... .......... ........... .......... .... 25ITEM 7 DESCRIPTION OF CAPITAL STRUCTURE .......... .......... ........... .......... .......... ........... .......... ........... 26ITEM 8 MARKET FOR SECURITIES ............................................................................................................. 26ITEM 9 ESCROWED SECURITIES ................................................................................................................. 27ITEM 10 DIRECTORS AND OFFICERS ........................................................................................................... 27

Name, Address and Occupation ..................................................................................................... 27Advisors ......................................................................................................................................... 29Cease Trade Orders, Bankruptcies Penalties or Sanctions ............................................................ 30Conflicts of Interest........................................................................................................................ 31

ITEM 11 PROMOTERS ....................................................................................................................................... 31



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ITEM 12 LEGAL PROCEEDINGS AND REGULATORY ACTIONS ........................................................... 31ITEM 13 INTEREST OF MANAGEMENT AND OTHERS IN MATERIAL

TRANSACTIONS ................................................................................................................................. 31ITEM 14 TRANSFER AGENT AND REGISTRAR .......................................................................................... 31ITEM 15 MATERIAL CONTRACTS ................................................................................................................. 32ITEM 16 INTERESTS OF EXPERTS ................................................................................................................. 32ITEM 17 ADDITIONAL INFORMATION ........... .......... ........... .......... .......... ........... .......... ........... .......... ........... 32ITEM 18 ADDITIONAL DISCLOSURE FOR COMPANIES NOT SENDING

INFORMATION CIRCULARS ........... .......... ........... .......... ........... .......... ........... .......... ........... .......... .. 33



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Incorporation of Financial Statements and Technical Reports

This discussion includes certain statements that may be deemed forward-looking statements. All statements inthis discussion, other than statements of historical facts, that address future production, reserve potential, exploration

drilling, exploitation activities and events or developments that the Company expects are forward-lookingstatements. Although the Company believes the expectations expressed in such forward-looking statements arebased on reasonable assumptions, such statements are not guarantees of future performance and actual results ordevelopments may differ materially from those in the forward-looking statements. Factors that could cause actualresults to differ materially from those in forward-looking statements are discussed herein and include market prices,exploitation and exploration successes, continued availability of capital and financing and general economic, marketor business conditions. Investors are cautioned that any such statements are not guarantee of future performance andthat actual results or developments may differ materially from those projected in the forward-looking statements.

Incorporated by reference into this annual information form (the Annual Information Form or "AIF") are theaudited consolidated financial statements and Management Discussion and Analysis for Copper Mountain MiningCorporation (the Company or Copper Mountain) for the fiscal years ended December 31, 2009 and 2008,together with the auditors report thereon. The financial statements are available for review on the SEDAR website

at www.sedar.com. All financial information in this Annual Information Form is prepared in accordance withgenerally accepted accounting principles in Canada (Canadian GAAP) using Canadian dollars.

Additional documents incorporated by reference in this AIF include all interim financial statements, news releases,the independent technical report pursuant to NI 43-101 dated August 21, 2009 entitled Technical Report on theCopper Mountain Project, Princeton, British Columbia for Copper Mountain Mining Corporation (UpdatedFeasibility Study); and a Technical Report in accordance with National Instrument 43-101 on the CopperMountain Project entitled Resource Estimate Report Copper Mountain Project and prepared by Peter M. Holbek,M.Sc. P.Geo of Copper Mountain Mining Corporation and Gary Giroux, P.Eng of Giroux Consultants Limited anddated April 21, 2009 (Updated Giroux Report) and other continuous disclosure documents filed by CopperMountain, copies of which are available on request from the offices of Copper Mountain or on the SEDAR web site(www.sedar.com).

Currency and Exchange Rates

All dollar amounts in this AIF refer to Canadian dollars unless otherwise indicated. US$ is used to indicate UnitedStates dollar values. The noon rate of exchange on March 18, 2010 as reported by the Bank of Canada for theconversion of Canadian dollars into United States (US) dollars was Cdn$1.00 equals US$0.9898 The followingtable shows the conversion of Cdn dollars into US dollars as reported by the Bank of Canada.

Years Ended December 31

2009 2008 2007 2006 2005

High US $0.7698 US $0.7731 US $0.8435 US $0.8531 US $0.7876

Low US $0.9748 US $1.0241 US $1.0852 US $0.9105 US $0.8682

Average US $0.8757 US $0.9381 US $0.9303 US $0.8817 US $0.8254

Historical Copper Prices

The following table shows the variation in the average daily London Metals Exchange spot copper price in USdollars per pound as reported by Metalprices.com for the years ended December 31, 2009, 2008, 2007, 2006 and2005.
http://www.sedar.com/http://www.sedar.com/http://www.sedar.com/http://www.sedar.com/http://www.sedar.com/http://www.sedar.com/http://www.sedar.com/



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Years Ended December 31

2009 2008 2007 2006 2005

High US $3.33 US $4.07 US $3.76 US $3.99 US $2.11

Low US $1.38 US $1.25 US $2.40 US $2.05 US $1.39

Average US $2.34 US $3.15 US $3.23 US $3.05 US $1.67

Metric Equivalents

For ease of reference, the following factors for converting Imperial measurements into metric equivalents areprovided:

To convert from Imperial To metric Multiply by

Acres Hectares 0.404686

Feet Metres 0.30480

Miles Kilometres 1.609344

Tons Tonnes 0.907185

Ounces (troy)/ton Grams/Tonne 34.2857

Cautionary Statement Regarding Forward-Looking Information

This AIF contains forward-looking statements which may include, but is not limited to, statements with respect tothe future financial or operating performance of the Company and its project, the future price of gold, copper or

other metal prices, the estimation of mineral resources, the realization of mineral resource estimates, the timing andamount of estimated future production, costs of production, capital, operating and exploration expenditures, costsand timing of the development of new deposits, costs and timing of future exploration, requirements for additionalcapital, government regulation of mining operations, environmental risks, reclamation expenses, title disputes orclaims, limitations of insurance coverage and the timing and possible outcome of regulatory matters. Often, but notalways, forward-looking statements can be identified by the use of words such as plans, expects, is expected,budget, scheduled, estimates, forecasts, intends, anticipates, or believes or variations (includingnegative variations) of such words and phrases, or statements that certain actions, events or results may, could,would, might or will be taken, occur or be achieved. Forward-looking statements involve known andunknown risks, uncertainties, assumptions and other factors that may cause the actual results, performance orachievements expressed or implied by the forward-looking statements. Such factors include, among others: generalbusiness, economic, competitive, political and social uncertainties; the actual results of current exploration activities,actual results of reclamation activities; conclusions of economic evaluations; fluctuations in the value of theCanadian dollar relative to the United States dollar; changes in project parameters as plans continue to be refined;

changes in labour costs other costs of equipment or processes to operate as anticipated; accidents, labour disputesand other risks of the mining industry, including but not limited to environmental hazards, cave-ins, pit-wall failures,flooding, rock bursts and other acts of God or unfavourable operating conditions and losses, insurrection or war;delays in obtaining governmental approvals or financing or in the completion of development or constructionactivities, and the factors discussed in the section entitled Risk Factors in this AIF. Although the Company hasattempted to identify important factors that could cause actual actions, events or results to differ materially fromthose described in forward-looking statements, there may be other factors that cause actions, events or results todiffer from those anticipated, estimated or intended. There can be no assurance that forward-looking statements will



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prove to be accurate, as actual results and future events could differ materially from those anticipated in suchstatements. Accordingly, readers should not place undue reliance on forward-looking statements.

Glossary of Terms

Except as otherwise defined, the following terms, when used in this AIF, shall have the following meanings:

Business

Corporations Act

Business Corporations Act(British Columbia), S.B.C. 2002, c. 57, as amended, includingthe regulations promulgated hereunder.

