Focusing On Green & Alternative Energy Economies - Gossan Also Holds A 46.7% Equity Investment in The Claims Network

lithium
Li
6.941
magnesium
12
Mg 2010 ANNUAL REPORT

24.305
titanium vanadium
22 23
Ti V
47.867 50.942
COMMODIT Y DIVERSE E XPLOR ATION | GREEN ENERGY DEMAND

Gossan Resources Limited is engaged in the
exploration and development of a broadly di-
gossan resou rces versified portfolio of properties hosting gold,
is engaged in the platinum group and base metals, as well as the
specialty and minor metals - tantalum, lithium,
e xpLoration & chromium, titanium and vanadium. Gossan also
holds a large deposit of magnesium-rich dolomite,
de velopment of a
the world-wide rights to the Zuliani magnesium
broadly diversified production process, and a high-purity silica sand
deposit. All of the properties are located in
portfolio of properties, Manitoba and north-western Ontario.
FOCUSED ON THE Gossan also holds a 46.7% equity investment
GREEN & ALTERNATIVE in The Claims Network, a web-based service
provider to the property & casualty insurance
ENERGY ECONOMies industry. With representatives across Canada
and an extensive proprietary database of prod-
uct specifications and price information, TCN
provides the insurance industry with contents loss
valuations and on-site claims reporting of losses.
Gossan trades on the TSX Venture Exchange under

the symbol GSS and on the Frankfurt-Freiverkehr
& the Xetra Exchanges under the symbol GSR –
WKN 904435. As of August 25, 2010, Gossan has
29,117,900 common shares outstanding.
A B O V E : MAGNESIUM CORE at Inwood

Gossan Resources Limited | 2010 Annual Report
L e t t e r t o S h a r e ho l de r s
1
Dear Shareholders,
Over the past year, Gossan has been pursuing the development of its two most advanced projects – the Inwood
Magnesium Project and the Manigotagan Silica Sand Project. Both of these projects have defined deposits and are
moving through development towards production. The type of process testing work that needs to be undertaken
at this time to assess these projects’ economic viability is a lengthy but necessary stage of development. Gossan
is continuing to move select projects forward to meet the upcoming demand in the green and alternative energy
economies.
During the year, Gossan has made significant progress in the development of the Zuliani Process for the production
of magnesium. The second stage of the evaluation process – three phases of bench scale testing – were successfully
completed at Process Research Ortech and it was demonstrated that the process could produce magnesium metal
at atmospheric conditions with exceptionally high raw material efficiencies and with low carbon emmissions.
The third stage of evaluation, involving a material increase in the scale of testing using specialized equipment,
is currently being planned and resources are being sourced. When all factors are considered, the direct operating
cost of magnesium ingot produced with the Zuliani Process is expected to be about 30% less than the direct cost of
Chinese magnesium ingot landed in western markets. Magnesium continues to be an important element in attaining
energy efficiency and reducing carbon emissions across the transportation sector due to its qualities of light-weight
strength.
Ongoing testing of silica sand from the Manigotagan deposit for use as frac sand in the oil and gas industry has
resulted in samples of the 20/40, 30/50 and 70/140 mesh fractions consistently meeting ISO 8K and 9K Proppant
ratings. A marketing study is underway to provide product price and market size data along with potential customers
and competitors within economically transportable distances for each product type. Results from this study may
lead to a scoping report providing an initial economic assessment of the Manigotagan deposit.
Other field programs with our joint venture partners - Marathon PGM at the Bird River Project and the Cross Lake
First Nation at the Pipestone Lake Project – have also advanced the Company’s interests. PGMs are the key elements
in catalytic converters which reduce auto emissions of greenhouse gasses. Two new green applications for vanadium
in electrical storage technology – lithium auto batteries and grid-scale load batteries - could, by some analysts’ forecasts,
increase demand for vanadium by over 50% in the next 5 years.
The Company is continuing to actively examine new potential properties to expand its portfolio, primarily in the
gold and magnesium-related sectors.
Gossan’s investment in The Claims Network, a service provider to the insurance industry, is in the process of maturing.
TCN grew rapidly over the past two years and is now generating significant amounts of sales, profits and cash flow.
It is my pleasure to thank Gossan’s officers, directors, staff and consultants for their efforts and the Company’s
shareholders, whom we serve, for their continuing support. Gossan is a unique company well positioned for the
development of a green economy emphasizing renewable energy. The outlook for magnesium, platinum and
palladium, vanadium, and frac sand will also benefit from the ongoing concern with high energy prices, climate
change and the resultant affects upon the transportation industry.
August 25, 2010
Douglas Reeson
President & Director
s p e ci a lt y M e ta l s
2
magnesium In w o o d p r o j e c t & Z u l i a ni p r o c e s s
12 Magnesium
m a gn e s iu m is essential
Mg The 1,635-hectare Inwood Magnesium Property is located
in south-central Manitoba. In total Gossan’s regional land in imporoving energy
24.305
package covers 6,231 hectares in several claim blocks. The
Company’s land position is designed to hold all of the area’s efficiency & reducing
near-surface beds of high-purity dolomite.
carbon emmissions in
The Inwood Magnesium Project is being advanced based
on the expectation of higher magnesium prices - currently the transport sector
over US $1.20 per pound - and the development of more
energy and cost efficient magnesium extraction process
by lightening vehicle
technology which is the current focus of the Company. weight. This maybe
On March 15, 2007, Gossan entered into a licensing
arrangement for the worldwide rights to a new high ef- particularily important
ficiency magnesium production process being developed by
in extending the range
Douglas J. Zuliani. The new process is based on an efficient
adaptation of the Magnetherm process. The Zuliani process of electric cars
is designed to achieve operating cost savings by process
efficiency improvements that significantly reduce both en-
ergy and key raw material requirements. These enhance- magnesium metal under atmospheric conditions at
ments to the traditional Magnetherm method materially exceptionally high raw material efficiencies. At the
improve both magnesium recovery and silicon reduction demonstrated efficiencies, raw material consumption
efficiency without the need for a vacuum. Energy use and is about 20% lower for dolomite and 30% lower for
cost is further reduced by development of a technically silicon than for a typical Pidgeon plant operating
straightforward method that will ensure highly efficient in China. These findings give further credence to
condensation of liquid magnesium metal. Low cost hydro the Zuliani Process ultimately providing the lowest
electricity is abundantly available in Manitoba. operating cost per pound of magnesium by a material
margin.
In order to prove out the technology prior to commercializa-
tion, Gossan is undertaking a four stage evaluation process. As the Zuliani Process operates at atmospheric condi-
Initially FactSage thermodynamic modeling was successfully tions, the process avoids the complexities and added
used to verify the process fundamentals. The second stage, costs associated with operating under a vacuum. At-
which involved bench scale testing at Process Research Ortech mospheric magnesium production is also expected
(PRO) of Mississauga was successfully completed earlier in to facilitate direct production of molten magnesium
2010 with the results confirming the predictions from the metal without the added cost, energy and yield losses
initial thermodynamic modeling. The third stage which associated with melting and refining of solid crude
will materially increase the scale of testing using special- magnesium as produced with the Pidgeon Process.
ized equipment is currently being planned with PRO.
When all factors are considered including pre-
Thereafter a fourth stage pilot demonstration plant will be
vailing dolomite & ferrosilicon costs, labor rates,
constructed to confirm commercial viability. Gossan may
energy prices and overseas freight, the direct cost
seek a joint venture partner to assist in the pilot plant and
of magnesium ingot produced with the Zuliani
subsequent commercialization of the process.
Process is expected to be about 30% less than the
On April 27, 2010, Gossan announced the results of the direct cost of Chinese magnesium ingot landed in
Phase III bench scale tests at Process Ortech. The series of western markets, subject to confirmation of the
six tests used a larger sample size in newly designed test process at commercial scale.
equipment and confirmed that the Zuliani Process produces

3
The high raw material efficiencies coupled with the
use of hydro electricity will lower the environmen-
tal impact of magnesium production dramatically
as compared to existing production technologies.
Gossan has contracted Process Ortech to under-
take a Carbon Emission Study of the Zuliani Pro-
cess. Cap and Trade legislation pertaining to Green
House Gas emissions in North America is widely
anticipated to be introduced and mandated. This
legislation, which supports the development of
cleaner production processes, may have a material
effect on the project’s economics.
In 2006, Gossan completed a 27-hole drill pro-
gram, totaling 496 metres, on the Property. Watts, PHASE I
Griffis McOuat independently calculated a Nation-
al Instrument 43-101 compliant resource based
on the results from the 2006 drill program and
25 holes previously drilled on the Property. The
program targeted 80 hectares of the Fisher Branch
Formation which typically outcrops at surface and
extends to a depth of about 12-15 metres.
The Watts, Griffis and McOuat National Instrument

43-101 Report on the Inwood Dolomite Project
provided resource estimates for three zones of high-
purity magnesium dolomite in the Fisher Branch
Formation as summarized in the table below:
Resource Grade MgO Grade CaO

Tonnage
Class (wt%) (wt%)
Measured 28,819,000 21.15% 30.91%
PHASE II
Indicated 5,057,000 21.40% 30.66%
Inferred 131,236,000 21.64% 30.51%
The Measured Resource alone would be capable of

sustaining a very substantial production facility of
80,000 tonnes of magnesium per year for about 30
years (subject to a positive feasibility study).
An initial environmental study has been conducted
at the Inwood Property. No endangered species
were identified in the assessment of the natural
environment.
PHASE III
Pr e ciou s M e ta l s
4
copper bird river projec t
29 Palladium /Platinum /Base Metals
Cu The Bird River Project, which covers over 22 kilometres of

the Bird River Sill Complex, is comprised of the Western
63.546
(Ward’s - Coppermine) Extension; four separate blocks of
the Sill – the National Ledin, the Chrome and its Extension,
nickel
28 the Peterson and the Page Blocks; and the Ore Fault Zone.
Ni
This complex carries significant concentrations of palladium
and platinum along with nickel, copper, zinc and chromite.
58.693
The Bird River Property is located about 40 km east of Lac
Du Bonnet, Manitoba and, along the Sill, approximately
zinc 6 km west and northwest of Mustang Minerals’ Maskwa B E L OW : caroline mealin, William mcguint y and
30 Deposit. douglas reeson at bird river project
Zn On March 26, 2007 the Company entered into an option

and joint venture agreement on the Bird River Property with
65.39 Marathon PGM Corporation (Marathon). Under the terms
of the agreement, Marathon triggered the formation of a
platinum
78 joint venture on August 25, 2008, by making $500,000
Pt
in cash payments and having expended in excess of $3
million on the Bird River Project. To date, Marathon
has expended about $4.6 million on the Project which
195.08
includes the acquisition of a 100% interest in the Ore
palladium Fault Property, subject to a 1% net smelter return royalty.
46 Gossan currently holds an approximate 45% interest in
Pd
the joint venture.
106.42

