Mirasol Resources Ltd.
Annual Report 2013

Plain-text annual report

MIRASOL RESOURCES LTD. (An Exploration Stage Company) CONSOLIDATED FINANCIAL STATEMENTS June 30, 2013 Canadian Funds INDEPENDENT AUDITORS' REPORT To the Shareholders of Mirasol Resources Ltd. We have audited the accompanying consolidated financial statements of Mirasol Resources Ltd., which comprise the consolidated statements of financial position as at June 30, 2013 and 2012, and the consolidated statements of (income) loss and comprehensive (income) loss, changes in equity and cash flows for the years then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Consolidated Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with International Financial Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. Auditors’ Responsibility Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion. Opinion In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Mirasol Resources Ltd. as at June 30, 2013 and 2012, and its financial performance and its cash flows for the years then ended in accordance with International Financial Reporting Standards. Vancouver, Canada October 22, 2013 “DAVIDSON & COMPANY LLP” Chartered Accountants Mirasol Resources Ltd. (An Exploration Stage Company) Consolidated Statements of Financial Position Canadian Funds As at ASSETS Current Assets Cash and cash equivalents Short-term investments Receivables and advances (Note 6) Investments (Note 7) Equipment (Note 8) Exploration and Evaluation Assets (Note 9) LIABILITIES Current Liabilities June 30, 2013 June 30, 2012 $ $ 27,786,195 1,415,928 1,196,092 18,315,659 48,713,874 166,416 2,832,215 6,826,040 997,830 231,466 - 8,055,336 208,870 2,624,003 $ 51,712,505 $ 10,888,209 Accounts payable and accrued liabilities (Note 10 and 11) $ 6,057,594 $ 985,207 37,821,160 14,823,477 (1,267) (6,988,459) 45,654,911 36,029,893 14,019,377 - (40,146,268) 9,903,002 $ 51,712,505 $ 10,888,209 EQUITY Share Capital (Note 12) Reserves Accumulated Other Comprehensive Loss Deficit Nature of Business (Note 1) Subsequent Events (Note 16) On Behalf of the Board: “ Mary L. Little ” “ Nick DeMare ” , , Director Director The accompanying notes are an integral part of these consolidated financial statements Page 3 Mirasol Resources Ltd. (An Exploration Stage Company) Consolidated Statements of (Income) Loss and Comprehensive (Income) Loss For the Years Ended June 30 Canadian Funds Operating Expenses Exploration costs (Note 9) Management fees (Note 11) Share-based payments (Note 12) Professional fees Office and miscellaneous Travel Shareholder information Listing and filing fees Depreciation (Note 8) Director fee Interest income Foreign exchange (gain) loss Gain on sale of Joaquin Property (Note 9(c)) Fair value adjustment on investment (Note 7) $ 2013 2012 $ 8,068,960 2,101,022 1,065,617 376,214 236,692 83,307 54,598 38,744 9,535 2,000 12,036,689 (36,354) (2,955,515) (58,990,546) 12,664,608 11,599,329 284,322 3,345,027 325,528 256,583 41,271 73,009 47,519 2,272 - 15,974,860 (29,733) 197,870 - - Net (Income) Loss for the Year before Income Taxes Income tax expense (Note 15) Net (Income) Loss for the Year (37,281,118) 16,142,997 4,123,309 - $ (33,157,809) $ 16,142,997 Other Comprehensive Loss Foreign currency translation losses Comprehensive (Income) Loss for the Year Basic (Earnings) Loss per Share (Note 13) Diluted (Earnings) Loss per Share (Note 13) 1,267 (33,156,542) $ - 16,142,997 (0.76) $ (0.76) $ 0.40 0.40 $ $ $ Weighted Average Number of Shares Outstanding – Basic (Note 13) 43,460,373 39,986,459 Weighted Average Number of Shares Outstanding – Diluted (Note 13) 43,890,565 39,986,459 The accompanying notes are an integral part of these consolidated financial statements Page 4 Mirasol Resources Ltd. (An Exploration Stage Company) Consolidated Statements of Changes in Equity Canadian Funds Share Capital Common Shares Reserves Accumulated Other Comprehensive Income Deficit Total Number $ $ $ $ $ Balance – June 30, 2011 38,342,201 24,633,294 9,099,836 Private placement - Units issued for cash - Fair value of private placement warrants Share issuance costs - Finders’ warrants - Cash Options exercised Fair value of options exercised Warrants exercised Fair value of warrants exercised Share-based payments Loss for year Balance – June 30, 2012 Options exercised Fair value of options Bonus shares issued Share-based payments Foreign currency translation adjustment Net income for the year 4,000,000 13,200,000 - - (1,764,978) 1,764,978 - - 20,000 (250,440) (1,015,313) 12,600 - 338,460 - - - 6,296 773,826 434,608 - - 42,700,661 955,000 - 500,000 - 36,029,893 504,750 261,517 1,025,000 - 250,440 - - (6,296) - (434,608) 3,345,027 - 14,019,377 - (261,517) - 1,065,617 - - - - - - - - - - - - - - - - (24,003,271) 9,729,859 - - - - - - - 13,200,000 - - (1,015,313) 12,600 - 773,826 - - (16,142,997) - 3,345,027 (16,142,997) (40,146,268) - - - - 9,903,002 504,750 - 1,025,000 1,065,617 - - - - - - (1,267) - - 33,157,809 (1,267) 33,157,809 Balance – June 30, 2013 44,155,661 37,821,160 14,823,477 (1,267) (6,988,459) 45,654,911 The accompanying notes are an integral part of these consolidated financial statements Page 5 Mirasol Resources Ltd. (An Exploration Stage Company) Consolidated Statements of Cash Flows For the Years Ended June 30 Canadian Funds Operating Activities Income (loss) for the year Adjustments for: Gain on sale of Joaquin Property (Note 9(c)) Fair value adjustment on investments (Note 7) Bonus share compensation Share-based payments (Note 12) Interest income Depreciation Depreciation included in exploration expenses Unrealized foreign exchange Changes in non-cash working capital items: Receivables and advances Accounts payable and accrued liabilities Cash used in operating activities Investing Activities Acquisition of exploration and evaluation assets Proceeds from sale of Joaquin Property (Note 9) Short-term investments purchased Interest received Purchase of equipment Cash provided by (used) in investing activities Financing Activities Share capital issued, net of share issuance costs Cash provided by financing activities 2013 2012 $ 33,157,809 $ (16,142,997) (58,990,546) 12,664,608 1,025,000 1,065,617 (36,354) 9,535 58,381 (2,271,816) - - - 3,345,027 (29,733) 2,272 53,992 22,335 (13,317,766) (12,749,104) 82,444 4,410,933 (61,653) 139,702 (8,824,389) (12,671,055) (208,212) 28,831,815 (415,928) 34,047 (25,462) 28,216,260 (2,480,198) - (997,830) 29,733 (118,091) (3,566,386) 504,750 504,750 12,971,113 12,971,113 Effect of exchange rate change on cash and cash equivalents 1,063,534 (22,335) Change in Cash and cash equivalents Cash and cash equivalents - Beginning of year 20,960,155 6,826,040 (3,288,663) 10,114,703 Cash and cash equivalents - End of year $ 27,786,195 $ 6,826,040 Supplemental Schedule of Non-Cash Investing and Financing Transactions: Shares received for the sale of Joaquin Property (Note 7 and 9(c)) Shares issued under bonus share plan (Note 12(d)) Exploration and evaluation assets included in accounts payable Fair value of private placement warrants Fair value of finder fees warrants Fair value of options exercised Fair value of warrants exercised $ $ $ $ $ $ $ 29,825,985 1,025,000 - - - 261,517 - $ $ $ $ $ $ $ - - 65,472 1,764,978 250,440 6,296 434,608 There was no cash paid for interest or income taxes for the years ended June 30, 2013 and 2012. The accompanying notes are an integral part of these consolidated financial statements Page 6 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds 1. Nature of Business Mirasol Resources Ltd. (“Mirasol” or “the Company”) is incorporated under the laws of the Province of British Columbia, Canada. The Company’s corporate registered and records office is located at 600 – 890 West Pender Street, Vancouver, British Columbia. Mirasol engages in acquiring and exploring mineral properties, principally located in Argentina and Chile, with the objective of identifying mineralized deposits economically worthy of subsequent development, mining or sale. The business of mining and exploration involves a high degree of risk and there can be no assurance that current exploration programs will result in profitable mining operations. The Company has no source of revenue, and has significant cash requirements to meet its administrative overhead and maintain its exploration and evaluation assets. The recovery of the Company’s exploration and evaluation assets is dependent on the discovery of economically recoverable reserves, the ability of the Company to obtain the necessary financing to complete the development of these properties, and future profitable production or proceeds from disposition of exploration and evaluation assets. While the Company has been successful in the past with its financing efforts, there can be no assurance that it will be able to do so in the future. Management believes that the Company has sufficient working capital to maintain its operations and activities for the next twelve months. 2. Basis of Presentation Statement of compliance The financial statements of the Company have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). The policies presented in Note 3 were consistently applied to all periods presented. The Board of Directors approved the consolidated financial statements on October 22, 2013. Basis of measurement The consolidated financial statements have been prepared on a historical cost basis, except for financial instruments classified as financial instruments at fair value through profit and loss, which are stated at their fair value. In addition, these consolidated financial statements have been prepared using the accrual basis of accounting except for cash flow information. 3. Significant Accounting Policies a) Consolidation These consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Minera Del Sol S.A., Australis S.A., Gran Nueva Victoria S.A., Cabo Sur S.A., Recursos Mirasol Holdings, MDS Property Holdings Limited and Minera Mirasol Chile Limitada. The accounts of Mirasol Argentina S.R.L. were included up to the date of disposition on December 21, 2012. Inter-company balances have been eliminated upon consolidation. Page 7 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds b) Significant Accounting Estimates and Judgments The preparation of financial statements requires management to make judgments, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, profit and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making the judgments about carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and further periods if the review affects both current and future periods. Significant accounting estimates and judgments are related to, but are not limited to, the following: (i) Impairment of exploration and evaluation assets: The net carrying value of each mineral license and capitalized exploration costs is reviewed regularly for conditions that are indicators of impairment. This review requires significant judgment as the Company does not have any proven and probable reserves that enable future cash flows to be compared to the carrying values. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the licenses’ value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the licenses’ acquisition, development or cost of holding; whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future; and whether the Company has the necessary funds to be able to maintain its interest in the mineral license. As at June 30, 2013, the Company has concluded that impairment conditions do not exist. (ii) Share-based payments: The Company provides compensation benefits to its employees, directors and officers through a stock option plan. The Company also grants warrants in conjunction with private placements and as compensation for debt financing arrangements. The fair value of each option award is estimated on the date of the grant using the Black-Scholes option pricing model. Expected volatility is based on historical volatility of the Company’s share price. The Company uses historical data to estimate option exercises and forfeiture rates with the valuation model. The risk-free interest rate for the expected term of the option is based on the yields of government bonds. Changes in these assumptions, especially the volatility and the expected life determination could have a material impact on the Company’s comprehensive (income) loss for the year. All estimates used in the model are based on historical data which may not be representative of future results. (iii) Provision for income taxes: The Company is subject to income taxes in numerous jurisdictions. Uncertainties exist with respect to interpretations of tax regulations. The Company recognizes it current tax payable based on its interpretations of tax regulations which may differ from the interpretations of the tax authorities. Such differing interpretations may impact the Company’s current income tax payable. Judgment is required in determining whether deferred tax assets are recognized on the statement of financial position. The recognition of deferred tax assets require management to assess the likelihood that the Company will generate taxable income in future periods to utilize the deferred tax assets. Due to a history of losses deferred tax assets have not be recognized. Page 8 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds (iv) Functional currencies: The functional currency of an entity is the currency of the primary economic environment in which an entity operates. The determination of an entity’s functional currency requires judgement based on analysis of relevant criteria. The functional currency of the Company and its subsidiaries was determined by conducting an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates. c) Foreign Currencies The functional currency is the currency of the primary economic environment in which an entity operates. The functional currency of the Company and its wholly owned subsidiaries, Mirasol Argentina S.R.L. (disposed December 21, 2012), Minera Del Sol S.A., Australis S.A., Gran Nueva Victoria S.A., Cabo Sur S.A., and Minera Mirasol Chile Limitada, is the Canadian Dollar (“$”). The functional currency of its wholly owned subsidiaries Recursos Mirasol Holdings Limited and MDS Property Holdings is the United States Dollar. The functional currency determinations were conducted through an analysis of the consideration factors identified in IAS 21. Any transactions in currencies other than the functional currency have been translated to the Canadian dollar in accordance with IAS 21. Transactions in currencies other than the functional currency are recorded at the rates of exchange prevailing on dates of transactions. At the end of each reporting period, monetary assets and liabilities that are denominated in foreign currencies are translated at the rates prevailing at that date. Non-monetary assets and liabilities carried at fair value that are denominated in foreign currencies are translated at rates prevailing at the date when the fair value was determined. All gains and losses on translation of these foreign currency transactions are included in the statements of (income) loss and comprehensive (income) loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Assets and liabilities of entities with a functional currency other than the Canadian Dollar are translated at the period end rates of exchange, and the results of their operations are translated at average rates of exchange for the period. The resulting changes are recognized in accumulated other comprehensive loss (“AOCI”) in equity as a foreign currency translation adjustment. The Company’s presentation currency is the Canadian dollar. d) Cash and Cash Equivalents Cash and cash equivalents consist of cash on deposit with banks and short-term interest-bearing investments with maturities of three months or less at the purchase date. Deposits with banks and short-term interest-bearing investments with original term to maturity greater than three months but less than one year are presented as short-term investments. e) Financial Instruments All financial instruments are initially recognized at fair value on the statement of financial position. The Company has classified each financial instrument into one of the following categories: (1) financial assets or liabilities at fair value through profit or loss (“FVTPL”), (2) loans and receivables, (3) financial assets available-for-sale, (4) financial assets held-to maturity, and (5) other financial liabilities. Subsequent measurement of financial instruments is based on their classification. Page 9 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds Financial assets and liabilities at FVTPL are subsequently measured at fair value with changes in those fair values recognized in the statement of (income) loss and comprehensive (income) loss. Financial assets “available-for-sale” are subsequently measured at fair value with changes in fair value recognized in other comprehensive income/loss, net of tax. Financial assets and liabilities “held-to-maturity”, “loans and receivables”, and “other financial liabilities” are subsequently measured at depreciated cost using the effective interest method. f) Impairment of Financial Assets At each reporting date, the Company assesses whether there is objective evidence that a financial asset is impaired. If such evidence exists, the Company recognizes an impairment loss as follows: (i) Financial assets carried at depreciated cost: The loss is the difference between the depreciated cost of the loan or receivable and the present value of the estimated future cash flows, discounted using the instrument’s original effective interest rate. The carrying amount of the asset is reduced by this amount either directly or indirectly through the use of an allowance account. (ii) Available-for-sale financial assets: The impairment loss is the difference between the original cost of the asset and its fair value at the measurement date, less any impairment losses previously recognized in the statement of (income) loss and comprehensive (income) loss. This amount represents the cumulative loss in accumulated other comprehensive income that is reclassified to the statement of (income) loss and comprehensive (income) loss. Impairment losses on financial assets carried at depreciated cost are reversed in subsequent periods if the amount of the loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognized. Impairment losses on available-for-sale financial assets are not reversed. g) Impairment of Non-financial Assets The carrying amounts of non-financial assets are reviewed for impairment whenever facts and circumstances suggest that the carrying amounts may not be recoverable. If there are indicators of impairment, the recoverable amount of the asset is estimated in order to determine the extent of any impairment. For the purpose of measuring recoverable amounts, assets are grouped at the lowest levels for which there are separately identifiable cash flows (“cash-generating units” or “CGUs”). The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use (being the present value of the expected future cash flows of the relevant asset or CGU). An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount. Non-financial assets that have been impaired in prior periods are tested for possible reversal of impairment whenever events or changes in circumstances indicate that the impairment has reversed. If the impairment has reversed, the carrying amount of the asset is increased to its recoverable amount but not beyond the carrying amount that would have been determined had no impairment loss been recognized for the asset in the prior periods. A reversal of an impairment loss is recognized in the statement of (income) loss and comprehensive (income) loss. h) Equipment Equipment is stated at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditures that are directly attributable to the acquisition of the asset. Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Company and the cost can be measured reliably. The carrying amount of a replaced asset is derecognized when replaced. Page 10 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds The Company provides for depreciation for equipment using the declining balance method at a rate of 30% for exploration equipment and 30% for computer hardware and applies only one-half of the applicable rate in the year of acquisition. The Company allocates the amount initially recognized to each asset’s significant components and amortizes each component separately. Residual values, depreciation methods and useful lives of the assets are reviewed periodically and adjusted on a prospective basis as required. i) Exploration and Evaluation Assets The Company capitalizes the direct costs of acquiring mineral property interests as exploration and evaluation assets. Option payments are considered acquisition costs if the Company has the intention of exercising the underlying option. Exploration and evaluation costs are charged to operations in the period incurred until such time as it has been determined that a property has economically recoverable reserves, in which case subsequent exploration and development costs are capitalized. Exploration costs include value-added taxes because the recoverability of these amounts is uncertain. Ownership of exploration and evaluation assets involves certain interest risks due to the difficulties of determining and obtaining clear title to claims as well as the potential for problems arising from the frequently ambiguous conveyance history characteristics of many exploration and evaluation assets. The Company has investigated ownership of its exploration and evaluation assets and, to the best of its knowledge, ownership of its interests are in good standing. j) Provisions (i) Decommissioning and restoration provision: Future obligations to retire an asset, including dismantling, remediation and ongoing treatment and monitoring of the site related to normal operations are initially recognized and recorded as a liability based on estimated future cash flows discounted at a risk free rate. The decommissioning and restoration provision is adjusted at each reporting period for changes to factors including the expected amount of cash flows required to discharge the liability, the timing of such cash flows and the pre-tax rate for risk specific to the liability. The liability is also accreted to full value over time through periodic charges to earnings. This unwinding of the discount is charged to financing expense in the statement of (income) loss and comprehensive (income) loss. The amount of the decommissioning and restoration provision initially recognized is capitalized as part of the related asset’s carrying value and depreciated to earnings. The method of depreciation follows that of the underlying asset. The costs related to a decommissioning and restoration provision are only capitalized to the extent that the amount meets the definition of an asset and can bring about future economic benefit. For the years presented, the Company does not have any decommission or restoration provisions. (ii) Other provisions: Provisions are recognized when a current legal or constructive obligation exists, as a result of past events, and it is probable that an outflow of resources that can be reliably estimated will be required to settle the obligation. Where the effect is material, the provision is discounted using an appropriate pre-tax rate for risk specific to the liability. Page 11 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds k) Income Taxes Income tax expense is comprised of current and deferred tax. Income tax is recognized in the statement of (income) loss and comprehensive (income) loss except to the extent that it relates to items recognized directly in equity, in which case the income tax is also recognized directly in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years. In general, deferred tax is recognized in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. Deferred income tax is determined on a non-discounted basis using tax rates and laws that have been enacted or substantively enacted at the date of statement of financial position and are expected to apply when the deferred tax asset or liability is settled. Deferred tax assets are recognized to the extent that it is probable that the assets can be recovered. Deferred tax is provided on temporary differences arising on investments in subsidiaries and associates, except, in the case of subsidiaries, where the timing of the reversal of the temporary difference is controlled by the Company and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets and liabilities are presented as non-current. Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities, when they relate to income taxes levied by the same taxation authority and when the Company intends to settle its current tax assets and liabilities on a net basis. l) Share Capital Share capital issued as non-monetary consideration is recorded at an amount based on fair market value of the shares issued. The proceeds from the issue of units is allocated between common shares and common share purchase warrants on a pro-rated basis on a relative fair value as follows: the fair value of common shares is based on the price at market close on the date the units are issued and the fair value of the common share purchase warrants is determined using a Black-Scholes pricing model. m) Share-based Payments The Company grants share options to buy common shares of the Company to directors, officers, employees and service providers. The Company recognizes share-based payment expense based on the estimated fair value of the options. A fair value measurement is made for each vesting instalment within each option grant and is determined using the Black-Scholes option-pricing model. The fair value of the options is recognized over the vesting period of the options granted as both share-based payment expense and reserve. This includes a forfeiture estimate, which is revised for actual forfeitures in subsequent periods. The reserve account is subsequently reduced if the options are exercised and the amount initially recorded is then credited to share capital. In situations where equity instruments are issued to non-employees and some or all of the goods or services received by the entity as consideration cannot be specifically identified, they are measured at fair value of the share-based payment. Otherwise, share-based payments are measured at the fair value of goods or services received. Page 12 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds n) Earnings per Share Basic earnings per share is computed by dividing income available to common shareholders by the weighted average number of common shares outstanding during the year. The computation of diluted earnings per share assumes the conversion, exercise or contingent issuance of securities only when such conversion, exercise or issuance would have a dilutive effect on the earnings per share. The dilutive effect of convertible securities is reflected in the diluted earnings per share by application of the "if converted" method. The dilutive effect of outstanding options and warrants and their equivalents is reflected in the diluted earnings per share by application of the treasury stock method. 4. Recent Accounting Pronouncements Certain new standards, interpretations, amendments and improvements to existing standards were issued by the International Accounting Standards Board (“IASB”) or International Financial Reporting Interpretations Committee (“IFRIC”). The new standards, amendments to standards and interpretations that been issued and that are applicable to the Company but not effective during the ended June 30, 2013 are as follows: a) b) c) d) IFRS 7 Disclosures: Transfers of Financial Assets (Amendment) has been amended to enhance disclosures for financial assets. These disclosures relate to assets transferred (as defined under IAS 39 Financial Instruments: Recognition and Measurement (“IAS 39”)). If the assets transferred are not derecognized entirely in the financial statements, an entity has to disclose information that enables users of financial statements to understand the relationship between those assets which are not derecognized and their associated liabilities. If those assets are derecognized entirely, but the entity retains a continuing involvement, disclosures have to be provided that enable users of financial statements to evaluate the nature of, and risks associated with, the entity’s continuing involvement in those derecognized assets. The standard has an effective date of January 1, 2013 with early adoption permitted. The Company does not anticipate that this amendment will have a significant impact on its financial statements. IFRS 9 Financial Instruments: Classification and Measurement is the first part of a new standard on classification and measurement of financial assets that will replace IAS 39. IFRS 9 has two measurement categories: depreciated cost and fair value. All equity instruments are measured at fair value. A debt instrument is recorded at depreciated cost only if the entity is holding the instrument to collect contractual cash flows and the cash flows represent principal and interest. Otherwise it is recorded at fair value through profit or loss. The effective date for the amendment is January 1, 2015 and is applied retrospectively. Early application is permitted. The Company is currently evaluating the impact of this standard. IFRS 10 Consolidated Financial Statements replaces IAS 27, Consolidated and Separate Financial Statements, and requires all controlled entities to be consolidated based on a single control model, whereby control is defined as the exposure to, or having rights to, returns from its involvement in its investee, and the ability to affect those returns through is power over the investee. The standard has an effective date of January 1, 2013 with early adoption permitted. The Company is currently evaluating the impact of this standard. IFRS 11 Joint Arrangements replaces the existing IAS 31, Joint Ventures. IFRS 11 provides for the accounting of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form (as is currently the case). The Standard also eliminates the option to account for jointly controlled entities using the proportionate consolidation method. The standard has an effective date of January 1, 2013 with early adoption permitted. The Company is currently evaluating the impact of this standard. Page 13 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds e) f) g) h) i) IFRS 12 Disclosure of Interests in Other Entities provides certain disclosure requirements about subsidiaries, joint ventures and associates, as well as unconsolidated structured entities and replaces existing disclosure requirements. The key features are the requirement to disclose judgements and assumptions made when deciding how to classify involvement with another entity, interest that non- controlling entities have in consolidated entities and the nature of the risks associated with interests in other entities. This is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company is currently evaluating the impact of this standard. IFRS 13 Fair Value Measurement establishes a single source of guidance for fair value measurements, when fair value is permitted by IFRS. The standard will not affect when fair value is used, it just describes how to measure fair value. The standard provides a single framework for measuring fair value, while requiring enhanced disclosures when fair value is applied, establishes the definition of fair value as the “exit price” and clarifies that the concepts of highest and best use and valuation premise are relevant only for non-financial assets and liabilities. This is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company is currently evaluating the impact of this standard. IAS 27 Separate Financial Statements addresses accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements. This is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company is currently evaluating the impact of this standard. IAS 28 Investments in Associates and Joint Ventures has been amended and will provide accounting and disclosure guidance for investments in associates and joint ventures. This is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company is currently evaluating the impact of this standard. IAS 32 Financial Instruments: Presentation updates the application guidance to clarify some of the requirements for offsetting financial assets and financial liabilities on the statement of financial position. This is effective for annual periods beginning on or after January 1, 2014. The Company is currently evaluating the impact of this standard. 