"Common Share" A common share without par value of the Company.

Company or

Copper Mountain

Copper Mountain Mining Corporation, including, unless the context otherwise requires,the Companys subsidiary, Similco Mines Ltd.

Compliance Compliance Energy Corporation, the company from which Copper Mountain acquiredthe option to acquire Similco.

Copper Mountain

Project or Project

The 135 Crown granted mineral claims, 132 located mineral claims, 14 mining leases,and 12 fee simple properties covering an area of 6,702.1 hectares or 67 squarekilometres, located 15km south of Princeton, British Columbia, and certain assetssituated on such property.

Cu Copper

Exchange TSX Exchange.

m Metre

mineral reserve The economically mineable part of a measured or indicated mineral resourcedemonstrated by at least a preliminary feasibility study. This study must includeadequate information on mining, processing, metallurgical, economic and other relevantfactors that demonstrate, at the time of reporting, that economic extraction can bejustified.

The terms mineral reserve, proven mineral reserve and probable mineral reserveused in this AIF are Canadian mining terms as defined in accordance with NI 43-101under the guidelines set out in the Canadian Institute of Mining, Metallurgy andPetroleum (the CIM), Standards on Mineral Resource and Mineral ReservesDefinitions and guidelines adopted by the CIM Council on August 20, 2000 (the CIMStandards).

mineral resource A concentration or occurrence of natural, solid, inorganic or fossilized organic materialin or on the earths crust in such form and quantity and of such a grade or quality that ithas reasonable prospects for economic extraction. The location, quantity, grade,geological characteristics and continuity of a mineral resource are known, estimated or

interpreted from specific geological evidence and knowledge. The term mineralresource covers mineralization and natural material of intrinsic economic interest whichhas been identified and estimated through exploration and sampling and within whichmineral reserves may subsequently be defined by the consideration and application oftechnical, economic, legal, environmental, socio-economic and governmental factors.The phrase reasonable prospects for economic extraction implies a judgment by theQualified Person in respect of the technical and economic factors likely to influence theprospect of economic extraction. A mineral resource is an inventory of mineralizationthat under realistically assumed and justifiable technical and economic conditions might



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become economically extractable. The term mineral resource used in this AIF is aCanadian mining term as defined in accordance with NI 43-101 under the guidelinesset out in the CIM Standards.

mineralization Mineral-bearing rock; the minerals may have been either a part of the original rock unitor injected at a later time.

mineralized Metallic mineral-bearing material; the minerals may have been either a part of theoriginal rock unit or injected at a later time.

MMC Mitsubishi Materials Corporation

NI 43-101 Canadian National Instrument 43-101 Standards of Disclosure for Mineral Projects ofthe Canadian Securities Regulators.

ounces Troy ounces.

Qualified Person An individual who, in accordance with NI 43-101:

(a) is an engineer or geoscientist with at least five years of experience in mineralexploration, mine development or operation or mineral project assessment, orany combination of these;

(b) has experience relevant to the subject matter of the mineral project and thetechnical report; and

(c) is a member in good standing of a recognized professional association.

Similco Similco Mines Ltd., the Companys subsidiary.

TMF Tailings Management Facility

"ton" or "T" A short ton (2,000 pounds).

tonne or t A metric tonne (2,204 lbs)

Tpd Short ton per day.

tpd Metric tonne per day.

Resource Category (Classifications) Used in this AIF

The discussion of mineral deposit classifications in this AIF adheres to the resource/reserve definitions and

classification criteria developed in 2000 by the Canadian Institute of Mining and Metallurgy and updated in

2005 (CIM 2005). There are two broad categories dependant on whether the economic viability has beenestablished: mineral resources are used where economic viability has not yet been established and

mineral reserves are used where economic viability has been demonstrated. Resources are subdividedinto categories depending upon the confidence level of the estimate based on the level of detail of sampling

and geological understanding of the deposit. The categories, from lowest to highest confidence are inferred

mineral resource, indicated mineral resource and measured mineral resource, and are more fully described

below.

The terms Measured, Indicated and Inferred are defined by CIM (2005) as follows:

A Mineral Resource is a concentration or occurrence of diamonds, natural solid inorganic

material, or natural solid fossilized organic material including base and precious metals, coal and



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industrial minerals in or on the Earths crust in such form and quantity and of such a grade or quality

that it has reasonable prospects for economic extraction. The location, quantity, grade, geological

characteristics and continuity of a Mineral Resource are known, estimated or interpreted from specific

geological evidence and knowledge.

The term Mineral Resource covers mineralization and natural material of intrinsic economic

interest which has been identified and estimated through exploration and sampling and within which

Mineral Reserves may subsequently be defined by the consideration and application of technical,economic, legal, environmental, socio-economic and governmental factors. The phrase reasonable

prospects for economic extraction implies a judgement by the Qualified Person in respect of thetechnical and economic factors likely to influence the prospect of economic extraction. A Mineral

Resource is an inventory of mineralization that under realistically assumed and justifiable technical

and economic conditions might become economically extractable. These assumptions must be

presented explicitly in both public and technical reports.

Inferred Mineral Resource

An Inferred Mineral Resource is that part of a Mineral Resource for which quantity and grade

or quality can be estimated on the basis of geological evidence and limited sampling and reasonablyassumed, but not verified, geological and grade continuity. The estimate is based on limited

information and sampling gathered through appropriate techniques from locations such as outcrops,

trenches, workings and drill holes.

Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed

that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured

Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to

allow the meaningful application of technical and economic parameters or to enable an evaluation of

economic viability worthy of public disclosure. Inferred Mineral Resources must be excluded from

estimates forming the basis of feasibility or other economic studies.

Indicated Mineral Resource

An Indicated Mineral Resource is that part of a Mineral Resource for which quantity, grade or

quality, densities, shape and physical characteristics, can be estimated with a level of confidencesufficient to allow the appropriate application of technical and economic parameters, to support mine

planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and

reliable exploration and testing information gathered through appropriate techniques from locations

such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological

and grade continuity to be reasonably assumed.

Mineralization may be classified as an Indicated Mineral Resource by the Qualified Person when

the nature, quality, quantity and distribution of data are such as to allow confident interpretation of the

geological framework and to reasonably assume the continuity of mineralization. The Qualified

Person must recognize the importance of the Indicated Mineral Resource category to the advancement

of the feasibility of the project. An Indicated Mineral Resource estimate is of sufficient quality to

support a Preliminary Feasibility Study which can serve as the basis for major development

decisions.

Measured Mineral Resource

A Measured Mineral Resource is that part of a Mineral Resource for which quantity, grade

or quality, densities, shape, and physical characteristics are so well established that they can be

estimated with confidence sufficient to allow the appropriate application of technical and economic

parameters, to support production planning and evaluation of the economic viability of the deposit.

The estimate is based on detailed and reliable exploration, sampling and testing information gathered

through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill

holes that are spaced closely enough to confirm both geological and grade continuity.



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Mineralization or other natural material of economic interest may be classified as a Measured

Mineral Resource by the Qualified Person when the nature, quality, quantity and distribution of data

are such that the tonnage and grade of the mineralization can be estimated to within close limits and

that variation from the estimate would not significantly affect potential economic viability. This

category requires a high level of confidence in, and understanding of, the geology and controls of the

mineral deposit.



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ITEM 3 CORPORATE STRUCTURE

Name and IncorporationCopper Mountain Mining Corporation was incorporated pursuant to the provisions of the Business Corporations Acton April 20, 2006.

The head office of the Company is located at Suite 1700-700 West Pender Street, Vancouver, British Columbia,V6C 1G8 and the registered office of the Company is located at Suite 2600, 700 West Georgia Street, Vancouver,British Columbia, V7Y 1B3.