5
Marathon undertook a major drill program at the eastern end of the Project during the winter of 2008 with the goal of
developing a NI 43-101 resource. The program which totaled 38 holes (6,938m) was comprised of 13 holes (2,047m)
at the Page Block; 4 holes (583m) at the Galaxy Zone; and 21 holes (4,308m) at the Ore Fault North Zone.
Based on the results of the Winter 2008 Drill Program and prior drill data, NI 43-101 compliant resource estimates
were completed by independent mining consultants and Qualified Persons, F.H. Brown C.P.G., Pr.Sci.Nat., and
Antoine Yassa, P.Geo. of P&E Mining Consultants Inc., as follows:
Page Block Mineral Resource at US$12.00/tonne NSR Cut-Off

Contained Metals
Base Metals lbs x 1,000,000
Precious Metals ozs x 1,000
Tonnes Ni Cu Zn Ag Au Pt Pd PGM
Category Ni Cu Zn Ag
(x 1,000) (%) (%) (%) (gpt) (gpt) (gpt) (gpt) + Au
Indicated 1,498 0.32 0.13 0.01 0.90 0.02 0.07 0.28 10.6 4.3 0.3 41.0 17.8
Inferred 261 0.27 0.09 0.01 0.80 0.02 0.07 0.25 1.6 0.5 0.0 7.1 2.8
Ore Fault North Zone Mineral Resource at US$12.00/tonne NSR Cut-Off

Contained Metals
Base Metals lbs x 1,000,000
Precious Metals ozs x 1,000
Tonnes Ni Cu Zn Ag Au Pt Pd PGM
Category Ni Cu Zn Ag
(x 1,000) (%) (%) (%) (gpt) (gpt) (gpt) (gpt) + Au
Ni Zone
Indicated 905 0.37 0.24 0.20 8.20 0.02 0.09 0.37 7.4 4.8 4.0 237.9 13.9
Inferred 2,509 0.35 0.19 0.08 7.10 0.01 0.10 0.40 19.6 10.8 4.6 573.6 41.7
Zn and
Cu Zone
Indicated 28 0.04 0.48 1.39 59.10 0.07 0.01 0.06 0.0 0.3 0.9 52.6 0.1
Inferred 341 0.06 0.47 2.02 44.50 0.06 0.01 0.08 0.5 3.5 15.2 487.9 1.66
1. Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral
resources may be materially affected by environmental, permitting, legal, title, taxation, sociopolitical, marketing, or other
relevant issues.
2. The quantity and grade of reported inferred resources in this estimation are uncertain in nature and there has been insufficient
exploration to define these inferred resources as an indicated or measured mineral resource and it is uncertain if further exploration
will result in upgrading them to an indicated or measured mineral resource category.
A Winter 2009 Drill Program was completed with a total of 971m drilled in 7 holes designed to enhance the two
known resources. Two holes (534m) were drilled at the Ore Fault North Zone and five holes (437m) were drilled
at the Page Block. All of these holes are within the current resource pit shell and will add to the existing Ni 43-101
resource base. Highlights of the drill program included a 2.8m intersection of Ni-Cu-PGM mineralization grading
2.66% nickel, 2.10% copper, 15.25 gpt silver and 2.03 gpt PGM + gold in a sulphide lens at the Page Block within
hole MP-09-17 and a 2.5m intersection of Cu-Zn-Ag mineralization grading 2.23% zinc, 0.74% copper and 50.47
gpt silver in a sulphide lens at the Ore Fault Zone within hole MF-09-27.
6
bird river projec t c ont. SHARPE L AKE PROJECT
Palladium /Platinum /Base Metals G old
A Spring 2009 Drill Program was completed on the Cop- Gossan’s Sharpe Lake Properties are located adjacent
permine Zone located at the western end of the Bird River to Rolling Rock Resources’ Monument Bay Project
Project consisting of 6 holes (549m). Lenses of sulphides (formerly held by a Wolfden-Bema Gold Joint-ven-
were intersected in 5 holes along an 800 metre long miner- ture) where a NI 43-101 compliant inferred resource
alized strike length. A single hole at the Coppermine Zone of 6.3 million tonnes grading 5.98 gpt gold for a
was drilled by Canex Placer Ltd in 1973 which contained a total of 1.2 million ounces of contained gold has
12.2m intersection grading 0.24 % nickel, 0.42 % copper, been developed. Gossan’s Properties are comprised
1.02 gpt platinum and 1.19 gpt palladium. of three exploration permits or license applications
Marathon is continuing prospecting at the Page Block and which cover 16,615 hectares (41,055 acres) along a
Ore Fault Zones to follow up on geophysical anomalies. strike length of 40 km, and are located approximately
Reinterpretation of the Page and Ore Fault drill databases 550 km north-east of Winnipeg.
and re-logging of select Ore Fault and Page holes from as Gossan has focused its attention on the Bear Show-
far back as the 1970’s will assist in further refinement of the ing at the west end of Sharpe Lake. The pervasive
model of mineralization. Gossan contributed to the Win- and intense alteration at the Bear Showing is highly
ter and Spring 2010 Programs which continues this work. significant and reflective of major hydrothermal
As of March 31, 2010, Gossan held an approximate 45% fluid migration.
interest in the project.
The Sharpe Lake Property and its Bear Showing is
During fiscal 2009, Gossan received two $50,000 non-refund- the subject of a National Instrument 43-101 Report
able advance net profits or advance NSR royalty payments that has been filed on SEDAR. The Report is a com-
from Marathon which are payable each September and March pilation of the exploration programs that have been
until commercial production is achieved. These amounts are conducted on the property and recommends a drill
carried on the balance sheet as deferred income. program to investigate gold mineralization at the
Bear Showing. Gossan intends to seek a joint ven-
ture partner to undertake the drill program. Work
P L ATINUM & PA L L ADIUM to date has identified co-incident geophysical and
geochemical anomalies. With a minimum strike
are the key elements length of six kilometres and bounded by bifurca-
tions of the Stull Lake-Wunnummin Fault Zone, a
in cataly tic converters major crustal break, the Bear zone is considered a
high priority target for economic gold deposits.
which reduce auto
emmissions of green
house gasses

S p e ci a lt y M e ta l s
7
titanium PIPESTONE L AKE PROJECT engage in further consultation with its partner, the Cross Lake
22 Vanadium / Titanium /Iron First Nation, in regard to the development of the Property.
Ti Our 50% joint venture partner in the Pipestone Lake

Deposit, Cross Lake Mineral Explorations Inc., is a
The Pipestone Lake property is located in north central
Manitoba, approximately 150 km south of Thompson. At
47.867 wholly-owned private corporation of the Cross Pipestone Lake’s Areas 1 and 2, drilling to date has out-
Lake First Nation. It has been involved in protract- lined a non-compliant NI 43-101 indicated resource
vanadium ed negotiations with the Federal and Provincial gov- of 156.8 million tonnes grading 5.56% TiO2, 28.11%
23 ernments to settle the Nelson River Flood Agree- Fe2O3 and 0.22% vanadium pentoxide (Reedman & Asso-
V ment. Development of the Pipestone Lake Deposit

has been stalled pending this settlement. As a result,
ciates 1998). Additional infill drilling could significantly
increase the resource.
50.942 A preliminary mine plan has been prepared for the Pipe-
Gossan decided to offer the 3584-hectare property
for sale. Negotiations for the development or sale stone by J. H. Reedman and Associates which classifies vari-
of this property remain active and are ongoing. ous tonnages according to titanium dioxide cut-off grades,
provides proposed open pits, and estimates stripping ratios;
In October of 2009, the Company retained Hayles
however more detailed drilling is required to support a
Geoscience Surveys Ltd. to conduct a survey of all
30,000 tons per day operation. Additional metallurgi-
of the 149 historic drill hole site locations and the
cal and other studies are required in order to assess the
grid which was originally cut at the Pipestone Lake
economic feasibility of the deposit.
Property in 1994. The purpose of the survey was
to provide the joint venture with an accurate map Vanadium is mostly used in the steel industry as a strength-
on which to base a future NI 43-101 resource calcu- ener. Various nations are mandating stronger rebar in con-
lation. Hayles Geoscience used survey quality GPS struction codes which will likely increase vanadium demand.
instrumentation to record the locations of 8 drill Vanadium may also play an important new role in electrical
holes and a portion of the western end of the grid. storage technology which could substantially increase demand
It is anticipated that the balance of the program for this metal and outstrip supply. In lithium-based auto
will be completed in September of 2010. batteries, the use of a vanadium phosphate cathode ma-
terial can materially increase energy storage and lead to a
On June 11, 2010, Gossan management met with
20%+ increase in an electric car’s travelling range. Another
representatives of the Cross Lake First Nation to
potential large-scale use of vanadium is in grid–scale electri-
discuss and plan an orientation session for the Band
cal storage using re-dox batteries. Vanadium re-dox batteries
Council about mining in general and the Pipestone
could substantially lower utilities’ capital costs as they
Lake Property, specifically. The Company intends to
allow for electrical power to be generated and transmitted
in off-peak hours and then stored for local use the follow-
ing day during peak power requirements. Paints, paper and
plastics are the main uses of titanium dioxide.
va n a diu m may have a new

green role in e-car & grid
storage of electricit y
A B O V E : PIPESTONE LAKE PROJECT AREA

s p e ci a lt y Min e r a l s
8
lithium SEPAR ATION R APIDS PROJECT
3 Lithium / Tantalum
Li The 432-hectare Separation Rapids Specialty Minerals