5. Financial Instruments Categories of financial instruments Financial assets Fair Value Through Profit and Loss Cash and cash equivalents Short-term investments Investments Loans Receivables and advances Financial liabilities Other financial liabilities Accounts payable and accrued liabilities Page 14 June 30, 2013 June 30, 2012 $ 27,786,195 $ 1,415,928 18,315,659 972,515 6,826,040 997,830 - - $ $ 48,490,297 $ 7,823,870 1,934,285 $ 985,207 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds a) Fair Value Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are: Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities; Level 2 – Inputs other than quoted prices that are directly or indirectly observable for the asset or liability; and, Level 3 – Inputs that are not based on observable market data; Level 1 Cash and cash equivalents Short-term investments Investments June 30, 2013 $ $ $ 27,786,195 $ 1,415,928 $ 18,315,659 $ June 30, 2012 6,826,040 997,830 - Fair value of investments traded in active markets is based on quoted market prices on the date of the statement of financial position. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for investments held by the Company is the current bid price of the held securities. These securities are therefore included in level 1 of the fair value hierarchy. The fair values of the Company’s other financial instruments approximates their carrying values because of the short-term nature of these instruments. b) Management of capital risk The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes the components of equity. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, acquire or dispose of assets, enter into joint ventures or obtain debt financing. In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. In order to maximize ongoing development efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its cash in highly liquid short-term interest-bearing investments with maturities of twelve months or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations. The Company is not subject to externally imposed capital requirements. There were no changes to the Company’s approach to capital management during the year. Page 15 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds c) Management of financial risk The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company's financial instruments are summarized below. i. Currency risk The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company operates in Canada, Argentina and Chile and a portion of its expenses are incurred in United States (“US”), Australian dollars and in Argentine and Chilean Pesos. A significant change in the currency exchange rates between the US and Australian dollar relative to the Canadian dollar and the Argentine and Chilean Peso to the Canadian dollar could have an effect on the Company’s results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations. At June 30, 2013, the Company is exposed to currency risk through the following assets and liabilities denominated in US and Australian dollars and Argentine and Chilean Pesos: Cash and cash equivalents Receivables and advances Accounts payable and accrued liabilities US Dollars 20,193,886 925,147 (664,492) Australian Dollars 10,743 - (2,269) Argentine Peso 2,002,826 2,103,754 (4,191,172) Chilean Peso 197,570,323 - (381,913,720) Based on the above net exposures as at June 30, 2013, and assuming that all other variables remain constant, a 10% depreciation or appreciation of the Canadian dollar against the US and Australian dollar would result in an increase/decrease of $2,150,181 and $817, respectively in the Company’s net income. Likewise, a 10% depreciation or appreciation of the Canadian dollar against the Argentine and Chilean Peso would result in an increase/decrease of $1,650 and $38,196, respectively in the Company’s net income. ii. Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s cash is held through large financial institutions. The Company’s receivables consist of Goods and Services tax due from the Federal Government of Canada and holdback receivable from Coeur, which was collected subsequent to the year ended June 30, 2013 (Note 9(c)). Management believes that credit risk concentration with respect to receivables is remote. iii. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure and financial leverage as outlined above. As at June 30, 2013, the Company’s financial liabilities consist of accounts payable and accrued liabilities totalling $1,934,285 (2012 - $985,207). The Company has also recorded an income tax provision of $4,123,309. All of the Company’s obligations are expected to be paid within 90 days. Management believes the Company has sufficient funds to meet its liabilities as they become due. Page 16 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds iv. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the short-term investments included in cash is limited because these investments are generally held to maturity. v. Commodity price risk The Company is exposed to equity securities price risk because of investments held by the Company and classified on the statement of financial position as FVTPL and also to the price risk with respect to commodity prices. The Company does not typically invest in equity securities and the maximum exposure to the price risk is represented by the changing fair value of such investments. Assuming all variables remain constant, a 10% increase/decrease in the quoted market price of the Company’s investments would result in an increase/decrease in the Company’s income of approximately US$1,742,357. The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company. 6. Receivables and advances Good and services tax receivable Prepaid expenses and advances Holdback receivable (Note 9(c)) 7. Investments Common shares - Coeur Mining Inc. Change in fair value Exchange differences June 30, 2013 22,746 $ 200,831 972,515 1,196,092 $ June 30, 2012 23,701 207,765 - 231,466 $ $ June 30, 2013 June 30, 2012 $ $ $ 29,825,985 (12,664,608) 1,154,282 18,315,659 $ - - - - On December 21, 2012, the Company, in conjunction with the sale of its Joaquin Property (Note 9(c)), received as partial consideration, 1,310,043 common shares of Coeur Mining Inc. (formally Coeur d’Alene Mines Corporation) (“Coeur”) valued at $29,825,985 (US $29,999,985). The Company has designated these common shares as financial assets at fair value through profit or loss and the resulting change in their fair value has been recorded within the statement of (income) loss and comprehensive (income) loss. The fair value of common shares of Coeur is based on their current close prices on the New York Stock Exchange as at June 30, 2013. Page 17 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds 8. Equipment Cost Balance as at June 30, 2011 Additions for the year Balance as at June 30, 2012 Additions for the year Balance as at June 30, 2013 Accumulated Depreciation Balance as at June 30, 2011 Depreciation for the year Balance at June 30, 2012 Depreciation for the year Balance as at June 30, 2013 Carrying amounts As at June 30, 2012 As at June 30, 2013 Exploration Equipment Computer Hardware 247,859 $ 112,280 360,139 $ 23,105 383,244 $ 23,936 $ 5,811 29,747 $ 2,357 32,104 $ Total 271,795 118,091 389,886 25,462 415,348 109,277 $ 15,475 $ 53,234 3,030 162,511 $ 18,505 $ 64,189 3,727 226,700 $ 22,232 $ 124,752 (i) 56,264 181,016 (i) 67,916 248,932 197,628 $ 156,544 $ 11,242 $ 9,872 $ 208,870 166,416 $ $ $ $ $ $ $ $ (i) Allocated between depreciation expense and exploration costs on the statement of (income) loss and comprehensive (income) loss. 9. Exploration and Evaluation Assets a) Claudia Property The Company owns a 100% interest in the Claudia property situated in the Santa Cruz Mining District, Argentina. b) Espejo, La Libanesa, and La Curva Properties The Company owns a 100% interest in mining interests of Espejo, La Libanesa, and La Curva properties situated in the Santa Cruz Mining District, Argentina, by staking. The Company signed a letter of intent on April 27, 2011 and a definitive agreement on October 4, 2012 with Pan American Silver Corp. (“Pan American”) which permits Pan American to earn a 51% interest in the Espejo property by expending US $4 million over four years, and then to reach a 61% interest by completing a National Instrument 43-101 (“NI 43-101”) compliant feasibility study, at which time Mirasol can retain an equity interest in the project or request Pan American to finance project development, to be repaid through cash flow. The Company received $76,433 (US $75,000) pursuant to the arrangement between the parties during the year ended June 30, 2012. Page 18 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds c) Sascha and Joaquin Properties The Company owns a 100% interest in the Sascha Property situated in the Santa Cruz Mining District, Argentina. The Company had a signed option agreement with Coeur for the exploration of Sascha and Joaquin gold- silver projects. The agreement provided Coeur the option to earn an initial 51% in both projects by expending a total of US $8 million in exploration over four years. In October 2008, Coeur terminated its option on the Sascha property and returned the property to Mirasol. The total earn-in on both properties reached US $6 million and Coeur vested at 51% interest in the Joaquin property in December 2010. On December 21, 2012, the Company completed the sale of its remaining 49% interest in the Joaquin Property to Coeur for total consideration