Intercorporate RelationshipsThe Company has one subsidiary, Similco, through which the Company owns a 75% interest in the CopperMountain Project. Similco was created pursuant to the laws of the Province of British Columbia on November 1,1996, pursuant to the amalgamation of Similco Mines Ltd. (incorporated in British Columbia on April 20, 1988) andSimilco Resources Ltd. (incorporated in British Columbia on September 8, 1994).

ITEM 4 GENERAL DEVELOPMENT OF THE BUSINESS

Three-Year History

The Company was formed in April 2006 to engage in the business of mineral exploration and development in theProvince of British Columbia. Its objective is to locate and develop economic mineral deposits. In December 2006,the Company acquired all of the shares of Similco, a private British Columbia company which holds the CopperMountain Project, located near Princeton, BC. The Copper Mountain mine site is located approximately 15 kmsouthwest of Princeton, British Columbia and is approximately 270 km from the Port of Vancouver. The deposit wasmined by underground methods between 1923 and 1957. Open pit mining commenced in 1968 and the mine closedin 1996. Independent legal counsel has confirmed that all claims, leases and other land and mineral tenures are ingood standing. Approximately 10% of claims are subject to royalties, but these are in areas where exploration andmining is not now contemplated. In June 2007, the Company completed its initial public offering on the TSXVenture Exchange and became a public company. In September 2008 the Company graduated to the main board ofthe TSX Exchange. The Companys Common Shares are listed on the Exchange under the symbol CUM.

In 2007 and 2008 the Company completed an extensive exploration drilling program that was successful in

confirming additional mineralization. In July of 2008 the Company announced the completion of an independentfeasibility study prepared by Hatch Ltd. together with other consultants, which confirmed the economic viability ofbringing back into production a conventional open pit mine with a 35,000 tonne per day mill. In April 2009 theCompany announced the completion of an updated resource estimate by Gary Giroux, P. Eng, MAsc. that estimatedthe resource of the property at 5 billion pounds of copper, and then in August 2009 the Company announced that thefeasibility study prepared by Hatch Ltd. together with other consultants had been updated based on the newresources and updated reserve. This study indicated that the capital cost estimate for the re-opening the copper mineand mill was $438 million, including a $25 million contingency. The development plan is based on combining thethree existing pits into one larger super pit and with a concentrator designed to produce approximately 105 millionpounds of copper per year in a copper concentrate with gold and silver credits. Over the initial 17 year mine life themine would produce 674,300 tonnes of copper, 4,490,400 ounces of silver and 452,000 ounces of gold.

In October 2008 the Companys Board of Directors authorized management to proceed with the development of the

Copper Mountain Project subject to the Company finalizing its financing arrangements as well as obtaining therequired mine operating permit amendments for the Project. In July 2009, MMC purchased a 25% ownership in theproject for $28.75 million. MMC has been granted a life of mine off-take agreement at market rates and have agreedto use their best efforts to arrange project financing. MMC are currently in the final stages of arranging the projectfinancing. In September 2009 the Company completed a $52 million equity financing that is sufficient to fund itsshare of the project equity. However, under the terms of the shareholders agreement with MMC, Similco must havea $20 million working balance 90 days before the start of commercial production. In the event that Simlco does nothave a $20 million working capital balance, the Company would be subject to a cash call to fund their share of theworking capital requirement. The Company has ordered long lead time major equipment items and site work hasprogressed well with the re-establishment of water, sewer and power to the administration/mine dry building, as well



10

as the commencement of construction activities in the fall of 2009. Mill building foundations are complete and theCompany is now preparing for the installation of the mill building steel later this month. Major items orderedinclude critical loading and hauling mobile equipment, the sag mill and ball mills, as well as a majority of the otherequipment needed to meet the production schedule of mill start-up at full production by June 2011.

Since becoming a public company in June 2007, the Company has prepared and filed; a Technical Report inaccordance with National Instrument 43-101 on the Copper Mountain Project entitled Technical Report on theCopper Mountain Project, Princeton, British Columbia for Copper Mountain Mining Corporation ( dated August21, 2009; a Feasibility Study Technical Report in accordance with National Instrument 43-101on the CopperMountain Project entitled Copper Mountain Mining Corporation Copper Mountain Project IndependentTechnical Report dated September 11, 2008 prepared by Hatch Ltd (Hatch Report or Feasibility Study); aTechnical Report in accordance with National Instrument 43-101 on the Copper Mountain Project entitledResource Estimate Report Copper Mountain Project and prepared by Peter M. Holbek, M.Sc. P.Geo of CopperMountain Mining Corporation and Gary Giroux, P.Eng of Giroux Consultants Limited and dated April 21, 2009 ;and a Technical Report in accordance with National Instrument 43-101on the Copper Mountain Project entitledTechnical Report on the Copper Mountain Project and prepared by Peter M. Holbek, M.Sc. P.Geo of VikingGeoscience and Gary Giroux, P.Eng of Giroux Consultants Limited and dated October 22, 2007 (Giroux Report).All of the above technical reports are filed on SEDAR and are available for review under the Companys name atwww.sedar.com.

Significant AcquisitionsThe only significant acquisition made by the Company since its incorporation was the acquisition of the CopperMountain Project through the acquisition of Similco in December 2006.

In connection with the acquisition, Similco entered into several agreements with Envirogreen, the previous owner,which enable Envirogreen to continue to carry on its soil remediation business on certain portions of the Projectlands. These agreements include a services and access agreement which allows Envirogreen access to certainportions of the Project lands and allows them to use certain water and electrical services, and a soil operationagreement which governs the deposit of remediated soil on portions of the Project lands. The Company does notbelieve that these agreements will impede the development of the Project.

ITEM 5 DESCRIPTION OF THE BUSINESS

General - OverviewThe Company is engaged in the business of mineralexploration and development. The Company's onlyproperty, at this time, is the Copper Mountain Projectlocated near Princeton, British Columbia, (see Figure1). The land covered by the Copper Mountain Projectconsists of 135 Crown granted mineral claims, 176located mineral claims, 15 mining leases, and 12 feesimple properties covering an area of 6,702.1 hectaresor 67 square kilometres. Approximately 10% of theclaims, primarily in the north-eastern property area

where exploration is not currently being carried out,are subject to production royalties (from 1% to 5%).

Figure 1 Property Location Map



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The development will utilize the existing 138 kv power lines on site, as well as the existing 5500 gpm waterfacilities. It will build upon the existing warehouse with an extension to encompass the new truck shop to servicethe new Komatsu mining fleet. A new crusher and concentrator will be built adjacent to the new super pit. Thedevelopment will build upon the existing tailings management facility already established on site. The capital costis estimated at $438 million (including a $25 million contingency allocation). The project will create 258 permanentjobs over an initial 17 year mine life. The Company is finalizing its financing arrangements as well as obtaining therequired mine operating permit amendments for the Project. The Company has ordered long lead time majorequipment items. Site work has progressed well with the re-establishment of water, sewer and power to theadministration/mine dry building. The Company has appointed Merit Consultants Inc. as construction managers,Hatch Ltd. as project engineers, and Gisborne Ltd. as the general contractor. Construction on the projectcommenced with the clearing of the mill site and the pouring of mill foundations in the fall of 2009. Pouring of themill foundations continued throughout the winter months of 2009 and was completed in early 2010. The Companyis now preparing for the installation of the mill building steel later this month. Major items ordered include criticalloading and hauling mobile equipment, the sag mill and ball mills, as well as a majority of the other plant equipmentneeded to meet the production scheduled of mill start-up at full production by June 2011.