Project is located 58 km north of Kenora, Ontario in the
6.941 highly prospective English River greenstone belt, which
hosts lithium, tantalum and cesium mineralization. The
Property is situated immediately adjacent to the east of Avalon
Rare Metals Inc.’s Big Whopper property, one of the largest
rare metal pegmatite deposits in the world.
During July 2009, the Company undertook a field program
at the property that included prospecting, line cutting, local
geological mapping of newly-found outcrops, and the col-
lection of 173 soil samples, 28 grab samples and 10 channel
samples. The program identified a 50m to 100m wide zone
with multiple, east-west trending, sub-parallel pegmatite
sill-like bodies that range in width from a few centimetres
to more than 5 metres.
The soil sampling program utilized Soil Gas Hydrocarbon
(SGH) Geochemistry that was analyzed by Activation
Laboratories (Actlabs) of Ancaster, Ontario. SGH is a
A B O V E : MANIGOTAGAN PROPERTY
deep penetrating geochemistry that allows for analysis
from various types of media. Actlabs’ SGH analysis identified a Manigotag an Propert y
silicon
strong Level 5 lithium anomaly below a beat bog approximately Silica 14
Si
100m east of, and along strike of, the most eastern exposures of
At Manigotagan, 170 km northeast of Winnipeg,
the zone of pegmatites.
Gossan continued to develop a silica sand deposit
The demand for lithium is growing strongly due to the use of on the east shore of Lake Winnipeg. The Property 28.086
lithium carbonate in battery-powered vehicles and other is directly across from Black Island where silica sand
electrical storage devices. The highest and best use for was extensively quarried prior to the island becoming
the lithium mineral at Separation Rapids may be as a raw a Provincial Park. On June 3, 2010, an additional lease
material for the glass industry where it would reduce en- was acquired expanding the property to 306 hectares.
ergy requirements and carbon emissions. The demand for
In May of 2008, Gossan conducted a 26-hole sonic
tantalum, the high-tech metal, is growing steadily for use
drill program which identified significant thicknesses
in the manufacture of capacitors that regulate the flow of
of silica sand near surface on the eastern side of the
electricity in cellular phones, pagers, computers and other
Property. This initial program of sonic drilling yield-
electrical appliances. Other applications range from artificial
ed near-perfect 10-foot core sections with excellent
hips to super-alloys for the aeronautics industry to corrosion
recoveries. The quality of this sampling will have
resistant equipment for the chemical and pharmaceutical
important economic implications for assessing the
sectors.
Property.
Drilling to date has been successful in outlining
substantial zones of silica sand with a thickness ex-
ceeding 5 metres and ranging to over 15 metres.
These zones, with lengths known to exceed 400m
and 600m, are both open on one or more sides.

In du s t r i a l Min e r a l s
9
Manigotagan silica sand has potential uses in to specifications of various end uses including proppant frac-
foundries and smelters; in the production of float turing sand, glass, construction, metallurgical flux and other
or container glass; and in the oil & gas industry as markets. The study will provide product price and market size
frac sand. Silica sand from the property has been data along with potential customers and competitors within
subjected to a variety of tests that indicate it is of economically transportable distances for each product type.
a high purity with few contaminants and that it Results from this study may lead to a scoping report provid-
is similar to the silica sands previously quarried ing an initial economic assessment of markets, production
at nearby Black Island. An analysis of 9 washed and logistics.
and scrubbed samples returned a silica content
of 99.0% SiO2. Tests to date indicate that a com-
ponent of these silica sands meet the requirements
for frac sand in oil and gas wells and metallurgical
flux.
Test results of various samples of Manigotagan silica
sand have exceeded all of the minimum standards for
frac sand used by the oil and gas industry. Ongoing
testing for use as frac sand, conducted by PropTester
Inc., has resulted in samples of the 20/40, 30/50
and 70/140 mesh fractions consistently meeting
ISO 8K and 9K Proppant ratings.
Gossan has retained World Industrial Minerals of
Arvada, Colorado, to conduct a marketing study for
its high-purity Manigotagan silica sand. The study
will include a comparison of chemical assay data and
physical specifications from the Manigotagan deposit
in s u r a nce T e ch no l ogy
10
T h e Cl a i m s N e t w o r k
Insurance Technology
The Claims Network Inc. is a service provider to the property

and casualty insurance industry. As the largest shareholder,
Gossan holds a 46.7% equity interest in The Claims Net-
work Inc.(TCN). TCN is a web-based enterprise engaged
in providing the insurance industry with contents loss valu-
ations and on-site claims reporting of losses.
TCN has representatives across Canada that can be dis-
patched to loss sites to take immediate inventories of dam-
aged contents. In terms of its assessment services, the Com-
pany values insurance claims losses using its highly trained
staff and its extensive proprietary data library of product
specifications and price information. TCN has also initiated A BO V E : THE CL AIMS NE T WORK HE AD OFFICE IN WINNIPEG
marketing to insurance companies in the USA.

Gossan originally invested $455,000 in The Claims Net-
work in 2002. Gossan currently accounts for its investment
in TCN using the equity method, resulting in a carrying
value of $363,862 at March 31, 2010. During the 2010
fiscal year, Gossan established a non-cash mark-up of
$139,322 (2009 - $73,620) in its investment to reflect
Gossan’s share of TCN’s profits during the year.

M a n a ge m e n t ’ s R e s p on s ibil i t y L e t t e r
11
Management acknowledges responsibility for the preparation and presentation of the
financial statements, including responsibility for significant accounting judgments
and estimates and the choice of accounting principles and methods that are appropri-
ate to the Company’s circumstances. The financial statements have been prepared in
accordance with Canadian generally accepted accounting principles and necessarily
include amounts based on estimates and judgments of management.
Meyers Norris Penny LLP, our independent auditors, is engaged to express a pro-
fessional opinion on the financial statements. Their examination is conducted in
accordance with Canadian generally accepted auditing standards and includes tests
and other procedures which allow the auditors to report whether the financial state-
ments prepared by management are presented fairly in accordance with Canadian
generally accepted accounting principles.
The Board of Directors must ensure that management fulfils its responsibilities for
financial reporting. In furtherance of the foregoing, the Board of Directors has
appointed an Audit Committee composed of three directors, two of whom are in-
dependent. The Audit Committee meets with the independent auditors to discuss
the results of their audit report prior to submitting the financial statements to the
Board of Directors for its approval. On the recommendation of the Audit Committee,
the Board of Directors has approved the Company’s financial statements.

Douglas Reeson Andrew Thomson
President and C.E.O. Director
A udi t or ’ s R e p or t
12
To the Shareholders of Gossan Resources Limited:
We have audited the balance sheets of Gossan Resources Limited as at March 31, 2010 and 2009 and the
statements of loss and comprehensive loss, statements of changes in shareholders’ equity, and cash flows for
the years then ended. These financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards
require that we plan and perform an audit to obtain reasonable assurance whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall financial statement presentation.
In our opinion, these financial statements present fairly, in all material respects, the financial position of the
Company as at March 31, 2010 and 2009 and the results of its operations for the years then ended in accor-
dance with Canadian generally accepted accounting principles.
Winnipeg, Manitoba
July 21 2010 Chartered Accountants
Comments for U.S. Readers
In the United States, reporting standards for auditors require the addition of an explanatory paragraph following
the opinion paragraph when there are substantial uncertainties about the Company’s ability to continue as a
going concern, as referred to in Note 1 to these financial statements. Our report to the shareholders dated July
21, 2010, is expressed in accordance with Canadian reporting standards, which do not permit a reference to
such matters in the auditors’ report when the facts are adequately disclosed in the financial statements.
Winnipeg, Manitoba
July 21, 2010 Chartered Accountants
2500 - 201 Portage Ave., Winnipeg, Manitoba, R3B 3K6, Phone: (204) 775-4531, 1 (877) 500-0795

B a l a nce S h e e t s
(Expressed in Canadian Dollars)
13
AS AT MARCH 31, 2010 2009
As se t s
Current
Cash $ 496,639 $ 140,692
Short term investments 20,004 1,326,653
Accounts receivable 13,944 4,048
Prepaid expenses 32,765 12,188
563,352 1,483,581
Non-Current
Mineral properties (Note 5) 4,633,552 4,089,541
Investment in The Claims Network (Note 6) 363,862 224,540
Furniture and equipment (Note 7) 8,523 8,973
5,005,937 4,323,054
$ 5,569,289 $ 5,806,635
Liabilities
Current
Accounts payable and accrued liabilities $ 66,064 $ 38,981
Due to related parties (Note 8) 105,999 125,952
172,063 164,933
Deferred income (Note 5) 200,000 100,000
372,063 264,933
Nature of Operations and Going Concern (Note 1)

Committment (Note 15)
Shareholders’ Equit y
Share capital (Note 9) 11,322,864 11,304,778
Contributed surplus (Note 12) 1,227,560 1,204,316
Deficit (7,353,198) (6,967,392)
5,197,226 5,541,702
$ 5,569,289 $ 5,806,635
See accompanying notes to financial statements
Approved on Behalf of the Board:
Douglas Reeson, Director Andrew Thomson, Director

S tat e m e n t s of l o s s a n d co m p r e h e n s i v e l o s s
14
FOR THE YEARS ENDED MARCH 31, 2010 2009
E x penses
Administrative fees $ 27,390 $ 31,778
Management fees 115,649 119,056
Consulting 37,761 31,399
Office and general 97,247 106,306
Public company costs 181,658 114,153
Investor relations 80,710 92,314
Travel and related 25,847 34,809
Stock-based compensation expense (Note 10) 25,130 17,080
Amortization 2,796 7,952
594,188 554,847
Other Inc ome
Interest and other income 471 30,963
Gain on joint venture (Note 5) 70,742 450,000
Los s, before the following (523,029) (73,884)
Share of TCN profit (Note 6) 139,322 73,620

Write-down of mineral properties (2,099) (11,416)
Ne t los s and c omprehensive los s for the ye ar (385,806) (11,680)
ne t los s per share - Basic and diluted (Note 14) $ (0.01) $ 0.00
Weighted average number of shares outstanding $ 29,074,045 $ 29,020,900

S tat e m e n t s of C a s h Fl o w s
15

CASH ( USED IN ) PROVIDED BY:
Operating Ac tivities
Net Loss for the year $ (385,806) $ (11,680)
Amortization 2,796 7,952