of $59,652,000 (US $60,000,000). The transaction was carried out through the sale of the Company’s Argentine subsidiary holding the 49% interest in the Joaquin Property. One-half of the consideration was paid in cash (with a holdback of $994,200 (US $1,000,000) to cover any relevant taxes on the transfer of ownership in Argentina) and the balance was paid with 1,310,043 shares of common stock in the capital of Coeur (Note 7). As at June 30, 2013, the holdback receivable, net of transfer taxes paid, is recorded at $972,515 (US$925,147) and is included in receivables and advances in these consolidated financial statements (Note 6). The holdback receivable was received on July 12, 2013. The transaction resulted in a pre-tax accounting gain of $58,990,546 calculated as follows: Cash received (US $29,000,015) Cash held back and receivable (US $1,000,000) Common shares of Coeur (US $29,999,985) Transaction costs Working capital of Argentine subsidiary Gain on Sale of Joaquin Property d) Santa Rita Property and Virginia Zone $ $ 28,831,815 994,200 29,825,985 (686,076) 24,622 58,990,546 The Company owns a 100% interest in the Santa Rita property situated in the Santa Cruz Mining District, Argentina. The Santa Rita property also hosts the Virginia prospect, thus together Santa Rita and Virginia account for total expenditures on the Santa Rita property. During the year ended June 30, 2013, the Company purchased certain surface rights overlaying the Virginia prospect for $34,034 (Argentine Pesos 157,564) (Year ended June 30, 2012 - $2,545,670). The cost of surface rights has been capitalized to exploration and evaluation assets. e) Nico Property The Company owns a 100% interest in the Nico property mining interests situated in the Santa Cruz Mining District, Argentina, by staking. f) Pajaro, Veloz and Los Loros Properties The Company owns 100% of the rights to three exploration properties, Pajaro, Los Loros and Veloz, in Santa Cruz Province, Argentina. During 2008, these exploration properties were acquired by the Company issuing 100,000 common shares. The shares had a fair value acquisition cost at issuance of $69,801. Page 19 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds g) Gorbea Project The Company owns 100% of the claims under its Gorbea project in Northern Chile. It is engaged in prospect generation and exploration of disseminated gold and copper prospects in the region. h) Rubi Property The Company owns a 100% interest in the Rubi property located 22 km southwest of El Salvador in Northern Chile. i) Atlas Property The Company holds a 100% interest in the Atlas Property (formally Akira Property) in northern Chile, acquired by staking on open ground. During the year ended June 30, 2013, the Company acquired mineral concessions on the property for a claim titled Dos Hermanos for $174,178 (US$175,000). The amount has been capitalized to exploration and evaluation assets. j) Titan Property The Company holds 100% interest in the Titan Property (formally Cindy) in Northern Chile. The property was acquired through staking on open ground, as part of the Company’s Miocene Arc exploration program k) Other Properties Mirasol holds a number of early stage exploration properties which are prospective for gold and/or silver mineralization in southern Argentina and northern Chile. A reconciliation of capitalized acquisition costs is as follows: Acquisition Costs Argentina Nico Pajaro, Veloz and Los Loros Santa Rita and Virginia Chile Atlas - Dos Hermanos Argentina Nico Pajaro, Veloz and Los Loros Santa Rita and Virginia Balance at June 30, 2012 Additions during the year Balance at June 30, 2013 $ - - 34,034 174,178 208,212 $ 8,532 69,801 2,579,704 174,178 2,832,215 Additions during the year Balance at June 30, 2012 - $ - 2,545,670 2,545,670 $ 8,532 69,801 2,545,670 2,624,003 $ $ $ $ 8,532 69,801 2,545,670 - 2,624,003 Balance at June 30, 2011 8,532 69,801 - 78,333 $ $ $ $ Page 20 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds Cumulative exploration expenditures per project under active exploration are as follows: Exploration Costs Claudia Espejo Homenaje Joaquin La Curva La Libanesa Nico Pajaro, Veloz and Los Loros Santa Rita and Virginia Sascha Other** Total Argentina Properties Atlas El Dorado Gorbea Rubi Titan (formerly Cindy) Vaquillas Other** Total Chile Properties Total Exploration Costs $ $ $ $ $ Balance at June 30, 2012 Additions during the period Balance at June 30, 2013 $ $ $ 3,599,635 134,002 173,701 552,365 822,503 871,022 305,893 154,827 8,528,465 486,504 5,712,198 21,341,115 13,689 - 1,315,385 583,850 279,804 - 314,015 1,459,148 $ 17,078 36,667 100,993 451,551 16,294 8,407 11,253 1,139,187 22,365 1,594,334 5,058,783 151,080 210,368 653,358 1,274,054 887,316 314,300 166,080 9,667,652 508,869 7,306,532 4,857,277 $ 26,198,392 842,091 $ 58,950 49,869 248,018 1,610,120 153,938 248,697 855,780 58,950 1,365,254 831,868 1,889,924 153,938 562,712 2,506,743 $ 3,211,683 $ 5,718,426 23,847,858 $ 8,068,960 $ 31,916,818 ** Includes costs incurred for value added taxes and generative exploration. Page 21 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds The Company incurred exploration and evaluation costs on its properties as follows: Argentina Claudia Consultants and salaries Camp and general Drilling Geophysics Travel Mining rights and fees Assays and sampling Espejo Option payment received Consultants and salaries Camp and general Travel Mining rights and fees Homenaje Consultants and salaries Camp and general Travel Mining rights and fees Assays and sampling Joaquin Consultants and salary Camp and general Travel Mining rights and fees Assays and sampling La Curva Consultants and salary Camp and general Travel Mining rights and fees Assays and sampling La Libanesa Consultants and salary Camp and general Travel Mining rights and fees Assays and sampling Year Ended June 30, 2013 Year Ended June 30, 2012 $ $ 714,309 632,713 - - 53,313 1,765 57,048 1,459,148 1,004,302 973,971 491,425 1,966 127,134 135,775 209,708 2,944,281 - 15,244 133 718 983 17,078 17,045 10,043 30 103 9,446 36,667 63,048 30,595 5,550 211 1,589 100,993 271,309 134,876 30,106 333 14,927 451,551 2,898 12,288 - 1,108 - 16,294 (76,433) 2,917 849 38 1,530 (71,099) 68,089 44,823 19,669 1,185 15 133,781 114,513 4,020 8,545 833 90 128,001 72,348 34,608 10,728 1,180 15 118,879 63,973 28,532 4,179 1,015 478 98,177 Page 22 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds Argentina (Continued) Los Loros Consultants and salary Camp and general Travel Mining rights and fees Assays and sampling Nico Consultants and salary Camp and general Travel Mining rights and fees Santa Rita and Virginia Consultant and salary Camp and general Drilling Mining rights and fees Travel Assays and sampling Sascha Consultants and salary Camp and general Mining rights and fees Travel Chile Atlas Consultant and salary Camp and general Drilling Environmental Geophysics Travel Mining rights and fees Assays and sampling El Dorado Consultant and salary Camp and general Geophysics Travel Mining rights and fees Assays and sampling $ Year Ended June 30, 2013 Year Ended June 30, 2012 $ 9,563 - 1,512 178 - 11,253 5,751 2,270 - 386 8,407 653,572 390,160 - 1,201 57,583 36,671 1,139,187 3,238 18,615 512 - 22,365 242,069 243,905 42,741 49,587 19,344 96,253 25,661 122,531 842,091 29,414 14,563 162 4,860 3,069 6,882 58,950 48,065 9,166 7,695 331 134 65,391 396 1,380 23 32 1,831 1,271,717 1,080,227 2,725,136 118,118 150,540 242,593 5,588,331 13,840 8,300 318 2,103 24,561 - - - - 239 - 13,450 - 13,689 - - - - - - - Page 23 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds Chile (Continued) Gorbea Consultant and salary Camp and general Drilling Geophysics Travel Mining rights and fees Assays and sampling Rubi Consultant and salary Camp and general Environmental Geophysics Travel Mining rights and fees Titan (formerly Cindy) Consultant and salary Camp and general Drilling Geophysics Travel Mining rights and fees Assays and sampling Vaquillas Consultant and salary Camp and general Mining rights and fees Value added tax and other taxes paid Generative exploration and administrative Other Projects Year Ended June 30, 2013 Year Ended June 30, 2012 $ $ 49,869 - - - - - - 49,869 54,940 9,255 14,749 364 19,050 149,660 248,018 483,964 227,657 651,772 3,878 84,996 42,262 115,591 1,610,120 36,232 26,282 91,424 153,938 301,887 119,746 35,525 9,756 78,736 14,286 98,493 658,429 - 737 - 32,739 - 149,720 183,196 189,771 28,429 - 24,640 23,092 12,320 1,552 279,804 - - - - 631,778 1,037,997 885,980 325,273 98,763 295,317 Total Exploration and Evaluation Costs $ 8,068,960 $ 11,599,329 Page 24 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds 10. Accounts Payable and Accrued Liabilities Trade payables Accrued liabilities Income tax provision (Note 15) June 30, 2013 1,257,565 $ 676,720 4,123,309 6,057,594 $ June 30, 2012 856,429 128,778 - 985,207 $ $ 11. Related Party Transactions Details of the transactions between the Company’s related parties are disclosed below. a) Trading transactions Certain of the Company’s officers and directors render services to the Company as sole proprietors or through companies in which they are an officer, director, or partner. The following companies are related parties through association of the Company’s directors and officers: Miller Thomson Avisar Chartered Accountants Global Ore Discovery Nature of transactions Legal fees Accounting fees Exploration costs and project management fees The Company incurred the following fees and expenses with related parties: Legal fees Accounting fees Exploration costs Other operating expenses Year ended June 30, 2013 188,240 $ 96,000 869,502 92,170 Year ended June 30, 2012 160,966 86,750 746,795 62,802 1,245,912 $ 1,057,313 $ $ Included in accounts payable and accrued liabilities at June 30, 2013 is an amount of $655,046 (June 30, 2012 - $95,395) owing to directors and officers of the Company and to companies where the directors and officers are principals. Page 25 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds b) Compensation of key management personnel Key management personnel included these persons having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The remuneration of the chief executive officer, vice president of exploration, exploration manager, and the corporate secretary during the years ended June 30, 2013 and 2012 were as follows: Management compensation (i) Management bonus (i) Director’s fees Share bonus (i) and (ii) Share-based payments (iii) $ 2013 414,403 $ 630,720 2,000 768,750 522,586 2012 289,112 - - - 1,736,354 $ 2,338,459 $ 2,025,466 (i) Management compensation and bonuses are included within management fees as disclosed on the consolidated statements of (income) loss and comprehensive (income) loss. (ii) During the year ended June 30, 2013, the Company issued 375,000 common shares of the Company to related parties under its share bonus plan (Note 12). The Common shares were valued at $2.05 per share each. (iii) Share-based payments represent the expense for the years ended June 30, 2013 and 2012. 