The following description and summaries of the Copper Mountain Project, up until the section on current

exploration and development, are based on the Updated Hatch Report and the Updated Giroux Report. These

Technical Reports are filed on SEDAR and are available for review under the Companys name at

www.sedar.com.

Property Description, Location and Claim StatusThe Copper Mountain Project is situated 15 km south of Princeton, British Columbia and 270 km east of Vancouver(Lat. 49 20 N; Long. 120 31 W). The National Topographic System map sheet is 92H/7E. Access to the CopperMountain Project area is via a 28km paved road from the town of Princeton. The property consists of 135 Crowngranted mineral claims, 176 located mineral claims, 15 mining leases, and 12 fee simple properties covering an areaof 6,702.1 hectares or 67 square kilometres. Approximately 10% of the claims, primarily in the north-westernproperty area, are subject to certain production royalties (from 1% to 5%). Copper Mountain owns the projectthrough its 75% ownership of Similco which was purchased in December 2006.

There is a single Crown Grant mineral claim that is outside of the current mine plan, but near to the mining area thatis not owned by the Company. In addition, there are also four individual claims north and south of the mined pits

which are only partially owned by Copper Mountain (50% to 93.75%). The Company has no royalty obligationsand has full ownership of the claims in the proposed pit.

The total claim area straddles the Similkameen River with the Ingerbelle deposit on the west side of the river and theCopper Mountain deposits on the east side of the river. The Ingerbelle side of the property is immediately adjacentto the Hope-Princeton Highway (Hwy. 3) and has numerous roads from previous mining activity. The original millcomplex is located on the Ingerbelle side (east side) and was connected to the Copper Mountain side by a conveyorsystem. Much of the milling equipment has been removed and Compliance holds an option to lease the former plantarea of approximately 94 hectares around the previous mill building on the west side of the Project, consisting of thefollowing claims: May1, Ser 19 fraction, Copper King crown grant L403, L423, L474, Mogul (L255), MogulFraction, Red Buck (L279), May 5 Fraction. Compliance proposes to use the former mill buildings and area for awood fuelled power plant.

Accessibility, Infrastructure and PhysiographyAlmost all of the Project area is accessible by highways, paved access road, or local gravel roads. The pavedgovernment access road is from the town of Princeton to the mine gate. The property is interconnected to theprovincial power grid via a 138KV transmission line. Water for previous operations was pumped from theSimilkameen River under permit and recycled via pumps in the Tailing Management Facility. The operatingpermits have been maintained and an application is pending for an amendment to the existing mine permit.

The topography is gentle to moderate over most of the plateau area of Copper Mountain, where elevations rangefrom 1,050 m to 1,300 m, but becomes rugged in the Similkameen River Canyon. The elevation of the river isapproximately 770 m and the canyon walls are steep.



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The town of Princeton has a population of approximately 3,000 and has a diversified economy driven by ranching,forestry and tourism, although during the mine operation, Similco was the predominate employer in the area. Thetown has services typical of its size; however the general proximity of Vancouver, 270 km to the west by highway,allows many services to be obtained there. Exploration and mining have been and may still be conducted year-round, due to the established roads and the projects proximity to the nearby towns.

The area has a relatively dry climate, typical of the southern interior of British Columbia. Summers are typicallywarm and dry whereas the winters are cool with minor precipitation.

HistoryThe Copper Mountain area has a long history of exploration and production, beginning with initial exploration in thelate 1890s. Successful production was attained in 1923, mostly as an underground mine and continued with minorshut-downs through to 1957 and is referred to as the underground phase. Open pit mining began in 1968 andcontinued, intermittently through to late 1996 and is termed the open pit phase. An exploration drilling program wascarried out in 1997 and thereafter the property was dormant until the Company resumed exploration in January,2007.

A number of attempts at initiating production were made during the period from 1892 to 1922 but wereunsuccessful. In 1923, Granby Consolidated Mining, Smelting and Power Company (Granby) acquired theproperty, built a milling facility in Allenby adjacent to Princeton and extracted 31.5 million tonnes of ore with an

average recovered grade of 1.08% copper, primarily from underground excavations, in, and below, what are now thePit 1 and Pit 3 areas, during the periods from 1925 to 1930 and 1937 to 1957. Ore was transported from an adit onthe east wall of the Similkameen River canyon along a rail line to the concentrator in the town of Allenby. Miningoperations were suspended in 1957, partly due to low metal prices and partly due to transportation charges of the oreby the owners of the rail line.Modern exploration activity began in 1966 when Newmont Mining Corporation of Canada (Newmont) optionedclaims opposite the historical Granby Mine on the west side of the Similkameen River. Newmont carried outgeological mapping, soil sampling and geophysics which resulting in bulldozer trenching delineating a significantmineralized zone. Subsequent drilling defined sufficient resources to contemplate production. During this sametime, Granby was drilling off open pit reserves on Copper Mountain. In late 1967, Newmont purchased Granbysentire mining interest in the district, including a tailings impoundment area. Newmont continued explorationincluding an underground bulk sample from the Ingerbelle deposit. Production commenced from the Ingerbelledeposit in 1972 at 13,600 T/day, in 1974 the mill was expanded to 20,000 T/day.

In 1979, development of mineable reserves on the Copper Mountain side of the project commenced with theinstallation of a new primary crusher and conveyer system. Initial production on the Copper Mountain side was fromPit 2 with additional production from Pit 3 in 1983. Newmont sold its Copper Mountain assets as part of a corporatere-structuring. The entire property was sold to Cassiar Mining Corporation (later to become Princeton Mining Corp.(PMC)) in 1988 and operated under the name Similco Mines Ltd. Similco continued mining from Pits 3 and 1 andlater added a small tonnage from the Virginia Pit. Total production from the camp to 1993 is 1.7 billion pounds ofcopper, 8.4 million ounces of silver and 0.62 million ounces of gold.

In November of 1993, Similco was shut down due to low metal prices and the property was placed on care andmaintenance. An improving copper price, combined with a favourable US-Canadian dollar exchange rate, allowedthe mine to re-open in August 1994. The mine was closed down in late 1996 due to falling metal prices and theCompany purchased the mine in December 2006.

Geological SettingThe Copper Mountain Project is an alkalic porphyry copper-gold camp and is part of a northerly trending Mesozoictectonostratigraphic terrain termed Quesnellia, composed of a volcanic arc with overlying sedimentary sequences,all of which were built on top of a deformed, oceanic sedimentary-volcanic complex (Harper Ranch and Okanogansub-terrains). Quesnellia was formed off-shore to the southwest of continental North America and accreted, withother terrains, onto North America in late Mesozoic times. The principle rock formation of Quesnellia is the LateTriassic Nicola Group, a predominately subaqueous island-arc assemblage composed of volcanic and lessersedimentary rocks that have been intruded by early Jurassic alkalic, calc-alkalic and zoned mafic (Alaska-type)plutons and batholiths.



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The Nicola Group rocks have a stratigraphic thickness of approximately 7.5 km and form a 25 km wide band thatextends from the Canada-U.S. border north to beyond Kamloops Lake. This band has been divided into fourlithologic assemblages that are commonly bounded by sub-parallel fault systems. The western belt is a steeplydipping, east-facing assemblage of sub-aqueous felsic to mafic rocks of calc-alkaline affinity that grade upwardsinto volcaniclastic rocks.

The Copper Mountain alkalic porphyry copper-gold camp occurs in the eastern volcanic belt of the Nicola Group.These volcanic strata are intruded by a suite of early Jurassic alkalic dykes, sills, irregular plugs and zoned plutonsof the Copper Mountain suite, but other than local contact effects and alteration associated with mineralization, thestratified rocks are relatively fresh having undergone only lower greenschist metamorphism.

For additional information incorporated by reference is section 9.2 of the Updated Feasibility Study.