Write-down of mineral properties 2,099 11,416
Share of TCN profit (Note 6) (139,322) (73,620)
Stock-based compensation (Note 10) 25,130 17,080
Accrued interests - (4,690)
(495,103) (53,542)
Net change in non-cash working capital:
Accounts receivable (9,896) 5,889
Prepaid expenses (20,577) 14,398
Accounts payable and accrued liabilities 27,083 (31,494)
Due to related parties (19,953) 17,106
(518,446) (47,643)
Investing Ac tivities
Expenditures on mineral properties (546,110) (625,626)
Purchase of short-term investments - (305,437)
Proceeds on redemption of short-term investments 1,306,649 925,000
Acquisition of furniture and equipment (2,346) (778)
Deferred revenue received 100,000 100,000
858,193 93,159
Financing Ac tivities
Issuance of share capital 16,200 -
Incre ase in cash 355,947 45,516
cash, b e ginning of ye ar 140,692 95,176
cash, end of ye ar $ 496,639 $ 140,692

s tat e m e n t s of ch a n ge s in s h a r e ho l de r s ’ e q ui t y
16
SHARE CAPITAL
Balance at beginning of year $ 11,304,778 $ 11,304,778
Exercise of stock options - cash 16,200 -
Exercise of stock options - Black-Scholes valuation 1,886 -
Bal ance at end of ye ar $ 11,322,864 $ 11,304,778
c ontributed surplus
Balance at beginning of year $ 1,204,316 $ 1,187,236
Fair value of stock options granted 25,130 30,239
Fair value of stock options exercised (1,886) -
Fair value of stock options forfeited - (13,159)
Bal ance at end of ye ar $ 1,227,560 $ 1,204,316
deficit
Balance at beginning of year $ (6,967,392) (6,955,712)
Net loss and comprehensive loss for the year (385,806) (11,680)
bal ance at end of ye ar $ (7,353,198) $ (6,967,392)
total shareholders’ equit y, end of ye ar $ 5,197,226 $ 5,541,702

No t e s t o F in a nci a l S tat e m e n t s
17
1. NATURE OF OPER ATIONS AND GOING CONCERN
Gossan Resources Limited (the “Company”) is a public corporation that was incorporated federally on June 16, 1980. The Company,
directly and through joint ventures is in the business of acquiring and exploring resource properties that it believes contain mineral-
ization. To date, the Company has not earned significant revenues and is considered to be in the exploration and development stage.
It is an exploration and development enterprise and carries on business in one segment, being the exploration for valuable minerals,
exclusively in Canada.
In the opinion of management, all adjustments considered necessary for the fair presentation have been included in these financial
statements. All amounts in these financial statements are expressed in Canadian dollars.
These financial statements have been prepared in accordance with Canadian generally accepted accounting principles applicable
to a going concern. Accordingly, they do not give effect to adjustments that would be necessary should the Company be unable to
continue as a going concern and, therefore, be required to realize its assets and liquidate its liabilities and commitments in other than
the normal course of business and at amounts different from those in the accompanying financial statements.
The ability of the Company to continue as a going concern and the recoverability of amounts shown for mineral properties are
dependent upon the discovery of economically recoverable reserves; confirmation of the Company’s ownership in the underlying
mineral claims; the acquisition of required permits to mine; the ability of the Company to obtain necessary financing to complete
exploration and development; and the future profitable production or proceeds from disposition of such properties. These financial
statements do not give effect to adjustments that would be necessary to the carrying values and classification of assets and liabilities
should the Company be unable to continue as a going concern. All of these outcomes are uncertain and taken together cast doubt
over the ability of the Company to continue as a going concern.
As the Company has no revenue producing mines, the Company’s ability to continue as a going concern is dependent upon its ability
to raise funds in the capital markets.
The Company is traded on the TSX Venture Exchange under the symbol “GSS” and on the Frankfurt/Freiverkehr & Xetra Ex-
changes under the symbol “GSR”.
2. SIGNIFICANT ACCOUNTING POLICIES

These financial statements have been prepared in accordance with Canadian generally accepted accounting principles and
include the following significant accounting policies:
(a) Mineral Properties

Costs of acquisition and maintenance of interests of non-producing mineral properties together with direct exploration and
development expenditures less related recoveries, partial sales and option payments received are deferred in the accounts. At
such time as the Company loses or abandons title or its interest in any property, the accumulated expenditures on such prop-
erty are charged to income in that year. If any property reaches commercial production, the applicable deferred expenditures
will be amortized against related production revenues on a unit of production basis.
The amounts shown for mineral properties represent costs incurred to date and do not necessarily represent present or
future values. Periodically, and at least annually, a determination is made as to the status of each property by completing
an impairment test of undiscounted cash flows and assessing the net recoverable amount. When discounted cash flows
cannot be determined to assess the impairment, the property will be written down to its estimated fair value. Where a
property shows no promise from prior exploration results and is dormant, the claims may be allowed to lapse. Claims will
be written off or written down to a nominal value where an interest in the claims remains.
(b) Furniture and Equipment
Furniture and equipment are stated at cost less accumulated amortization. Amortization is recorded on the declining balance
basis at rates designed to amortize the cost of the furniture and equipment over their estimated useful lives, based on the fol-
lowing annual rates:
Computer equipment 30%
Computer software 100%
Field equipment 20%
Furniture and fixtures 20%
18
(c) Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management
to make estimates and assumptions that affect the amounts reported in the financial statements and related notes. Accounts
receivable are stated after evaluation as to their collectibility and an appropriate allowance for doubtful accounts is provided
where necessary. Amortization is based on the estimated useful lives of the furniture and equipment. Other significant areas
requiring the use of estimates include the determination of impairment of mineral properties, and the valuation of stock-
based awards. Although these estimates are based on management’s best knowledge of current events and actions that
the Company may undertake in the future, actual results could differ from the estimates. These estimates are reviewed
periodically, and at least annually, and as adjustments become necessary, they are reported in earnings in the period in
which they become known.
(d) Investment in The Claims Network Inc. (TCN)
The Company accounts for its long-term investment in The Claims Network Inc. using the equity accounting method to the
extent that the Company has significant influence over the investee’s strategic operating, financing and investing policies.
Under the equity method, the Company’s proportionate share of income or loss is included in the statement of loss and any
dividends received are recorded as a reduction to the investment. The carrying value of the investment is periodically reviewed
to ensure that there is no permanent impairment.
(e) Stock-based Compensation and Other Stock-based Payments
All stock-based awards made to employees and non-employees are measured and recognized using a fair value based method.
The Company uses the Black-Scholes method of calculating stock-based compensation. The Company measures stock-based
compensation on the date of the grant and recognizes this cost over the vesting period, if any, in the results from operations,
with an offsetting credit to contributed surplus. When stock options are exercised the consideration paid together with the
amount previously recognized in contributed surplus is recorded as share capital.
(f) Basic and Diluted Loss per Share
Basic loss per share is calculated using the weighted average number of shares outstanding during the respective fiscal
years. Diluted earnings per share reflect the potential dilution that could occur if potentially dilutive securities were ex-
ercised or converted to common shares. The dilutive effect of options and warrants and their equivalent is computed by
application of the treasury stock method. Fully diluted amounts are not presented when the effect of the computations are
anti-dilutive due to the losses incurred. Accordingly, in such circumstances, there is no difference in the amounts presented
for basic and diluted loss per share.
(g) Income Taxes
The Company accounts for income taxes using the asset and liability method. Under this method, future income tax assets and
liabilities are determined based on the differences between the carrying amount of the assets and the liabilities on the balance
sheet and their corresponding tax values. Future income tax assets and liabilities are measured using the substantively enacted
tax rates expected to be in effect when the temporary differences are likely to reverse. The amount of future income tax assets
recognized is limited to the amount that is, in management’s estimation, more likely than not to be realized.
(h) Impairment of Long-lived Assets
The Company periodically assesses the impairment of long-lived assets, which consist primarily of mineral properties, and
furniture and equipment, whenever events or changes in circumstances indicate that the carrying value of an asset may
not be recoverable. If changes in circumstances indicate that the carrying amount of an asset that an entity expects to hold
and use may not be recoverable, future cash flows expected to result from the use of the asset and its disposition must be
estimated. If the undiscounted value of the future cash flows is less than the carrying amount of the asset, impairment
is recognized. When discounted cash flows can not be determined to assess the impairment, the property will be written
down to its estimated fair value.
(i) Asset Retirement Obligations
The fair value of a liability or an asset retirement obligation is recognized in the period in which it is incurred if a reason-
able estimate of fair value can be made. The estimate excludes the residual value of the related assets. The associated retire-
ment costs are capitalized as part of the carrying amount of the long lived assets and amortized over the life of the asset.
The amount of liability is subject to re-measurement at each reporting period.
At the present time, the Company has concluded that there are no asset retirement obligations associated with any of the
properties.

19
(j) Government Assistance
The Company periodically applies for financial assistance under available government incentive programs. All government
assistance received is reflected as a reduction to the related asset category.
(k) Revenue Recognition

The Company recognizes interest income on its cash and cash equivalents on an accrual basis at the stated rates over the
term to maturity. Revenue from investments is recognized when it is sold and it is deemed collectible.
(l) Flow-through Shares
The resource expenditure deductions for income tax purposes related to exploratory and development activities funded
by flow-through share arrangements are renounced to investors in accordance with tax legislation. Under the asset and
liability method of accounting for income taxes, the future income taxes related to the temporary difference arising from
the renunciation are recorded at the time the renunciation documents are filed with the government agency, as a future tax
liability and a corresponding reduction to the carrying value of the shares issued.
(m) Joint Ventures
The Company’s exploration and development activities may be conducted jointly with others. Under joint venture ac-
counting, the Company is required to proportionately consolidate its percentage ownership of the assets, liabilities, rev-
enues, expenses, and cashflows of its joint venture. These financial statements reflect only the Company’s proportionate
interest in the Bird River and Pipestone Lake joint ventures.
(n) Financial Instruments
The Company has, for accounting purposes, designated its cash and short-term investments as held-for-trading, which
are measured at fair value. Accounts receivable are classified as loans and receivables, which are measured at amortized
cost. Accounts payable and accrued liabilities and due to related parties are classified as other financial liabilities which are
measured at amortized cost.
All derivative instruments, including embedded derivatives, are recorded in the balance sheet and statement of loss at fair
value unless exempted from derivative treatment as a normal purchase and sale. All changes in their fair value are recorded
in operations.
Transaction costs related to held-for-trading financial assets are expensed as incurred. Transaction costs related to loans
and receivables and other financial liabilities are netted against the carrying value of the asset or liability and amortized
over the expected life of the instrument using the effective interest rate method.
Comprehensive income (loss) includes unrealized gains and losses, such as: changes in the currency translation adjustment
relating to self-sustaining foreign operations; unrealized gains or losses on available-for-sale investments; and the effective
portion of gains or losses on derivatives designated as cash flow hedges or hedges of the net investment in self-sustaining
foreign operations.
(o) Short-term Investments
Short-term investments are comprised of guaranteed investment certificates and term deposits with initial terms to matu-
rity of over ninety days but less than one year.
(p) Changes in Accounting Policies
Goodwill and Intangible Assets
Effective April 1, 2009, the Company adopted CICA Section 3064, “Goodwill and Intangible Assets” which replaces
CICA Sections 3062, “Goodwill and Other Intangible Assets” and 3450 “Research and Development Costs”, as well as
EIC-27, “Revenues and Expenditures During the Pre-operating Period”, and part of Accounting Guideline 11, “Enterprises
in the development stage”. The provisions relating to the definition and initial recognition of intangible assets under these
new standards reduce the differences with International Financial Reporting Standards (“IFRS”) in the accounting for
intangible assets. The objectives of CICA 3064 are: 1) to reinforce the principle-based approach to the recognition of as-
sets; 2) to establish the criteria for asset recognition; and 3) to clarify the application of the concept of matching revenues
and expenses such that the current practice of recognizing items that do not meet the recognition criteria is eliminated.
The standard also provides guidance for the recognition of internally developed intangible assets (including research and
development activities), ensuring consistent treatment of all intangible assets. The portions in the standard relating to
goodwill remain unchanged. The adoption of this standard had no impact on the Company’s presentation of its financial
position or results of operations as at March 31, 2010.
20
Fair Value Hierarchy and Liquidity Risk Disclosure
In June 2009, the CICA issued an amendment to Handbook Section 3862 to provide improvements to fair value and
liquidity risk disclosures. The amendment applies to the Company’s fiscal year ending March 31, 2010. This adoption
resulted in additional disclosure as provided below.
The following summarizes the methods and assumptions used in estimating the fair value of the Company’s financial
instruments where measurement is required. The fair value of cash and short-term financial instruments approximates
their carrying amounts due to the relatively short period to maturity. Fair value amounts represent point-in-time estimates
and may not reflect fair value in the future. The measurements are subjective in nature, involve uncertainties and are a
matter of significant judgment. The methods and assumptions used to develop fair value measurements, for those financial
instruments where fair value is recognized in the balance sheet, have been prioritized into three levels as per the fair value
hierarchy included in GAAP.
Level one includes quoted prices (unadjusted) in active markets for identical assets or liabilities. Level two includes inputs that are ob-
servable other than quoted prices included in level one. Level three includes inputs that are not based on observable market data.
Level 1 Level 2 Level 3
Cash $ 496,639 $ - $ -
Short-term Investments $ 20,004 $ - $ -
(q) Future Accounting Changes