12. Share Capital Common Shares Authorized: Unlimited number of common shares Private Placement Financing On December 20, 2011, the Company completed a bought deal private placement (“the Offering”) and issued 4,000,000 units at a price of $3.30 per unit for gross proceeds of $13,200,000. Each unit consists of one common share and one-half common share purchase warrant. One whole warrant entitles the holder to purchase a common share of the Company at a price of $4.30 per share expiring on December 20, 2013. The Company allocated $11,435,022 to the common shares and $1,764,978 to the share purchase warrants based upon the relative fair values. The Company paid the underwriters commission consisting of $792,000, equal to 6% of the value of the Offering in cash and issued 200,000 common share purchase warrants with fair value of $250,440. Each warrant entitles the underwriters to purchase one common share at a price of $3.30, expiring on December 20, 2013. Other costs relating to the Offering amounted to $223,313. The warrants’ fair values were based on the following assumptions: Expected dividend yield Expected stock price volatility Risk-free interest rate Expected life of warrants Page 26 2013 - - - - 2012 0.0% 77.62% 0.9% 2 years Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds Share Purchase Options The Company has established a share purchase option plan whereby the board of directors may, from time to time, grant options to directors, officers, employees or consultants. Options granted must be exercised no later than five years from the date of grant or such lesser period as determined by the Company’s board of directors. The exercise price of an option is equal to or greater than the closing market price on the TSX Venture Exchange (“TSX-V”) on the day preceding the date of grant. The vesting terms for each grant are set by the Board of Directors. The option plan provides that the aggregate number of shares reserved for issuance under the plan shall not exceed 10% of the total number of issued and outstanding shares. At June 30, 2013, a total of 4,415,566 options were reserved under the option plan with 3,757,800 options outstanding. a) Movements in share options during the year A summary of the Company’s options, which includes options issued under the Company’s share option plan and agent’s options at June 30, 2013 and the changes for the period are as follows: Options outstanding at June 30, 2011 Granted Exercised Options outstanding at June 30, 2012 Granted Exercised Forfeited Options outstanding as at June 30, 2013 Options exercisable at June 30, 2013 Number of Options 2,892,800 800,000 (20,000) 3,672,800 1,125,000 (955,000) (85,000) 3,757,800 3,757,800 Weighted Average Exercise Price $2.96 $5.23 $0.63 $3.47 $1.42 $0.53 $4.30 $2.99 $2.99 During the year ended June 30, 2013, the Company issued 955,000 common shares on the exercise of share options for gross proceeds of $504,750. These options had an additional fair value of $261,517. On January 19, 2012, the Company announced the amendment of the exercise price of 775,000 incentive share options originally granted on March 23, 2011 from $6.25 per share to $3.32 per share. On October 15, 2012, the Company received approval from the TSX-V for the amendment. In accordance with TSX-V policies, the repricing of options held by officers and directors was approved at the Company’s 2012 Annual General Meeting of shareholders held on December 18, 2012. The incremental estimated fair value of these share options was determined to be $238,433. The fair value of the amended incentive share options, using the Black-Scholes option pricing model, was based on the following weighted average assumptions: Expected dividend yield Expected share price volatility Risk-free interest rate Expected life of options 2013 0.0% 69.3% 1.16% 1.8 years Page 27 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds b) Fair value of share options granted On May 14, 2013, the Company granted options to directors, officers, employees and consultants of the Company to purchase up to 980,000 common shares of the Company at an exercise price of $1.28. The estimated fair value of these share options was determined to be $690,440 using the Black-Scholes option pricing model and the amount is recognized as share-based payments expense in the Company’s statement of (income) loss. On September 26, 2012, the Company granted options to employees and consultants to purchase up to 145,000 common shares of the Company at an exercise price of $2.34. The estimated fair value of these share options determined to be $147,467 using the Black-Scholes option pricing model and the amount is recognized as share-based payments expense in the Company’s statement of (income) loss, using the graded vesting method. During the year ended June 30, 2012, the Company granted options to directors, officers and employees to purchase up to 800,000 common shares of the Company at an exercise price of $5.23. The estimated fair value of these share options was $3,173,883 using the Black-Scholes option pricing model which was recognized as share based payments expense during the year ended June 30, 2012 using the graded vesting method. The fair value of options granted was estimated on the date of the grant using the Black-Scholes option pricing model, with the following weighted average assumptions: Expected dividend yield Expected share price volatility Risk-free interest rate Expected life of options Fair value of options granted (per share option) c) Share options outstanding at the end of the year Year Ended June 31, 2013 0.0% 78.3% 1.17% 3.41 years 0.75 Year Ended June 30, 2012 0.0% 120% 1.92% 3.7 years 3.97 A summary of the Company’s options outstanding as at June 30, 2013 is as follows: Expiry Date May 21, 2014 October 5, 2015 December 16, 2015 March 23, 2016 August 4, 2016 September 26, 2017 May 14, 2018 Exercise price $0.25 $2.90 $5.55 $3.32 $5.23 $2.34 $1.28 Options Outstanding Weighted Avg Remaining Life of Options Options Exercisable 0.89 years 2.27 years 2.46 years 2.73 years 3.10 years 4.24 years 4.87 years 3.25 years 90,000 982,800 55,000 760,000 755,000 135,000 980,000 3,757,800 90,000 982,800 55,000 760,000 755,000 135,000 980,000 3,757,800 Page 28 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds Warrants a) Movements in warrants during the year A summary of the Company’s share purchase warrants and broker warrants at June 30, 2013 and the changes for the year are as follows: Warrants outstanding at June 30, 2011 Issued - private placement warrants Issued - broker warrants Expired Exercised Balance at June 30, 2012 and 2013 b) Warrants outstanding Warrants Outstanding 1,838,500 2,000,000 200,000 (1,500,040) (338,460) 2,200,000 Weighted Average Exercise Price $3.66 $4.30 $3.30 $4.00 $2.29 $4.21 At June 30, 2013, the following warrants are outstanding: Private placement warrants Broker warrants Expiry Date December 20, 2013 December 20, 2013 Exercise Price $4.30 $3.30 Warrants Outstanding 2,000,000 200,000 2,200,000 Share Bonus Plan The Company established a TSX-V approved share bonus plan in 2007. The plan allows issuance of common shares to the directors, officers, employees and consultants with significant contributions to the discovery of an ore body containing at least 500,000 gold equivalent ounces. The Company can issue 500,000 shares for an initial 500,000 ounces of gold and gold equivalent of “Indicated Mineral Resource”, as defined in the NI 43-101, for an individual project, and up to 1,000,000 shares in total on any of the Company’s properties in which the Company retains an interest of at least 20%. During the year ended June 30, 2013, the Company issued 500,000 common shares, valued at $1,025,000 to directors, senior management and consultants under the share bonus plan, 375,000 of these common shares valued at $768,750 were issued to key management personnel (Note 11). Page 29 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds 13. (Earnings) Loss Per Share Earnings (loss) per share, calculated on a basic and diluted basis, is as follows: (Earnings) loss per share Basic Diluted Net (income) loss available to common shareholders – basic Net income (loss) available to common shareholders – diluted Weighted average number of shares outstanding Weighted average number of shares outstanding – basic Dilutive securities: Share options Weighted average number of shares outstanding – diluted For the Year Ended June 30 2013 2012 $ $ $ $ (0.76) $ (0.76) $ (33,157,809) $ (33,157,809) $ 0.40 0.40 16,142,997 16,142,997 43,460,373 39,986,459 430,192 43,890,565 - 39,986,459 For the year ended June 30, 2013, exercisable common equivalent shares totalling 5,012,033 (year ended June 30, 2012 – 5,872,800) consisting of shares issuable on the exercise of share options and share purchase warrants have been excluded from the calculation of diluted earnings per share because the effect is anti-dilutive. 