Exploration HistoryThere is little documentation of the early exploration history (pre-1950s) on the property and most of thisinformation must be inferred. Evidence of early workings such as trenches and adits, indicate that early prospecting(1900-1940s) must have been fairly significant. By the mid 1950s Granby was using diamond drilling in additionto percussion drilling for exploration. In the course of their exploration and production drilling, Granby located mostknown zones of mineralization with the possible exception of the Virginia and Alabama but did not definesignificant resources in all locations. Most of Granbys exploration work took place along the Copper Mountainfault where grades were sufficient to support underground mining. Exploration was also conducted on the Voigtzone but this deposit was never developed.

Although Granby developed some small areas of open pit ore at a number of locations during the later stages of themine life, their equipment was ill-suited for efficient open pit mining and a majority of their exploration wasdirected towards development of underground resources. Newmont initiated exploration on claims on the westernside of the Similkameen River and successfully delineated the Ingerbelle deposit. Following acquisition of GranbysCopper Mountain property, Newmont applied the same exploration techniques that had been successful indiscovering the Ingerbelle deposit, namely Induced Polarization geophysical surveys and extensive diamonddrilling. Newmonts IP surveys covered a significant part of the area east of the Copper Mountain fault between Pits1 and 3 and resulted in focused exploration in the Pit 2 area. Most of Newmonts drilling on Copper Mountain wasin the Pit 1 and Pit 2 areas.

Similco Mines carried out diamond drill programs during the periods of 1989-1991 and from 1993-1997. The earlydrill programs were located in the area extending from the eastern end of Pit 2 to the northeast through the Mill Zoneacross the Lost Horse Gulch and into the eastern end of the Alabama Zone. All holes encountered somemineralization with the most success coming from what would become the Virginia deposit. Drilling in the Alabamaarea yielded favourable results, resulting in an inferred resource being estimated for the Alabama area by the mineoperators.

Drilling in the Ingerbelle area in 1994 and 1995 defined additional resources extending easterly, and at depth fromthe Ingerbelle deposit; the low-strip part of these newly defined resources were mined through 1996. A 61 hole,11,800 metre drill program was undertaken in late 1996 and early 1997 to see if additional resources could bedefined in the areas surrounding Pit 2 and Pit 3. Results of this drill program have been incorporated into theUpdated Giroux Report See also Exploration 2008 and 2007 in this AIF.

Precious metals were not routinely analyzed for in the historical data and consequently were not included inestimates of historical resources. Precious metal contents are reasonably well known from production records andgrades can be back-calculated using assumed metallurgical recoveries. The ratio of silver to gold varies, somewhatsystematically, from north to south, and in general, historical precious metal payments received from smeltersgenerally average about 12% of the concentrates value over the life of the operation . At current metal prices thevalue of precious metals within the concentrate would be higher.



Figure 3 Schematic Cross-Section Model of Mineralization at Copper Mountain



Historical Drilling

An extensive amount of both exploration and production drilling has been carried out on the Copper MountainProject. The exploration database compiled and verified by the Company contains approximately 6,200 drill holes ordata strings representing a total of approximately 1.32 million feet (404,000 m). Within this database there aremore than 100,000 assays or analyses. It is estimated that between 30% and 40% of the volume represented by thedrilling has been mined out. Historical drilling can be divided into three phases: 1) drilling by Granby during theunderground era, 2) drilling by Newmont during the open-pit era, and 3) drilling by Princeton (Similco Mines Inc.)up to 1996.

1. Granby initiated exploration and production in the 1930s and maintained very good records of drilllocations, results and logs. All of the Granby drill data was incorporated into the Copper Mountain data baseand used by past operators in reserve estimates and production planning for Pits 1, 2 and 3. Although none ofthe Granby era core has remained useable for verification today, the high level of correlation between reservessupported by Granby drill data and mill-head grades mined from Pits 1 and 3 suggest that both the location andcopper assays of the Granby data were generally of high quality. Granby drilled more than 850 holes on theproperty, with the highest concentration in the Pit 3 area where underground mining took place. A significantfeature of the Granby drill-holes is that much of the underground drilling was in flat or horizontal holes, whichprovides excellent data for mineralization occurring in dominantly vertical structures.

2. Newmont began exploration on the western side of the Similkameen River which led to the discovery of theIngerbelle deposit. Newmont relied almost exclusively on vertical drill holes in the Ingerbelle, Pit 1 and Pit 2deposits, which tended to lead to overestimates of resource grades and underestimates of tonnage. Newmontcarried out limited exploration drilling on other exploration targets around the property through the 1980s.

3. Similco Mines carried out exploration drill programs periodically during its mining operations, most notablyduring the periods of 1989-91, and 1994-1997. Most of these programs were focused in a number of small areasand lead to the definition of reserves in the Virginia deposit and resources in the Alabama deposit, althoughnumerous other areas also received attention.

Summary of Drill-hole data for Copper Mountain

Year Company Type Area Number of

Holes Drilled1917-1957 Granby DDH / U Underground deposits 1,225

1917-1967 Granby DDH Surface exploration 350

1940-1957 Granby DDH (?) UndergroundPit 3

152

1940-1957 Granby Drift /U Underground 1,186

1952-1969 Granby &Newmont

DDH Surface exploration holes 471

1951-1956 Granby DDH /U Underground Pits 1 and 3 980

1966-1969 Granby &Newmont

Perc. Surface; Pits 1 & 2 934

1988-1991 PrincetonMining (PMC)

DDH Surface, Lost Horse-Virginia 228

1994-1996 PrincetonMining

DDH Alabama 82

1994 PMC RC Alabama 29

1996-1997 ImperialMetals

DDH Pit 3, Pit 2, Saddle Zone 61

2007-2008 CMMC DDH Surface, Pit 2, Pit3 Saddle Zone 419

Total 6,117



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Figure 4 Schematic Diagram of Copper Mountain

Showing Historical Open Pits

Exploration in 2007 and 2008The Company initiated exploration on the Project in early 2007 with a program of acquiring and compiling availablehistorical data, including the recovery of historical digital data from the mine site. A diamond drilling program wasinitiated in mid-January 2007 with the objectives of: 1) providing additional verification of the historical drill data,2) testing areas between the existing open pits to determine the potential for discovery of additional mineralizationthat would facilitate expansion of the open pits and even merging of the pits into a super-pit and, 3) providingadditional drill data density in areas of historical resources to assist in upgrading the classification during resourceestimation.

To the left is a schematic diagram ofthe Copper Mountain area showinghistorical open pits, areas of knownmineralization and areas designatedfor exploration.

During 2007 and 2008 the Companydrilled 419 holes in the Pit 2, Pit 3 andSaddle zone areas for a total of106,000 metres. The updated resourceestimate is based on data from over

5,700 historical drill holes totallingapproximately 373,000 metres, as wellas the new drill holes from the 2007and 2008 exploration programs. Theupdated resource estimated wasprepared by Giroux Consultants Ltd.of Vancouver, British Columbia, anindependent qualified person asdefined by Canadas NationalInstrument 43-101 and is included inthis document under the section titledMineral Resource and MineralReserve Estimation.

Historical drilling was validated by comparison to production records and comparison to new drilling. All data wascompiled into a single database but seven domains were subdivided on the basis of location and differentorientations of the structural controls as determined by geology and experimental variography. All historical datawas used during resource estimation but historically mined out areas were then removed from the block model.Block sizes used in the model were 25 by 25 feet by a 40 foot bench height. Block grade interpolation was acombination of ordinary kriging for lower grade, commonly disseminated mineralization, and indicator kriging forhigher grade vein-like mineralization. High grade assays were capped prior to estimation based on a statisticalreview of the data. A majority of the reported resources, particularly the measured and indicated categories occurwithin or adjacent to the Feasibility design pit.