International Financial Reporting Standards (“IFRS”)
In January 2006, AcSB formally adopted the strategy of replacing Canadian GAAP with IFRS for Canadian enterprises
with public accountability. The current conversion timetable calls for financial reporting under IFRS for accounting pe-
riods commencing on or after January 1, 2011. On February 13, 2008 the AcSB confirmed that the use of IFRS will be
required in 2011 for publicly accountable profit-oriented enterprises. For these entities, IFRS will be required for interim
and annual financial statements relating to fiscal years beginning on or after January 1, 2011. The Company is currently
assessing the impact of IFRS on its financial statements.
Business Combinations, Consolidated Financial Statements and Non-Controlling Interests
The CICA issued three new accounting standards in January 2009: Section 1582, “Business Combinations” (“Section
1582”), Section 1601, “Consolidated Financial Statements” (“Section 1601”) and Section 1602, “Non-Controlling inter-
ests” (“Section 1602”). These new standards will be effective for fiscal years beginning on or after January 1, 2011. The
Company is in the process of evaluating the requirements of the new standards.
Section 1582 replaces section 1581 and establishes standards for the accounting for a business combination. It provides
the Canadian equivalent to International Financial Reporting Standards IFRS 3 - “Business Combinations”. The sec-
tion applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first
annual reporting period beginning on or after January 1, 2011. Sections 1601 and 1602 together replace section 1600,
“Consolidated Financial Statements”. Section 1601, establishes standards for the preparation of consolidated financial
statements. Section 1601 applies to interim and annual consolidated financial statements relating to fiscal years beginning
on or after January 1, 2011. Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary
in consolidated financial statements subsequent to a business combination. It is equivalent to the corresponding provisions
of International Financial Reporting Standard lAS 27 - “Consolidated and Separate Financial Statements” and applies to
interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011.
3. CAPITAL MANAGEMENT
The Company considers its capital structure to consist of share capital, stock options and warrants. When managing capital,
the Company’s objective is to ensure the entity continues as a going concern as well as to maintain optimal returns to share-
holders and benefits for other stakeholders. Management adjusts the capital structure as necessary in order to support the
acquisition, exploration and development of mineral properties. The Board of Directors does not establish quantitative return
on capital criteria for management, but rather relies on the expertise of the Company’s management to sustain future develop-
ment of the business. As at March 31, 2010, total shareholders’ equity was $5,197,226 (March 31, 2009 - $5,541,702).
The properties in which the Company currently has an interest are in the exploration stage. As such the Company is dependent
on external financing to fund its activities. In order to carry out the planned exploration and pay for administrative costs,

21
the Company will spend its existing working capital and raise additional amounts as needed. The Company will continue to
assess new properties and seek to acquire an interest in additional properties if it feels there is sufficient geologic or economic
potential and if it has adequate financial resources to do so.
Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative
size of the Company, is reasonable.
There were no changes in the Company’s approach to capital management during the year ended March 31, 2010. The Com-
pany is not subject to externally imposed capital requirements.
4. Mineral propert y and financial risk fac tors

(a) Mineral Property Risk
The Company’s major mineral properties are listed in Note 5. Unless the Company acquires or develops additional mate-
rial mineral properties, the Company will be mainly dependent upon its existing properties. If no additional major min-
eral properties are acquired by the Company, any adverse development affecting the Company’s properties would have a
materially adverse effect on the Company’s financial condition and results of operations.
(b) Financial Risk
The Company’s activities expose it to a variety of financial risks: credit risk, liquidity risk, market risk (including interest
rate, foreign exchange rate and commodity price risk).
Risk management is carried out by the Company’s management team with guidance from the Audit Committee under policies
approved by the Board of Directors. The Board of Directors also provides regular guidance for overall risk management.
Credit Risk
Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The Company’s
credit risk is primarily attributable to cash, short term investments and accounts receivable. Cash and short term invest-
ments consist of cash and term deposits with reputable financial institutions, from which management believes the risk of
loss to be minimal.
Financial instruments included in accounts receivable consist of deposits held with service providers. Management believes
that credit risk concentration with respect to financial instruments included in accounts receivable is minimal. Other ac-
counts receivable consist of sales tax receivable from government authorities in Canada.
Liquidity Risk
The Company’s approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when
due. As at March 31, 2010, the Company had cash of $496,639 (2009 - $140,692) and short-term investments of $20,004
(2009 - $1,326,653) to settle current liabilities of $172,063 (2009 - $164,933). All of the Company’s financial liabilities
have contractual maturities of less than 30 days and are subject to normal trade terms.
Market Risk
Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign exchange rates, and
commodity prices.
Interest Rate Risk
The Company has cash balances and no interest-bearing debt. The Company’s current policy is to invest excess cash in
investment-grade short-term deposit certificates issued by its banking institutions. The Company regularly monitors the
investments it makes and is satisfied with the credit ratings of its banks.
Foreign Currency Risk
The Company’s functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars. As a
result, the Company’s exposure to foreign currency risk is minimal.
Commodity Price Risk

The Company is exposed to price risk with respect to commodity prices. Commodity price risk is defined as the potential
adverse impact on earnings and economic value due to commodity price movements and volatilities. The Company closely
monitors commodity prices as it relates to valuable minerals to determine the appropriate course of action to be taken by
the Company.
22
(c) Sensitivity Analysis
The Company has, for accounting purposes, designated its cash and short-term investments as held-for-trading, which are
measured at fair value. Accounts receivable are classified as loans and receivables, which are measured at amortized cost.
Accounts payable and accrued liabilities, and due to related parties are classified as other financial liabilities which are
measured at amortized cost.
As at March 31, 2010, the carrying and fair value amounts of the Company’s financial instruments are not materially different.
Based on management’s knowledge and experience of the financial markets, the Company believes the following move-
ments are “reasonably possible” over a twelve month period.
i) Held-for-trading assets include investment certificates totaling $20,004 subject to varying interest rates. Sensitivity to a plus
or minus 1% change in rates would affect the reported net income by approximately $200. Similarly, as at March 31, 2010,
reported shareholders’ equity would have varied by approximately $200 as a result of the 1% variance in interest rates.
ii) The Company does not hold balances in foreign currencies to give rise to exposure to foreign exchange risk.
iii) Commodity price risk could adversely affect the Company. In particular, the Company’s future profitability and vi-
ability from mineral exploration depends upon the world market price of valuable minerals. Commodity prices have
fluctuated significantly in recent years. There is no assurance that, even as commercial quantities of minerals may be
produced in the future, a profitable market will exist for them.
As of March 31, 2010, the Company is not a producer of valuable minerals. As a result, commodity price risk may affect
the completion of future equity transactions such as equity offerings and the exercise of stock options and warrants.
This may also affect the Company’s liquidity and its ability to meet its ongoing obligations.
iv) Mineral property risk is significant. In particular, if an economic orebody is not found, the Company cannot enter into
commercial production and generate sufficient revenues to fund its continuing operations. There can be no assurance
that the Company will generate any revenues or achieve profitability or provide a return on investment in the future
from any of the properties it may have an interest in.
5. mineral properties
March 31, 2009 Expenditures Option & Grant Payments Write Downs March 31, 2010
Pipestone Lake (i) $ 1,668,030 $ 21,941 $ - $ - $ 1,689,971
Bird River Joint Venture (ii) 629,251 223,792 (39,732) (2,098) 811,213
Inwood (iii) 563,633 182,703 - 746,336
Separation Rapids 135,667 56,509 - 192,176
Manigotagan Silica (iv) 618,747 100,481 - 719,228
Sharpe Lake (v) 474,210 3,598 (3,182) 474,626
Other 3 - - (1) 2
$ 4,089,541 $ 589,024 $ (42,914) $ (2,099) $ 4,633,552
March 31, 2008 Expenditures Option & Grant Payments Write Downs March 31, 2009
Pipestone Lake (i) $ 1,663,030 $ 5,000 $ - $ - $ 1,668,030
Bird River (ii) 477,446 2,164 - (479,610) -
Bird River Joint Venture (ii) - 149,641 - 479,610 629,251
Inwood (iii) 444,048 145,001 (14,000) (11,416) 563,633
Separation Rapids 128,834 6,833 - - 135,667
Manigotagan Silica (iv) 293,849 340,281 (15,383) - 618,747
Sharpe Lake 468,121 6,089 - - 474,210
Other 3 - - - 3
$ 3,475,331 $ 655,009 $ (29,383) $ (11,416) $ 4,089,541