14. Segmented Information The Company’s business consists of a single reportable segment being mineral exploration and development. Details on a geographical basis are as follows: Total Non-Current Assets Canada Argentina Chile June 30, 2013 29,385 2,769,722 199,524 $ 2,998,631 $ June 30, 2012 38,437 2,761,088 33,348 2,832,873 $ $ Page 30 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds 15. Income Taxes The Company is subject to Canadian federal and provincial tax for the estimated assessable profit for the years ended June 30, 2013 and June 30, 2012 at a rate of 25.25% and 25.75% respectively. The Company has assessable profit in Canada for the years ended June 30, 2013 but none for the year ended June 30, 2012. The tax expense at statutory rates for the Company can be reconciled to the reported income taxes per the statement of loss and comprehensive loss as follows: Net income (loss) before income taxes Canadian federal and provincial income tax rates Expected income tax recovery based on the above rates Non-deductible expenses Difference between Canadian and foreign tax rates Tax effect of deferred tax assets for which no tax benefit has been recorded Deferred taxes transferred on sale of subsidiary Foreign exchange and other Total income taxes Represented by: Current income taxes Deferred income taxes Year Ended June 30, 2013 Year Ended June 30, 2012 37,281,118 $ 25.25% (16,142,997) 25.75% 9,413,482 $ (8,392,747) 1,791,570 (4,156,822) 1,759,019 (622,590) 329,914 2,881,414 1,755,421 (774,331) 4,123,309 $ - 138,979 - 4,123,309 $ - 4,123,309 $ - - - $ $ $ $ $ The Canadian Federal and provincial statutory income tax rate decreased to 25.25% due to legislated changes. The Company’s unrecognized deferred tax assets are as follows: Unrecognized deferred income tax assets: Non-capital losses Investments Exploration and evaluation assets Share issue costs Other Total unrecognized deferred income tax assets June 30, 2013 June 30, 2012 $ $ 505,764 1,646,399 5,360,872 233,711 692,579 8,439,325 $ $ 2,091,908 - 5,096,394 318,124 602,985 8,109,411 In assessing the recoverability of deferred tax assets other than deferred tax assets resulting from the initial recognition of assets and liabilities that do not affect accounting or taxable profit, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Page 31 Mirasol Resources Ltd. (An Exploration Stage Company) Notes to Consolidated Financial Statements For the Year Ended June 30, 2013 Canadian Funds Deductible temporary differences, unused tax losses and unused tax credits: Non-capital losses Resource properties Investments Share issue costs Other June 30, 2013 June 30, 2012 Expiry date Range $ 1,583,734 $ 16,859,992 12,664,608 898,888 2,157,315 See below 7,462,108 15,266,038 Not applicable - Not applicable 2014 - 2016 1,272,494 1,801,496 Not applicable During the year ended June 30, 2013, the Company utilized all its Canadian non-capital loss carry-forwards in the amount of $5,929,897 against taxable income. The company has non-capital loss carry-forwards of approximately $1,583,734 that may be available for tax purposes. The loss carry-forwards are principally in respect of Argentine and Chilean operations and expire as follows: 2012 2013 2014 2015 2016 2017 2018 2019 No-expiry Argentina - 227,327 740,164 8,765 10,134 1,717 7,473 256,261 - $ 1,251,841 $ Chile - - - - - - - - 331,893 331,893 16. Subsequent Event i. On September 11, 2013, the Company signed a binding Letter Agreement with First Quantum Minerals Ltd. ("First Quantum") which permits First Quantum to a earn a 55% interest on the Rubi property by expending US $6.5 million over four years and US $1.2 million in staged cash payments. The exploration expenditure commitment during the first year is US $1.5 million. ii. On October 7, 2013, the Company granted 30,000 incentive share options to a consultant. The options are exercisable at $1.18 per common share for the period of three years from the date of grant. Page 32 Form 51-102F1 Management Discussion and Analysis For Mirasol Resources Ltd Introduction The Management Discussion and Analysis (“MD&A”) is prepared as of October 22, 2013 and is intended to supplement Mirasol Resources Ltd.’s (“Mirasol” or the “Company”) consolidated financial statements for the year ended June 30, 2013. All financial information, unless otherwise indicated, has been prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All dollar amounts referenced, unless otherwise indicated, are expressed in Canadian funds. The following discussion of the Company’s financial condition and results of operations should be read in conjunction with its consolidated financial statements and related notes for the year ended June 30, 2013. This section contains forward-looking statements that involve risks and uncertainties. The Company’s actual results may differ materially from those discussed in forward-looking statements as a result of various factors, including those described under “Forward-Looking Information”. Forward-Looking Information This MD&A contains certain forward-looking statements and information relating to Mirasol that are based on the beliefs of its management as well as assumptions made by and information currently available to the Company. When used in this document, the words “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to Mirasol or its management, are intended to identify forward-looking statements. This MD&A contains forward- looking statements relating to, among other things, regulatory compliance, the sufficiency of current working capital, and the estimated cost and availability of funding for the continued exploration and development of the Company’s exploration properties. Such statements reflect the current views of Mirasol with respect to future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievement of the Company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements. Overview Mirasol (TSXV-MRZ) is a precious metals exploration and development company focused on the discovery and acquisition of new, high-potential metals deposits in the Americas. Minera Del Sol S.A., Cabo Sur S.A., Australis S.A., and Nueva Gran Victoria S.A., the Company’s subsidiaries in Argentina, and Minera Mirasol Chile Limitada, the Company’s subsidiary in Chile, currently hold 100% of the rights, or applications in progress, over twenty exploration projects in Patagonia and ten early stage precious metal prospects in northern Chile. The Company offers shareholders access to growth from the early stages, a portfolio of 100%-owned high quality projects in various stages of exploration, and a focus on emerging regions with high potential for discovery. 1 Highlights for the Year Ended June 30, 2013 The Company’s joint venture partner and operator of its Joaquin Project, Coeur Mining Inc. (previous, Coeur d’Alene Mines) (“Coeur”) filed the second National Instrument 43-101 (“NI 43- 101”) Technical Report resource estimate for the Joaquin Silver-Gold Project in Santa Cruz Province, Argentina on August 7, 2012. The resource estimate includes 38.4 million ounces of silver and 39,600 ounces of gold in the Measured and Indicated categories, and 31.3 million ounces of silver and 19,400 ounces of gold in the Inferred category. Coeur held a vested 51% interest in the Joaquin Project since November, 2010. Pursuant to the Company's share bonus plan, approved by the TSX-V in 2007, Mirasol issued 500,000 common shares in relation to the updated resource estimate for the Joaquin silver-gold deposit published in August 2012. The plan allows for issuance of a discovery bonus comprising common shares to the directors, officers, employees, and consultants who made significant contributions to the discovery of an ore body containing at least 500,000 gold equivalent ounces. 375,000 of the 500,000 common shares of the Company were issued to the directors and officers of the Company. On December 21, 2012, the Company sold its remaining 49% interest in the Joaquin Project to Coeur for a total consideration of $59,652,000 (US $60,000,000). One half of the purchase consideration was paid in cash, of which $28,831,815 (US $29,000,015) was received by the Company upon closing of the transactions and the remaining amount of $994,200 (US $1,000,000) was held back for two months by Coeur to cover any potential taxes on transfer of relevant ownership in Argentina. A total of $972,515 (US $925,147) of this amount was received by the Company on July 12, 2013. The remaining one half of the purchase consideration was paid by the issue of 1,310,043 shares of unregistered common stock of Coeur, based upon a 10 day volume-weighted average price of US $22.90 per share. The common shares of Coeur received as partial consideration were restricted from trading as defined under Rule 144 of the United States Securities Act of 1933, for a period of six months, with expired on June 21, 2013. The sale of the Company’s 49% interest in the Joaquin Project to Coeur resulted in the recognition of a pre-tax accounting gain of $58,990,546 during the year. The Company announced initial gold and metal assay results from trenches on its 100%-owned Titan prospect in northern Chile. Surface geochemical results over a 600 x 800 metre area and trench assays showed gold and copper-molybdenum anomalous mineralization related to a gold-bearing high sulphidation epithermal system. The Company conducted a 15 hole, 3,200metre reverse circulation drill program to test several gold targets and covered geophysical targets. Mirasol completed a first-pass metallurgical testing of seven quartz vein shoots at the Virginia vein system. Non-optimized recoveries for higher grade mineralized vein material, using two conventional technologies of agitated leach and flotation, yielded silver recoveries of 75% - 81%, which fall within expected recoveries for similar deposits. Metallurgical testing on lower grade material is continuing. The Company completed a 25 hole, 2,599 metre diamond drill campaign and second phase 1,216 metre trenching program at the Rio Seco prospect at its 100% owned Claudia gold silver project. The Company announced initial surface chip results from its 100% owned Atlas gold-silver project in northern Chile. Surface rock chip samples returned assay results of up to 7.45 grams per tonne gold and 6.39 grams per tonne silver. 