Quality AssuranceIncorporated by reference. See Section 16.2 of the Updated Feasibility Study.

Drilling ProcedureDrilling completed by the Company has been carried out under the supervision of Peter Holbek, P.Geo. V PExploration of the Company, to industry standards with good to excellent core recovery, even in areas of brokenrock. Drill hole collar locations are marked in the field using a hand held GPS instrument and drill-hole locationsare marked with a labelled post after the drill moves off of the site. Drill collars were surveyed by an independentsurvey company prior to final verification of the database for resource estimation. Down-hole surveys are taken bythe geologists using a Swedish made Reflex EZ shot digital magnetic instrument, usually every 100-300 feetdepending upon the degree of hole deviation or deflection.



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Table 1 Resource Summary

Due to the strong structural control on mineralization with multi-directional stockwork veining and fracture fillings,the orientation of drill holes on the property has always been the subject of debate. With the collective experience ofmany years of mining and exploration on the property it is possible to determine preferred orientations of drillingwhich would be perpendicular to the dominant structural direction in any given area, or in the case of two directionalcontrols on mineralization, to choose an orientation that provides a reasonable compromise betweenperpendicularity of the two (or more) directions. For this reason all current exploration drill holes are drilled at -45degrees, or slightly steeper depending upon proximity to known faults and dykes. In the Pit 2 area, the predominatedirections controlling mineralization are north-south and east-west, consequently most drill holes are oriented in theNW-SE directions. In the area north of Pit 3, the north-westerly orientation of the Copper Mountain fault andrelated mineralization, together with the north-south trend results in drill holes being oriented to the southwest ornortheast. However, in many of the areas two drill orientations are chosen to check for orientation bias in the drilldata.

Summary and Interpretation of Drilling ResultsIncorporated by reference. See section 13.2.3 of the Updated Feasibility Study.

Sampling Method and ApproachIncorporated by reference. See Section 14 of the Updated Feasibility Study.

Sample Preparation, Analyses and Security

Incorporated by reference. See Section 15 of the Updated Feasibility Study.

Mineral Resource and Mineral Reserve EstimationIncorporated by reference. See Section 19 of the Updated Feasibility Study.

In March 2009 an update of the Copper Mountain Resource was completed with the additional 2008 drill holesadded. The Pit #2-Mill, Pit3Oriole, Alabama and Virginia zones were re-estimated. For this estimate the compositelength was changed from 40 ft. to 20 ft. in an attempt to better represent the near vertical high grade features. It wasfelt that the larger 40 ft. composites might smooth out these higher grade features. As a result of this change inprocedure, the 40 ft. composited blast holes from Pit #2 and Pit #3 were not used in the modelling or resourceestimate.

The updated resource estimated was prepared by Giroux Consultants Ltd. of Vancouver, British Columbia, an

independent qualified person as defined by Canadas National Instrument 43-101. According to the author of theGiroux Report, delineated mineralization of the Copper Mountain Deposit is classified as a resource according todefinitions from NI 43-101 and from CIM (2005). Methods used in determining and reporting the resources areconsistent with CIM Best Practices Guidelines for the estimation of mineral resources and mineral reserves.

A summary of the resource is in the table below:

Measured Plus Indicated Resource Inferred Resource

Cut-off%Cu

Tonnage(000s)

Grade ContainedCopper (lbs)

Tonnage(000s)

Grade ContainedCopper (lbs)

0.15 518,600 0.31 3,226,000,000 390,700 0.23 1,758,200,000

0.20 359,560 0.37 2,682,800,000 186,710 0.29 1,064,200,000

0.25 256,610 0.43 2,222,200,000 101,440 0.34 683,700,0000.30 189,180 0.49 1,857,600,000 53,130 0.40 420,800,000



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Table 2 Reserve Summary

The estimated mineral reserves for the Copper Mountain deposit are as follows:

Copper Mountain Mineral Reserves.

Pit Category Tons Grade

(000s) %Cu Au g/t Ag g/t

Pit 1 Proven Ore 11,605 0.33 0.07 1.18

Probable Ore 7,971 0.29 0.07 1.01Subtotal 19,576 0.31 0.07 1.11

Pit 2 Proven Ore 41,507 0.30 0.11 0.83Probable Ore 26,671 0.27 0.10 0.76

Subtotal 68,178 0.29 0.11 0.80

Pit 3 Proven Ore 95,551 0.43 0.10 1.59Probable Ore 46,883 0.35 0.08 1.25

Subtotal 14,2434 0.40 0.09 1.47

Oriole Proven OreProbable Ore 2,588 0.34 0.04 1.83

Subtotal 2,588 0.34 0.04 1.83

Total Proven Ore 148,663 0.38 0.10 1.34Probable Ore 84,113 0.32 0.08 1.09

Subtotal 232,776 0.36 0.09 1.25

Key inputs to the mineral reserves estimate included:

recovery of copper was 89.22%;

Copper price in $US/lb was set to $1.80;

exchange rate was $CAN 1 = $US 0.80; and

cut-off grade = 0.15% Cu.

Current Exploration and Development ActivitiesIncorporated by reference. See Section 22, 23, and 28-31 of the Updated Feasibility Study.

The Copper Mountain Mine will be a conventional open pit, truck and shovel operation. The targeted head grade forthe initial three years is over 0.450% copper and the targeted production will entail 12,775,000 tonnes or 14,082,000short tons per annum of mill feed. Total mine production rates will reach up to 56,200,000 tonnes or 61,700,000short tons per annum.

The portions of the mineral reserve that comprised the forecast production plan including the associated schedule orsequence based cut-off grades required to maintain sustained mill feed, are summarized in the Updated FeasibilityStudy. The projected pits are divided into multiple development phases of proposed pits sequences (pushbacks) andwaste placement dumps. This development sequence is designed to release the highest grade of copper feed on acontinual basis and is reflected in the planned pit phases.

The primary loading function will be under taken by two Komatsu PC 8000 hydraulic face shovels with a bucketcapacity of 49 yd3 and a large wheel loader with a 23.5 yd3 bucket that are capable of loading the 240 ton trucks.This fleet will be capable of moving 170,000 tons per day. Ore will be hauled to a 60 inch x 89 inch gyratory styleprimary crusher located northeast of the Pit #3. Overburden will be placed on a run-of-mine basis to locations bestsuited to minimizing reclamation re-handling costs while avoiding mineralized areas. Mining operations will carryon for 12 years, after which the currently planned ultimate pits will be mined out and mill feed will continue for anadditional four years by drawing down the low grade stockpile.



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Table 3 Planned Production

The tons mined and sent to the mill via a conveyor and will be developed based upon maximizing the sustainablemill head grade. The total mill feed at a 0.15% copper cut-off is 232,800,000 tons (211,200,000 tonnes) at 0.36%copper. The total overburden and waste mined to provide this mill feed is 455,400,000 tons (413,200,000 tonnes).The projected overall strip ratio per ton (tonne) of ore milled is 2.0:1. Low grade ore will be stockpiled forprocessing in the final years of the planned development.

The current schedule has preproduction mining starting in the summer of 2010 with the arrival of half of the miningfleet. Construction will continue throughout 2010 on the new crusher and concentrator which is expected to becompleted by April 2011, with full production scheduled to be achieved by June 2011.