23
During the 2010 fiscal year, the Company incurred $589,024 (2009 - $655,009) of exploration expenditures and also received
$42,914 (2009 - $29,383) in government grants, which reduced the carrying value of its Mineral Properties by the same
amount.
i) The Pipestone Lake project is a 50% joint venture with Cross Lake Mineral Explorations Inc.
ii) On March 26, 2007, the Company entered into an Option and Joint Venture Agreement on its Bird River Property (“The
Property”) with Marathon PGM Corporation (MAR-TSX). The Property, encompassing over 7,000 hectares, covers over
21 kilometres of the Bird River Sill Complex. This complex carries significant concentrations of palladium and platinum
along with nickel, copper, zinc and chromite. The Property is located about 40-km east of Lac Du Bonnet, Manitoba and,
along the Sill, approximately 6-km west and northwest of Mustang Minerals’ Maskwa Deposit and the historic Dumbar-
ton mine.
Under the terms of the Agreement, Marathon PGM Corporation (“Marathon”) earned an undivided 50% interest in
the Bird River Project (“Project”) by spending $3.0 million on exploration and acquisition costs and cash payments of
$500,000 to the Company. Thereafter, Marathon elected not to earn a further 15% interest by completing a bankable
feasibility study and an additional 5% interest, to a total 70% interest, by arranging project financing. Under certain
conditions and subject to regulatory approval, Marathon may elect to issue its common shares in lieu of cash payments.
Upon formation of a joint venture, Marathon must also make semi-annual, recoverable, advance payments of $50,000
until commercial production is achieved. A $10,000 finders fee was paid in connection with the transaction.
On November 1, 2007, Marathon finalized an Option and Joint Venture Agreement on the adjacent Ore Fault Property
held by Bird River Inc. to explore and potentially acquire the property, subject to a 1% NSR. The Ore Fault Property is
part and subject to the Company and Marathon Agreement.
On August 25, 2008, Marathon triggered the formation of a joint venture by making the final $400,000 cash payment to
the Company (the remaining portion of the $500,000 trigger payment) and having expended in excess of $3 million on the
Bird River Project. At the March 31, 2010 year end, the Company owns an approximate 45% interest in the project and it
has contributed $262,959 to the joint venture’s work programs. If the Company fails to contribute to three successive work
programs, or is diluted to a ten percent equity interest in the Project, the Company’s interest will be reduced to a 3% net
smelter return royalty. On each March 30th and September 30th, from August 25, 2008 to the date of Commencement
of Commercial Production, Marathon is required to make advance payments of a net profits interest or an NSR royalty to
the Company in the amount of $50,000 as long as Marathon remains the manager of the Project.
As a result of the formation of the joint venture, a gain in the amount of $450,000 was recorded in 2009 to reflect cash
payments made directly from Marathon to the Company as stated in the joint venture agreement. Additionally, two of
the semi-annual $50,000 advance payments received in the 2009 and two of the semi-annual $50,000 advance payments
received in 2010 are currently shown as deferred income. Additionally, the percentage ownership of the joint venture is
subject to change based on its contributions to the joint venture’s work program.
iii) On March 15, 2007, the Company entered into a licensing arrangement for a new magnesium production process (“the
Zuliani Process”), including an option to secure exclusive worldwide rights to the Zuliani Process. A component of the
consideration is the conditional payment of up to 150,000 common shares related to specific measurable events. On No-
vember 12, 2007, 100,000 common shares were issued with an assigned fair value of $21,000 related to the completion of
Phase I of the arrangement. In fiscal 2009, an industrial research grant was received from the Government of Manitoba in
the amount of $14,000 for work undertaken on the Zuliani Process.
iv) In fiscal 2009, the Company received a mineral exploration grant from the Government of Manitoba in the amount of
$15,383 for prior work undertaken on the Manigotagan Silica Project.
v) During the current year, the Company received a mineral exploration grant from the Government in the amount of $3,182
(2009 - $nil) for prior work undertaken on the Sharpe Lake Project
6. investment in the cl aims ne t work inc.

The Claims Network Inc. (TCN) provides the property and casualty insurance industry with valuation information and
software systems to facilitate the settlement of insurance claims. In 2002, the Company invested $455,000 in TCN to hold
a 30% equity interest and has appointed two directors. During the 2007 year, TCN redeemed outstanding shares resulting
24
6. investment in the cl aims ne t work inc. c ontinued…
in the Company’s interest increasing to 37.04%. During the 2008 year, TCN redeemed additional shares and made a small
share issuance resulting in the Company’s interest increasing to 46.71%. As TCN is a private company, there is no liquid
market for the shares.
During the current year, management has recorded its investment in TCN using the equity method and accordingly has rec-
ognized $139,322 (2009 - $73,620) as income being the Company’s 46.71% proportionate share of TCN’s profit, resulting in
the carrying value increasing by $139,322 to $363,862 (2009 - $224,540).
7. furniture and equipment

Accumulated Total March 31, Total March 31,
Cost
Amortization 2010 2009
Computer equipment $ 19,599 $ 13,060 $ 6,539 $ 6,493
Computer software 7,435 7,435 - -
Field equipment 1,155 893 262 327
Furniture and fixtures 5,327 3,605 1,722 2,153
$ 33,516 $ 24,993 $ 8,523 $ 8,973
8. REL ATED PARTY TR ANSACTIONS

During the year ended March 31, 2010, a director was paid $43,381 (2009 - $53,578) for geological field work and is owed
$2,888 (2009 - $4,882) by the Company as at March 31, 2010. Another director and the President was paid $72,000 (2009 -
$82,000) for corporate administration services, and is owed $17,143 (2009 - $24,490) by the Company as at March 31, 2010.
Another officer charged $30,000 (2009 - $30,000) for management services, and is owed $10,918 (2009 - $10,000) by the
Company as at March 31, 2010. An officer was paid $2,000 (2009 - $3,500) for corporate administration services.
During the year, the Company paid $12,000 (2009 - $2,000) to a company, beneficially owned by the CFO, to act as Chief
Financial Officer of the Company. The CFO is also the president of a firm providing accounting services to the Company.
During the year, the Company expensed $28,390 (2009 - $29,092) for accounting services rendered by this firm. In addition,
as at March 31, 2010, this firm was owed $8,750 (2009 - $10,080) and this amount was included in due to related parties.
During fiscal 2010, fees were paid/accrued to Directors in the amount of $51,000 (2009 – $51,000) for directors’ fees, includ-
ing committee fees and other board activities. In the current and prior years, thirty percent of the fees paid to directors were
retained by the Company for acquisition of the Company’s common shares on the directors’ behalf. At March 31, 2010, $66,300
(2009 - $76,500) was owed in regard to these fees.
These transactions are in the normal course of business and are measured at the exchange amount which is the amount estab-
lished and agreed to by the parties.
The amounts due to related parties, which totals $105,999 (2009 - $125,952) are unsecured, non-interest bearing and have no
fixed terms of repayment.
9. SHARE CAPITAL
(a) AUTHORIZED Unlimited number of common shares with no par value
(b) ISSUED
Shares Amount
Balance, March 31, 2009 and 2008 29,020,900 11,304,778
Exercise of options - cash 97,000 16,200
Exercise of options - Black-Scholes valuation - 1,886
Balance, March 31, 2010 29,117,900 $ 11,322,864

25
10. STOCK OPTIONS
A summary of changes in stock options as follows:
Number of Stock Options Weighted Average Exercise Price
Balance, March 31, 2008 2,579,000 $ 0.38
Granted (i)(ii) 410,000 $ 0.18
Exercised (61,000) $ 0.44
Expired (407,000) $ 0.34
Balance, March 31, 2009 2,521,000 $ 0.35
Granted (iii)(iv) 526,000 $ 0.15
Exercised (97,000) $ 0.17
Expired (490,000) $ 0.41
Balance, March 31, 2010 2,460,000 $ 0.30
i) On July 16, 2008, the Company granted 270,000 stock options to directors and consultants. The options are exercisable
at $0.20 and expire on March 28, 2013. The resulting fair value of $24,030 was estimated using the Black-Scholes option
pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 85.0%; a risk-free in-
terest rate of 3.0% and an expected average life of 3.0 years. Of the 270,000 options granted, 150,000 are subject to vesting
terms ranging from six to twelve months. For the year ended March 31, 2009, the impact on expenses was $22,918.
ii) On February 4, 2009, the Company granted 140,000 stock options to directors and an officer. The options vest immedi-
ately, are exercisable at $0.15, and expire on March 28, 2011. The resulting fair value of $6,580 was estimated using the
Black-Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of
85.0%; a risk-free interest rate of 2.00% and an expected average life of 1.7 years.
iii) On June 12, 2009, the Company granted 86,000 incentive stock options to directors. The options vest immediately, are
exercisable at $0.15 per share, and expire on June 28, 2009. The resulting fair value of $258 was estimated using the Black-
Scholes option pricing model with the following assumptions: expected dividend yield of 0%; expected volatility of 85%; a
risk-free interest rate of 0.50% and an expected average life of 16 days. These options relate to a thirty percent retention of
directors fees by the Company for reinvestment purposes which remained payable from the 2008 fiscal year.
iv) On June 12, 2009, the Company granted 440,000 incentive stock options to directors, officers and consultants. The op-
tions vest immediately, are exercisable at $0.15 per share, and expire on March 28, 2012. The resulting fair value of $23,760
was estimated using the Black-Scholes option pricing model with the following assumptions: expected dividend yield of
0%; expected volatility of 85%; a riskfree interest rate of 2.00% and an expected average life of 1.9 years.
The following table reflects the stock options outstanding as at March 31, 2010.
Date of Grant Exercise Price ($) Options Outstanding Expiry Date

October 31, 2006 0.30 330,000 April 30, 2010
March 14, 2007 0.32 190,000 September 14, 2010
May 1, 2007 0.40 340,000 May 1, 2011
June 26, 2007 0.50 350,000 June 26, 2011
September 27, 2007 0.34 270,000 September 27, 2011
March 28, 2008 0.30 160,000 March 28, 2012
July 16, 2008 0.20 240,000 March 28, 2013
February 4, 2008 0.15 140,000 March 28, 2011
June 12, 2009 0.15 440,000 March 28, 2012
0.30 2,460,000
Of the options outstanding 2,460,000 (2009 - 2,471,000) are exercisable

26
11. WARR ANTS
The following table reflects the continuity of warrants for the year:
Number of Warrants Weighted Average Exercise Price
Balance, March 31, 2008 5,942,900 $ 0.50
Expired (5,942,900) $ 0.50
Balance, March 31, 2009 and 2010 - $ -
12. CONTRIBUTED SURPLUS
Balance - March 31, 2008 $ 1,187,236