A summary of the planned production is in the table below:

Mine Production Y1 to Y5 Y6 to Y10

TOTAL

(Life of Mine)

Mine life 16.5 years

Total high grade ore to mill (t) 63,871,000 63,875,000 145,656,000

Total low grade ore to mill (t) 0 0 65,525,000

Total tonnes mined and processed (t) 63,871,000 63,875,000 211,181,000

Average daily mill throughput (t/day) 35,000 35,000 35,000

Ore Grades

Copper (%) 0.43 0.41 0.36Silver (estimated) (g/dry t) 1.65 1.47 1.36

Gold (estimated) (g/dry t) 0.10 0.12 0.10

Recoveries

Copper (%) 89.2 (High Grade) 89.2 (High Grade) 89.2 (High Grade)84.9 (Low Grade)

Silver (%) 66.0 66.0 66.0

Gold (%) 48.8 48.8 48.8

Concentrate Grades

Copper concentrate grade (%) 30 30 30

Total Metal Production

Copper (t) 245,400 235,000 674,300

Silver (oz) 1,649,100 1,477,000 4,490,400

Gold (oz) 134,400 166,400 452,000

The Company has allocated $2 million from the equity financing completed in September 2009 towards explorationactivities. The Company plans on drilling additional deep holes to test the vertical extension of the mineralizationbelow Pit #3, and in addition will drill some infill holes in the Oriel area commencing in the second quarter of 2010to see if additional mineralization may be defined there for a higher grade starter pit.

Risk FactorsThe operations of the Company are speculative due to the high-risk nature of its business, which is the acquisition,financing, exploration, development and operation of mining properties. The risks below are not the only onesfacing the Company. Additional risks not currently known to the Company, or that the Company currently deemsimmaterial may also impair the Company's operations. The order in which the following risk factors appear doesnot necessarily reflect managements opinion of their order or priority.

General The Company is in the business of exploring and developing mineral properties, which is a highlyspeculative endeavour. Prospective purchasers should evaluate carefully the following risk factors prior topurchasing any of the Companys securities.

Limited Operating History The Company has no history of earnings. There are no known commercial quantitiesof mineral reserves on the Companys properties. The Company is in the process of carrying out exploration and



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development with the objective of establishing economic quantities of mineral reserves. There can be no assurancethat the Company will achieve profitability in the future.

Exploration and Development Risks Resource exploration and development is a speculative business,characterized by a number of significant risks including, among other things, unprofitable efforts resulting not onlyfrom the failure to discover mineral deposits but also from finding mineral deposits that, though present, areinsufficient in quantity and quality to return a profit from production. The marketability of minerals acquired ordiscovered by the Company may be affected by numerous factors that are beyond the control of the Company andthat cannot be accurately predicted, such as market fluctuations, the proximity and capacity of milling facilities,mineral markets and processing equipment, and such other factors as government regulations, including regulationsrelating to royalties, allowable production, importing and exporting minerals and environmental protection, thecombination of which factors may result in the Company not receiving an adequate return of investment capital. Allof the claims to which the Company has a right to acquire an interest are in the exploration stage only and arewithout a known body of commercial ore. Development of the subject mineral properties would follow only iffavourable exploration results are obtained.

The business of exploration for minerals and mining involves a high degree of risk. Few properties that are exploredare ultimately developed into producing mines. There is no assurance that the Companys mineral exploration anddevelopment activities will result in any discoveries of commercial bodies of ore. The long-term profitability of theCompanys operations will in part be directly related to the costs and success of its exploration programs, which

may be affected by a number of factors.

Substantial expenditures are required to establish reserves through drilling and to develop the mining and processingfacilities and infrastructure at any site chosen for mining. Although substantial benefits may be derived from thediscovery of a major mineralized deposit, no assurance can be given that minerals will be discovered in sufficientquantities to justify commercial operations or that funds required for development can be obtained on a timely basis.

Lack of Availability of Resources Mining exploration requires ready access to mining equipment such as drills,and crews to operate that equipment. There can be no assurance that such resources will be available to theCompany on a timely basis or at a reasonable cost. Failure to obtain these resources when needed may result indelays in the Companys exploration programs.

Requirement for Additional Financing The further development and exploration of the Companys project

depends upon the Companys ability to obtain financing through equity financing, joint ventures, debt financing, orother means. There is no assurance that the Company will be successful in obtaining required financing as andwhen needed. Volatile markets for precious and base metals may make it difficult or impossible for the Company toobtain equity financing or debt financing on favourable terms or at all. Failure to obtain additional financing on atimely basis may cause the Company to postpone its development plans, forfeit rights in some or all of its propertiesor reduce or terminate some or all of its operations.

Uninsurable Risks The Companys business is subject to a number of risks and hazards generally, includingadverse environmental conditions, industrial accidents, labour disputes, unusual or unexpected geologicalconditions, ground or slope failures, cave-ins, changes in the regulatory environment and natural phenomena such asinclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineralproperties or production facilities, personal injury or death, environmental damage to the Companys properties orthe properties of others, delays in mining, monetary losses and possible legal liability.

Although the Company maintains insurance to protect against certain risks in such amounts as it considers to bereasonable, its insurance may not cover all the potential risks associated with a mining companys operations. Th eCompany may also be unable to maintain insurance to cover these risks at economically feasible premiums.Insurance coverage may not continue to be available or may not be adequate to cover any resulting liability.Moreover, insurance against risks such as environmental pollution or other hazards as a result of exploration andproduction is not generally available to the Company or to other companies in the mining industry on acceptableterms. The Company might also become subject to liability for pollution or other hazards which may not be insuredagainst or which the Company may elect not to insure against because of premium costs or other reasons. Losses



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from these events may cause the Company to incur significant costs that could have a material adverse effect uponits financial performance and results of operations.

Environmental Regulations, Permits and Licenses By purchasing the shares of Similco, the Company hasassumed certain pre-existing site reclamation obligations in respect of the Copper Mountain Project. These costs arereflected in the Companys financial statements that are incorporated by reference into this AIF.

The Companys operations may be subject to environmental regulations promulgated by government agencies fromtime to time. Environmental legislation provides for restrictions and prohibitions on spills, releases or emissions ofvarious substances produced in association with certain mining industry operations, such as seepage from tailingsdisposal areas, which would result in environmental pollution. A breach of such legislation may result in theimposition of fines and penalties. In addition, certain types of operations require the submission and approval ofenvironmental impact assessments. Environmental legislation is evolving in a manner that means standards arestricter, and enforcement, fines and penalties for non-compliance are more stringent. Environmental assessments ofproposed projects carry a heightened degree of responsibility for companies and directors, officers and employees.The cost of compliance with changes in governmental regulations has a potential to reduce the profitability ofoperations. The Company intends to comply fully with all environmental regulations. The current or futureoperations of the Company, including development activities and commencement of production on its properties,require permits from various federal, provincial and local governmental authorities, and such operations are and willbe governed by laws and regulations governing prospecting, development, mining, production, exports, taxes, labour

standards, occupational health, waste disposal, toxic substances, land use, environmental protection, mine safety andother matters.

Such operations and exploration activities are also subject to substantial regulation under applicable laws bygovernmental agencies that may require the Company to obtain permits from various governmental agencies. Therecan be no assurance, however, that all permits that the Company may require for its operations and explorationactivities will be obtainable on reasonable terms or on a timely basis or that such laws and regulations will not havean adverse effect on any mining project which the Company might undertake.

Failure to comply with applicable laws, regulations, and permitting requirements may result in enforcement actionsthereunder, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed,and may include corrective measures requiring capital expenditures, installation of additional equipment, orremedial actions. Parties engaged in mining operations may be required to compensate those suffering loss or

damage by reason of mining activities and may have civil or criminal fines or penalties imposed for violations ofapplicable laws or regulations and, in particular, environmental laws.

Amendments to current laws, regulations and permits governing operations and activities of mining companies, ormore stringent implementation thereof, could have a material adverse impact on the Company and cause increases incapital expenditures or production costs or reduction in levels of production at producing properties or requireabandonment or delays in development of new mining properties.

To the best of the Companys knowledge, it is operating in compliance with all applicable environmental rules andregulations.

Mineral Exploration and Mining Carry Inherent Risks Mining operations are subject to hazards normallyencountered in exploration, development and production. These include unexpected geological formations, rock

falls, flooding dam wall failure and other incidents or conditions which could result in damage to plant or equipmentor the environment and which could impact production throughput. Although it is intended to take adequateprecautions to minimize risk, there is a possibility of a material adverse impact on the Companys operations and itsfinancial results.

Title Risks Although the Company has exercised the usual due diligence with respect to determining title toproperties in which it has a material interest, there is no guarantee that title to such properties will not be challengedor impugned. The Companys mineral property interests may be subject to prior unregistered agreements or transfersor native land claims and title may be affected by undetected defects. Surveys have not been carried out on any ofthe Companys mineral properties in accordance with the laws of the jurisdiction in which such properties are



24

situated; therefore, their existence and area could be in doubt. Until competing interests in the mineral lands havebeen determined, the Company can give no assurance as to the validity of title of the Company to those lands or thesize of such mineral lands.

The Company has reviewed the land title searches for its Crown granted mineral claims. These searches contain"remarks" which purport to describe the nature of the undersurface rights held by the Company however theseremarks are not binding or definitive. A full review of the original Crown grants and all subsequent transferdocuments would be required in order to determine the definitive rights of the Company to undersurface rights. Thisreview has not been conducted at this time.

Four Crown granted claims within the overall lands held by the Company are owned only partially by the Company(with ownership between 50% and 93.75% of certain Crown granted claims). Most of these claims are outside ofthe historical mining plan area. However, the pit plan could partially extend into a small Crown granted claim inwhich the Company only has a 50% interest. If the Company wishes to proceed with the development of the pit onthat claim, it will have to negotiate with the owner of the other 50% of the claim for the terms of furtherdevelopment of the portion of the pit which is on that claim. At present, there are no agreements with the co-ownerof the claim. In addition, certain claims are subject to production royalties ranging from 1% to 5%. The currentdevelopment plan does not extend onto any claims which are subject to these royalties.

Aboriginal Land Claims Many lands in British Columbia are or could become subject to aboriginal lands claim totitle, which could adversely affect the Companys title to its properties. While the Company act ively consults withall groups which may be adversely affected by the Companys activities, including aboriginal groups, there can beno assurance that satisfactory agreements can be reached.

Competition The mining industry is intensely competitive in all its phases, and the Company competes with othercompanies that have greater financial resources and technical facilities. Competition could adversely affect theCompanys ability to acquire additional suitable properties or prospects in the future.

Management The success of the Company is currently largely dependent on the performance of its board ofdirectors and its senior management. The loss of the services of these persons will have a materially adverse effecton the Companys business and prospects. There is no assurance the Company can maintain the services of itsboard of directors and management or other qualified personnel required to operate its business. Failure to do socould have material adverse affect on the Company and its prospects.

Metal Prices are Volatile The mining industry is intensely competitive and there is no assurance that, even ifcommercial quantities of a mineral resource are discovered, a profitable market will exist for the sale of the same.There can be no assurance that metal prices will be such that the Companys properties can be mined at a profit.Factors beyond the control of the Company may affect the marketability of any minerals discovered. Metal pricesare subject to volatile price changes from a variety of factors including international economic and political trends,expectations of inflation, global and regional demand, currency exchange fluctuations, interest rates and global orregional consumption patterns, speculative activities and increased production due to improved mining andproduction methods. The supply of, and demand for, the Companys principal products and exploration targets,gold, copper and silver, is affected by various factors, including political events, economic conditions andproduction costs.

Infrastructure Mining, processing, development and exploration activities depend, to one degree or another, on

adequate infrastructure. Reliable roads, bridges, power sources and water supply are important determinants whichaffect capital and operating costs. Unusual or infrequent weather phenomena, terrorism, sabotage, government orother interference in the maintenance or provision of such infrastructure could adversely affect the Companysoperations, financial condition and results of operations.

Conflict of Interests Certain of the directors and officers of the Company are directors or officers of, or havesignificant shareholdings in, other mineral resource companies and, to the extent that such other companies mayparticipate in ventures in which the Company may participate or may wish to participate, the directors of theCompany may have a conflict of interest in negotiating and concluding terms respecting the extent of suchparticipation. Such other companies may also compete with the Company for the acquisition of mineral property



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rights. In the event that any such conflict of interest arises, a director or officer who has such a conflict will disclosethe conflict to a meeting of the directors of the Company and, if the conflict involves a director, the director willabstain from voting for or against the approval of such a participation or such terms. In appropriate cases, theCompany will establish a special committee of independent directors to review a matter in which several directors,or management, may have a conflict. From time to time, several companies may participate in the acquisition,exploration and development of natural resource properties thereby allowing their participation in larger programs,permitting involvement in a greater number of programs and reducing financial exposure in respect of any oneprogram. It may also occur that a particular company will assign all or a portion of its interest in a particularprogram to another of these companies due to the financial position of the Company making the assignment. Inaccordance with the provisions of the Business Corporations Act the directors and officers of the Company arerequired to act honestly in good faith, with a view to the best interests of the Company. In determining whether ornot the Company will participate in a particular program and the interest therein to be acquired by it, the directorswill primarily consider the potential benefits to the Company, the degree of risk to which the Company may beexposed and its financial position at that time.

Acquisition of Additional Mineral Properties If the Company loses or abandons its interest in its properties, thereis no assurance that it will be able to acquire another mineral property of merit or that such an acquisition would beapproved by the Exchange. There is also no guarantee that the Exchange will approve the acquisition of anyadditional properties by the Company, whether by way of option or otherwise, should the Company wish to acquireany additional properties.

Key Personnel Recruiting and retaining qualified personnel is critical to the Companys success. The number ofpersons skilled in the acquisition, exploration and development of mining properties is limited and competition forsuch persons is intense. As the Companys business activity grows, it will require additional key financial,administrative, mining, marketing and public relations personnel as well as additional staff on the operations side.Although the Company believes that it will be successful in attracting and retaining qualified personnel, there can beno assurance of such success.

Dilution There are a number of outstanding options and warrants pursuant to which additional Common Sharesmay be issued in the future. Exercise of such options and warrants may result in dilution to the Companysshareholders. In addition, if the Company raises additional funds through the sale of equity securities, shareholdersmay have their investment further diluted.

Operations Dependent on Revenues and Financings The continued operation of the Company will be dependentupon its ability to generate operating revenues and to procure additional financing. There can be no assurance thatany such revenues can be generated or that other financing can be obtained. If the Company is unable to generatesuch revenues or obtain such additional financing, any investment in the Company may be lost. In such event, theprobability of resale of the shares purchased would be diminished.

Price Volatility of Publicly Traded Securities In recent years, the securities markets in the United States andCanada have experienced a high level of price and volume volatility, and the market prices of securities of manycompanies have experienced wide fluctuations in price which have not necessarily been related to the operatingperformance, underlying asset values or prospects of such companies. There can be no assurance that continualfluctuations in price will not occur. It may be anticipated that any quoted market for the Common Shares will besubject to market trends generally, notwithstanding any potential success of the Company in creating revenues, cashflows or earnings.

ITEM 6 DIVIDEND RECORD AND POLICY

The Company has not paid any dividends since incorporation and does not anticipate declaring any dividends on itsCommon Shares in the foreseeable future. The directors of the Company will determine if and when dividendsshould be declared and paid in the future based on the Companys financial position at the relevant time.



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ITEM 7 DESCRIPTION OF CAPITAL STRUCTURE

The Company has an authorized share capital of an unlimited number of Common Shares without par value ofwhich 77,570,377 Common Shares were issued and outstanding as fully paid and non-assessable as of December 31,2009

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