Fair value of stock options granted 30,239
Fair value of stock options forfeited (13,159)
Balance - March 31, 2009 $ 1,204,316
Fair value of stock options granted 25,130

Fair value of stock options forfeited (1,886)
Balance - March 31, 2010 $ 1,227,560
13. BASIC AND DILUTED LOSS PER SHARE

Basic loss per share is computed using the weighted average number of common shares outstanding during the year. Diluted loss
per share, which reflects the maximum possible dilution from the potential exercise of warrants and stock options, is the same as
basic loss per share for the year ended. The conversion of warrants and stock options to calculate diluted loss per share was not done,
because the conversion was anti-dilutive.
14. INCOME TA XES

The following table reconciles the expected income tax recovery at the statutory income tax rate to the amounts recog-
nized in the statements of operations.
2010 2009
Loss before income taxes as reflected in the statement of operation $ (385,806) $ (11,680)
Expected income tax recovery at statutory rate (120,082) (3,676)
Permanent difference due to stock-based compensation 7,822 5,375
Non-taxable portion of capital gains 46,005 -
Permanent difference due to equity income (43,364) (23,168)
Other temporary differences not recognized in year 24,232 24,238
Change in valuation allowance (45,114) (278, 672)
Capital gain from expiration of warrants - 55,760
Change in prior year estimate 130,501 220,143
Actual income taxes $ - $ -

27
The following table reflects the future income tax assets (liabilities):
2010 2009
Future income tax asset (liability)
Non-capital loss carry-forwards for Canadian purposes $ 768,674 $ 801,912
Excess of undepreciated capital cost over net book value of furniture

and equipment 9,617 8,862
Share issue costs 17,300 30,498
Excess of book value of Mineral Properties over tax value (522,195) (522,762)
273,396 318,510
Less: Valuation allowance (273,396) (318,510)
$ - $ -
The valuation allowance reflects the Company’s estimate that the tax assets will likely not be realized and consequently they
have not been recorded in these financial statements.
As at March 31, 2010, the following amounts are available to be applied against future years’ income for tax purposes.
Canadian earned depletion base $ 128,459

Canadian exploration expenditures 1,987,105
Foreign exploration and development expense 583,931
Share issue costs 64,074
Non-capital losses (expiring 2014 to 2030) 2014 390,923
2015 383,862
2026 491,126
2027 511,190
2028 625,853
2030 443,986
$ 5,610,509
15. COMMITMENT
By agreement dated June 14, 2007, the Company is committed under an operation lease for its office premises with the follow-
ing lease payments to the expiration of the lease on September 30, 2012:

2011 12,848
2012 12,848
2013 6,424
$ 32,120
16. COMPAR ATIVE FIGURES

Certain comparative figures have been reclassified to conform with current year presentation.
28
17. DIFFE R ENCES BETWEEN C A N A DI A N A ND U. S . GENE R A LLY A CCEPTED
A CCOUNTING P R INCIPLES A ND P R A CTICES
The financial statements have been prepared in accordance with accounting principles and practices generally accepted in
Canada (Canadian generally accepted accounting principles GAAP) which differ in certain respects from those principles and
practices that the Company would have followed had its financial statements been prepared in accordance with principles and
practices generally accepted in the United States of America (U.S. generally accepted accounting principles GAAP).
Under U.S. generally accepted accounting principles, the accounting treatment would differ as follows:
Before April 1, 2007, under Canadian GAAP, the Company recorded its investments using the lower of cost or market meth-
od. In addition, if there was a loss other than temporary, the investment was written down to recognize the loss. However,
under U.S. GAAP, marketable equity securities that are available‑for‑sale are recognized at market value with any unrealized
gains or losses recognized in other comprehensive income, except if there is a loss other than temporary, which is directly
recognized as a loss.
Under Canadian income tax legislation, the Company is permitted to issue shares whereby the Company agrees to incur
Canadian Exploration Expenditures (as defined in the Canadian Income Tax Act) and renounce the related income tax deduc-
tions to the investors. Under Canadian GAAP, the full amount of funds received from flow‑through share issuances are re-
corded as share capital. Under U.S. GAAP, the premium paid for the flow‑through shares in excess of market value is credited
to liabilities and included in income when the related tax benefits are renounced by the Company.
Under U.S. GAAP the statements of operations and cash flow would disclose cumulative amounts since inception.
Furthermore, under U.S. GAAP, and notwithstanding that there is not a specific requirement to segregate the funds pursuant
to the flow‑through agreements, the flow through funds which are unexpended at the balance sheet date are separately clas-
sified as restricted cash.
As at March 31, 2010 there were no unexpended flow‑through funds (2009 ‑ $Nil).
Under U.S. GAAP, exploration costs are expensed as incurred. As a result, under U.S. generally accepted accounting principles,
there is a greater expense in earlier periods and fewer write‑downs in subsequent periods than under Canadian generally ac-
cepted accounting principles.
Under U.S. GAAP, unvested options forfeited, and previously recognised as an expense, can not be reversed.
Had the Company followed U.S. generally accepted accounting principles in accounting for the exploration costs, the effect
on the financial statements would have been as follows:
Statements of loss and comprehensive loss 2010 2009
Net loss under Canadian GAAP $ (385,806) $ (11,680)

Fair value of marketable securities under U.S. GAAP - -
Write-down of mineral properties under Canadian GAAP 2,099 11,416
Expensing of acquisition and exploration costs under U.S. GAAP (546,110) (625,626)
Net loss under U.S. GAAP $ (929,817) $ (625,890)
Basic and diluted net loss per common share under U.S. GAAP $ (0.03) $ (0.02)

29
Balance Sheets 2010 2009
(a) Effect on mineral properties

Mineral properties under Canadian GAAP $ 4,633,552 $ 4,089,541
Adjustment for capitalization of exploration costs
Current year differences (544,011) (4,089,541)
Prior year accumulated differences (4,089,541) -
Mineral properties under U.S. GAAP $ - $ -
(b) Effect on marketable securities $ - $ -

Adjustment for fair value - -
Marketable securities under U.S. GAAP $ - $ -
(c) Effect on shareholders‘ equity

Shareholders‘ equity under Canadian GAAP $ 5,197,226 $ 5,541,702
Current year difference (544,011) (4,089,541)
Prior year accumulated differences (4,089,541) -
Shareholders‘ equity under U.S. GAAP $ 563,674 $ 1,452,161
Also, the impact on the statement of cash flows would be as follows:

As a result of the treatment of mining interests under item (a) above, cash expended for the exploration costs would have been
classified under U.S. GAAP as an operating activity rather than an investing activity.
Also, U.S. GAAP requires disclosure of combined financial information with regard to the equity investment in The Claims
Network Inc. The combined information is as follows:
2010 2009
Cash $ 903,561 $ 390,323

Short term investments 20,004 1,326,653
Marketable securities - -
Prepaid expenses 37,415 17,625
Accounts receivable 436,432 279,769
Mining properties 4,633,552 4,089,541
Future income tax 300 300
Fixed assets 30,949 27,633
Accounts payable (294,435) (263,354)
Share capital (11,703,325) (11,685,239)
$ (5,935,547) $ (5,816,749)
Revenue $ 1,967,897 $ 1,259,121

Expenses (2,194,754) (1,186,810)
Loss $ (226,857) $ 72,311

30
A CCOUNTING P R INCIPLES A ND P R A CTICES
Recent US GAAP accounting pronouncements:
In April 2009, FASB amended accounting standards for Fair Value Measurements and Disclosures. The amended standard,
ASC 820, addresses issues related to the determination of fair value when the volume and level of activity for an asset or li-
ability has significantly decreased, and identifying transactions that are not orderly. The revisions affirm the objective that fair
value is the price that would be received to sell an asset in an orderly transaction (that is not a forced liquidation or distressed
sale) between market participants at the measurement date under current market conditions, even if the market is inactive.
The amendment provides additional guidance for estimating fair value when the volume and level of activity for the asset or
liability have decreased significantly. It also provides guidance on identifying circumstances that indicate a transaction is not
orderly. If determined that a quoted price is distressed (not orderly), and thereby not representative of fair value, the entity may
need to make adjustments to the quoted price or utilize an alternative valuation technique (e.g., income approach or multiple
valuation techniques) to determine fair value. Additionally, an entity must incorporate appropriate risk premium adjustments,
reflective of an orderly transaction under current market conditions due to uncertainty in cash flows. The revised guidance
requires disclosures in interim and annual periods regarding the inputs and valuation techniques used to measure fair value
and a discussion of changes in valuation techniques and related inputs, if any, during the period. The changes are effective for
interim and annual reporting periods ending after June 15, 2009, and are to be applied prospectively. The adoption of this new
standard had no impact on the Company’s financial statements.
In April 2009, FASB revised accounting standards for Financial Instruments. The revised standard, ASC 825, requires fair
value disclosures in the notes of an entity’s interim financial statements for all financial instruments, whether or not recognized
in the statement of financial position. This revision became effective for the interim reporting periods ending after June 15,
2009. The adoption of this new standard had no impact on the Company’s financial statements.
In May 2009 FASB issued Statement No. 168, The FASB Accounting Standards Codification and the Hierarchy of Gener-
ally Accepted Accounting Principles”, (“SFAS No. 168”) “‑‑ a replacement of FASB Statement No. 162. SFAS No. 168 is the
new source of authoritative GAAP recognized by the FASB to be applied by nongovernmental entities. Rules and interpretive
releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. This
statement was incorporated into ASC 105, Generally Accepted Accounting Principles under the new FASB codification which
became effective on July 1, 2009. The new Codification supersedes all then‑existing non‑SEC accounting and reporting stan-
dards. All other non‑grandfathered non‑SEC accounting literature not included in the Codification will become non‑authori-
tative. The adoption of this standard did not have any impact on the Company’s financial position or results of operations.
In May 2009, the FASB issued ASC No. 855, “Subsequent Events,” which established general standards of accounting for and
disclosure of events that occur after the balance sheet date but before the financial statements are issued. It sets forth the period
after the balance sheet date during which management of a reporting entity should evaluate events or transactions that occur
for potential recognition or disclosure in the financial statements, the circumstances under which an entity should recognize
events or transactions occurring after the balance sheet date in its financial statements and the disclosures that an entity should
make about events or transactions that occurred after the balance sheet date. ASC 855 was effective for financial statements
issued for interim and annual periods ending after June 15, 2009 and did not have any impact on the Company’s financial
statements. Management has evaluated subsequent events through the date the financial statements were issued.
In June 2009, the Financial Accounting Standards Board (“FASB”) issued new standards for The Hierarchy of Generally
Accepted Accounting Principles. These standards, ASC 105, culminated a multi‑year project to replace the previous GAAP
hierarchy and established Accounting Standard Codification (the “Codification”). The Codification is not expected to change
US GAAP, but combines all authoritative standards into a comprehensive, topically organized online database. Following this
guidance, the FASB will not issue new standards in the form of Statements, FASB Staff Positions or Emerging Issues Task
Force Abstracts. Instead, it will issue Accounting Standards Updates (“ASU”) to update the Codification. After the launch of
the Codification on July 1, 2009, only one level of authoritative US GAAP for non‑governmental entities will exist, other than
guidance issued by the SEC. This statement is effective for interim and annual reporting periods ending after September 15,
2009. The adoption of this new standard only had the effect of amending references to authoritative accounting guidance in
the Company’s financial statements.

31
A CCOUNTING P R INCIPLES A ND P R A CTICES ( c o n t i n u e d )
In June 2009, the ASC guidance for consolidation accounting was updated to require an entity to perform a qualitative analy-
sis to determine whether the enterprise’s variable interest gives it a controlling financial interest in a variable interest entity
(“VIE”). This analysis identifies a primary beneficiary of a VIE as the entity that has both of the following characteristics: i) the
power to direct the activities of a VIE that most significantly impact the entity’s economic performance and ii) the obligation
to absorb losses or receive benefits from the entity that could potentially be significant to the VIE. The updated guidance also
requires ongoing reassessments of the primary beneficiary of a VIE. The provisions of the updated guidance are effective for
the Company’s fiscal year beginning April 1, 2010. The Company does not expect the adoption of this guidance to have an
impact on the Company’s financial position, results of operations or cash flows.
In August 2009, FASB issued ASU No. 2009‑05 Measuring Liabilities at Fair Value. This update amends ASC 820, Fair Value
Measurements and Disclosure, in regards to the fair value measurement of liabilities. FASB ASC 820 clarifies that in circum-
stances in which a quoted price for an identical liability in an active market is not available, a reporting entity shall utilize one
or more of the following techniques: (i) the quoted price of the identical liability when traded as an asset, (ii) the quoted price
for a similar liability or for a similar liability when traded as an asset, or (iii) another valuation technique that is consistent
with the principles of ASC 820. In all instances a reporting entity shall utilize the approach that maximizes the use of relevant
observable inputs and minimizes the use of unobservable inputs. Also, when measuring the fair value of a liability, a reporting
entity shall not include a separate input or adjustment to other inputs relating to the existence of a restriction that prevents the
transfer of the liability. The adoption of this new standard had no impact on the Company’s financial statements.
In January 2010, the FASB issued ASU 2010‑06, Improving Disclosures about Fair Value Measurements, which is included in
the ASC in Topic 820 (Fair Value Measurements and Disclosures). ASU 2010‑06 requires new disclosures on the amount and
reason for transfers in and out of Level 1 and 2 fair value measurements. ASU 2010‑ 06 also requires disclosure of activities,
including purchases, sales, issuances, and settlements within the Level 3 fair value measurements and clarifies existing disclo-
sure requirements on levels of disaggregation and disclosures about inputs and valuation techniques. ASU 2010‑06 is effective
for interim and annual reporting periods beginning after December 15, 2009. The Company is currently assessing the impact
of adoption of ASU 2009‑14 and does not currently plan to early adopt.
PRESENTATION
There are different presentations between Canadian and US GAAP which are as follows:
i) Under U.S. GAAP, there is a difference between net income and other comprehensive income. As current operations has no
other comprehensive income, there is no effect to the statement of loss and comprehensive loss.
ii) No subtotal is permitted under U.S. GAAP within cash flow from operations on the statement of cash flows
Cor p or at e Dir e c t or y
32
He ad Office Gossan Resources Limited
Suite 404 - 171 Donald Street
Winnipeg Manitoba Canada R3C 1M4
Tel: (204) 943-1990
Fax: (204) 942-3434
E-mail: info@gossan.ca
Website: www.gossan.ca
Listing GSS on the TSX Venture Exchange

GSR on the Frankfurt-Freiverkehr & Xetra Exchanges (WKN 904435)
Share Capital Outstanding: 29,117,900

( a s at July 25, 2 010 ) Fully Diluted: 31,247,900

Transfer Agent CIBC Mellon Trust Company

PO Box 1 - 320 Bay Street
Toronto, Ontario M5H 4A6
Tel: 1-800-387-0825
Tel: (416) 643-5500
Leg al C ounsel Taylor McCaffrey L.L.B.

9th Floor - 400 St. Mary Avenue
Winnipeg, Manitoba R3C 4K5
Auditor Meyers Norris Penny LLP

2500 - 201 Portage Avenue
Winnipeg, Manitoba R3B 3K6
Direc tors Douglas Reeson, MBA Director & President

Carmelo Marrelli, BA, CGA, CA Secretary & CFO
and Officers
G. Ryan Cooke, P.Geo. Director
William McGuinty, B.Sc., P.Geo. Director
MaryAnn Mihychuk, M.Sc., P.Geo Director
Andrew Thomson Director
James W. Campbell, P.Geo., P.Eng. Honourary Chair

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CANADA
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55oN
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N
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Flin Flon
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Cross Lake
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Gods Lake
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PIPESTONE LAKE
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Vanadium/Titanium
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Bearskin
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Lake
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The Pas
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Norway
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SHARPE LAKE
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House Island
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Lake
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Gold
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Manitoba
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Sandy
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Lake
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Lake
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Winnipeg
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Lake
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Ontario
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Winnipegosis MANIGOTAGAN
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Berens
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Silica River
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SEPARATION RAPIDS
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BIRD RIVER
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Lithium
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PGMs/Nickel/Copper
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Bissett
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Lake Poplarfield
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Red Lake
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Manigotagan
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Manitoba
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5
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Gimli
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INWOOD
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8
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Lac du
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Magnesium
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Bonnet
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50 N
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Dryden
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Kenora
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Brandon
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PROPERTY
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TYPE
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17
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PRECIOUS METAL
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SPECIALTY METAL
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Red
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INDUSTRIAL MINERAL
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River
Fort Frances
100 km U.S.A. 11 Atikokan
95 W o International Falls
CO M M ODI T Y DI V E R S E E X P L OR AT ION | GREEN ENERGY DEMAND

lithium magnesium silicon titanium vanadium nickel copper zinc palladium platinum
3 12 14 22 23 28 29 30 46 78
Li Mg Si Ti V Ni Cu Zn Pd Pt
6.941 24.305 28.086 47.867 50.942 58.693 63.546 65.39 106.42 195.08
G o s s a n Res ources Limit ed
Suite 404 - 171 Donald Street
Winnipeg, MB R3C 1M4 Canada
Tel: (204) 943-1990
silicon
Fax: (204) 942-3434
14
Si
E- m ail : info@gossan.ca
W eb sit e : www.gossan.ca
28.086
nickel copper zinc
28 29 30
Ni Cu Zn
58.693 63.546 65.39
palladium
46
Pd
106.42
platinum
78
Pt
195.08
TSX Venture Exchange GSS | Freiverkehr & Xetra Exchanges GSR - WKN 904435

Focusing On Green & Alternative Energy Economies - Gossan Also Holds A 46.7% Equity Investment in The Claims Network

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Focusing On Green & Alternative Energy Economies - Gossan Also Holds A 46.7% Equity Investment in The Claims Network

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lithium

Mg 2010 ANNUAL REPORT

COMMODIT Y DIVERSE E XPLOR ATION | GREEN ENERGY DEMAND

Gossan trades on the TSX Venture Exchange under

A B O V E : MAGNESIUM CORE at Inwood

August 25, 2010

Gossan Resources Limited | 2010 Annual Report

The Watts, Griffis and McOuat National Instrument

Resource Grade MgO Grade CaO

The Measured Resource alone would be capable of

Cu The Bird River Project, which covers over 22 kilometres of

30 Deposit. douglas reeson at bird river project

Zn On March 26, 2007 the Company entered into an option

Gossan Resources Limited | 2010 Annual Report

Page Block Mineral Resource at US$12.00/tonne NSR Cut-Off

Ore Fault North Zone Mineral Resource at US$12.00/tonne NSR Cut-Off

Gossan Resources Limited | 2010 Annual Report

Ti Our 50% joint venture partner in the Pipestone Lake

V ment. Development of the Pipestone Lake Deposit

va n a diu m may have a new

A B O V E : PIPESTONE LAKE PROJECT AREA

Li The 432-hectare Separation Rapids Specialty Minerals

Gossan Resources Limited | 2010 Annual Report

The Claims Network Inc. is a service provider to the property

marketing to insurance companies in the USA.

Gossan Resources Limited | 2010 Annual Report

To the Shareholders of Gossan Resources Limited:

Comments for U.S. Readers

Gossan Resources Limited | 2010 Annual Report

Deferred income (Note 5) 200,000 100,000

Nature of Operations and Going Concern (Note 1)

Approved on Behalf of the Board:

Douglas Reeson, Director Andrew Thomson, Director

Los s, before the following (523,029) (73,884)

Share of TCN profit (Note 6) 139,322 73,620

Ne t los s and c omprehensive los s for the ye ar (385,806) (11,680)

Weighted average number of shares outstanding $ 29,074,045 $ 29,020,900

See accompanying notes to financial statements

Gossan Resources Limited | 2010 Annual Report

FOR THE YEARS ENDED MARCH 31, 2010 2009

Amortization 2,796 7,952

Incre ase in cash 355,947 45,516

cash, b e ginning of ye ar 140,692 95,176

cash, end of ye ar $ 496,639 $ 140,692

See accompanying notes to financial statements

Bal ance at end of ye ar $ 11,322,864 $ 11,304,778

Bal ance at end of ye ar $ 1,227,560 $ 1,204,316

bal ance at end of ye ar $ (7,353,198) $ (6,967,392)

total shareholders’ equit y, end of ye ar $ 5,197,226 $ 5,541,702

See accompanying notes to financial statements

Gossan Resources Limited | 2010 Annual Report

2. SIGNIFICANT ACCOUNTING POLICIES

(a) Mineral Properties

Gossan Resources Limited | 2010 Annual Report

(k) Revenue Recognition

(q) Future Accounting Changes

Gossan Resources Limited | 2010 Annual Report

4. Mineral propert y and financial risk fac tors

Commodity Price Risk

Gossan Resources Limited | 2010 Annual Report

6. investment in the cl aims ne t work inc.

7. furniture and equipment

$ 33,516 $ 24,993 $ 8,523 $ 8,973