2 The Company granted a total of 1,125,000 stock options under its incentive stock option plan to certain employees and consultants during the year. 145,000 incentive stock options are exercisable at $2.34 per common share for a period of five years until September 26, 2017, while 980,000 incentive stock options are exercisable at $1.28 per common share for a period of five years until May 14, 2018. Mr. Borden Putnam III was elected to the Company’s Board of Directors at the Annual and Special meeting held December 18, 2012. The Company modified the terms of incentive stock options, originally granted on March 23, 2011, revising the exercise price to $3.32 from the original price of $6.25 per share, which was subsequently approved by shareholders at the Annual and Special Meeting on December 18, 2012 Effective April 2, 2013, Mr. Douglas B. Silver, the initial independent director of the Company resigned from the Company’s board of directors to pursue his primary business commitments. Highlights Subsequent to the Year Ended June 30, 2013 On September 11, 2013, the Company signed a binding Letter Agreement with First Quantum Minerals Ltd. ("First Quantum") which permits First Quantum to a earn a 55% interest on the Rubi property by expending US $6.5 million over four years and US $1.2 million in staged cash payments. The exploration expenditure commitment during the first year is US $1.5 million which will include conducting a magnetic survey of the claims and 3,000m of drilling. After earn- in, First Quantum’s participating interest may be increased to 65% on completing an NI 43-101 compliant resource estimate and preliminary economic assessment on a minimum size resource of one million tonnes of contained Cu. First Quantum may further increase its interest to 75% by declaring a “decision to mine” and providing mine financing at commercial terms if requested by Mirasol. Financing terms include interest calculated at LIBOR + 4% and repayment of Mirasol’s proportional mine finance from 50% cash flow. On October 7, 2013, the Company granted 30,000 stock options under its incentive stock option plan to a consultant. The options are exercisable at $1.18 per common share for a period of three years until October 7, 2016 Activities on Mineral Projects Activities during the year ended June 30, 2013 were focused on exploration activities on the Company’s gold-silver prospects and acquisition evaluations in Santa Cruz Province, Argentina, and northern Chile. The Company carries out “grass-roots” exploration for gold and silver in Argentina, Chile, and elsewhere in the Americas. Properties are advanced through exploration to bring the projects to a stage where the Company can attract the participation of major resource companies having the expertise and financial capability to take such properties to commercial production. At present, Mirasol has an option agreement with First Quantum to earn 55% interest in the Company’s Rubi property. Mirasol holds a 100% interest in all other properties. The Company plans to undertake joint ventures on several properties in Argentina. In addition, the Company has progressed its generative and reconnaissance precious metals exploration program in northern Chile. 3 Generative Exploration Generative exploration is a key strategy employed by Mirasol for identifying and acquiring new prospects. To identify and capitalize on a good quality prospect, experienced professionals are needed to ensure that the right opportunity is taken at the right time. Costs of generative exploration are those costs not attributable to a specific Mirasol project. When Mirasol defines a project as a distinct exploration target, it is then accounted for as a separate project. Costs of generative exploration totalled $11,554 for the year ended June 30, 2013 (2012 - $98,763), a decrease of $87,209 from costs incurred in the prior year due to the Company’s exploration focus on specific projects in the current fiscal year. Exploration activities in Chile and Argentina are managed from the Company’s Mendoza, Argentina exploration office. Legal and logistical matters in Chile are managed from Santiago, Chile. Rubi Property, Chile The Rubi copper property in northern Chile, covering more than 14,000 hectares, is strategically located 22 km southwest of, and adjacent to, El Salvador, one of Chile’s giant porphyry-copper producing districts, operated by Codelco, the Chilean state mining company. The Rubi property was staked in December 2006 and in 2008 was enlarged, and is located in the Eocene- Oligocene metallogenic belt which hosts some of the world’s largest porphyry copper deposits. During 2008, Mirasol consolidated its mineral land position at Rubi and conducted additional detailed mapping, sampling and re-interpretation of the area’s geology. An altered and mineralized lithocap (the “Lithocap prospect”) returned copper and gold anomalies in surface and stream sediment samples and indicate the potential for a porphyry copper (gold) system to exist under partial gravel cover (News release dated June 12, 2007). The Portezuelo prospect is an outcropping copper mineralized stockwork and vein system with drill-ready targets. The Rubi property has been brought through "mensura", the most secure mineral property stage. On September 11, 2013, the Company signed a binding Letter Agreement with First Quantum Minerals Ltd. ("First Quantum") which permits First Quantum to a earn a 55% interest on the Rubi property by expending US $6.5 million over four years and US $1.2 million in staged cash payments. The exploration expenditure commitment during the first year is US $1.5 million to include a magnetic survey of the claims and 3,000m of drilling. After earn-in, First Quantum’s participating interest may be increased to 65% on completing an NI 43-101 compliant resource estimate and preliminary economic assessment on a minimum size resource of one million tonnes of contained Cu. First Quantum may further increase its interest to 75% by declaring a “decision to mine” and providing mine financing at commercial terms if requested by Mirasol. Financing terms include interest calculated at LIBOR + 4% and repayment of Mirasol’s proportional mine finance from 50% cash flow. Titan Property, Chile The Titan property is 100% held and was staked by the Company as part of its Miocene Arc exploration program and comprises 5500 hectares. Mirasol conducted surface trenching and published rock chip channel trench geochemical results on January 21, 2013, as part of its first pass exploration. Initial reconnaissance samples from the project returned assays up to 1.60 g/t gold from outcrops and small hand-dug pits. Mirasol also completed a 3,285 metre mechanical trenching program which defined a surface gold anomaly at Titan in excess of 700 metres by 660 metres wide. Uncut assays from the trenches defined multiple intervals in-excess of 100 metres in 4 length of anomalous gold mineralization, with the best interval being 194 metres at 0.41 g/t gold. Applying a 0.1 g/t gold cut-off to these results, returned better intervals of 132 metres at 0.55 g/t gold, 80 metres at 0.56 g/t gold, 24 metres at 0.95 g/t gold and 10 metres at 2.93 g/t gold. Mirasol completed a 17.2 square kilometre high-resolution ground magnetic survey and a 26.6 line-kilometre pole-dipole (PDP) induced polarization (IP) electrical geophysical grid at the project (news release March 1, 2013). Results from these ground geophysical surveys are consistent with the Company's geological concept and model of an epithermal gold-bearing zone positioned over a postulated mineralized intrusion at depth. Such systems are known to host economic precious and base metals mineralization elsewhere in the area. During the year ended June 30, 2013, the Company completed a 3,200 metre reverse circulation drill program at Titan to test oxide gold targets and covered geophysical targets, with results pending. This drill program confirmed the presence of a gold-mineralized high- sulphidation epithermal system at Titan. Atlas Property, Chile The Atlas property is 100% owned, 7,500 hectare gold-silver property, located adjacent to the Company’s Titan gold project in the Miocene-aged volcanic belt of northern Chile. Mineralization at Atlas is related to a large gold-silver bearing, high-sulphidation epithermal alteration system. This type of system hosts large, profitable mines in the Miocene-aged mineral belt of Chile; including Kinross's La Coipa high sulphidation silver-gold mine (located 150 km south of Atlas and Titan). Two separate areas of at surface precious metal mineralization have been identified to date within the Atlas project: the Atlas Gold Zone (“AGZ”) and the Atlas Silver Zone (“ASZ”) where AGZ is located 2 km north of ASZ. Five trenches have been completed at these prospects as a partial test of rock chip gold and silver anomalies. Preliminary geological interpretation of the results obtained suggests that mineralized zones at AGZ and ASZ extend under thin cover beyond the limit of current trenching. The distribution of gold-silver anomalous surface rock chips highlight other targets in the AGZ and ASZ prospects that warrant trenching to test for additional mineralization. PIMA (hand held mineral spectrometer) analysis of the mineralized trench samples shows an advanced argillic alteration assemblage typical of high sulphidation epithermal precious metal systems. Mirasol is planning a 2013-2014 southern hemisphere summer exploration program at Atlas, aimed at testing for extensions to the AGZ and ASZ anomalies, which will include geochemical sampling of known prospects and reconnaissance of the previously unexplored parts of the extensive Atlas alteration system. Chile Portfolio Properties Mirasol staked nine properties in an underexplored region of northern Chile during 2010 – 2012, including the Titan and Atlas properties. The new Chile gold exploration portfolio properties comprise a total of 20,500 hectares of 100%-held first-tier concession rights. In 2012-2013, Mirasol’s exploration focused on systematic in-house reconnaissance mapping, sampling and geophysical surveys (IP and ground magnetics). Several early stage properties have been mapped and sampled, with accompanying reconnaissance geophysics to focus future exploration efforts. 5 Joaquin Property, Argentina The Joaquin Property is located in the central part of Santa Cruz Province and comprises exploration “cateos”1 and “manifestaciones de descubrimiento”2. The Joaquin Project was part of the 2006 joint venture with Coeur; the project operator. A second resource was announced on August 7, 2012 and a NI 43-101 Technical Report was published on September 21, 2012 on www.sedar.com. The new resource comprises: August 7, 2012 Resources Joaquin Project Totals Mineral Type and Category Tonnes (000) Silver g/t Silver oz. (000) Gold g/t Gold oz. Total of Oxides & Sulphides Measured 103.1 5,600 Indicated 96.8 34,600 97.6 39,600 Meas. + Indic. 19,400 123.7 Inferred Mineral resources that are not mineral reserves have not demonstrated economic viability. Due to rounding of insignificant figures as required by best practices, sums of tonnes and ounces may not appear to total correctly. 5,500 33,000 38,400 31,300 1,650 10,600 12,300 7,900 0.11 0.10 0.10 0.07  Metal prices used were US$30 /oz. Ag and US$1,300 /oz. Au. Only silver mineralization was included in the in-pit calculation.  Oxide mineral resources estimated using a cut-off grade of 33 g/t Ag Eq and sulphide mineral resources with a cut-off of 51.9 g/t Ag Eq. within Whittle® surface mine designs. Ag Eq (silver equivalent) = Ag grade in grams per tonne + Au grade in grams per tonne x 65.   Mineral resources estimated by the consulting firm of NCL Ingeniería y Construcción Ltda. in Santiago, Chile.  Mineral resources that are not mineral reserves have not demonstrated economic viability. On December 21, 2012, the Company sold its remaining 49% interest in the Joaquin Project to Coeur for a consideration of US $60,000,000. One half of the purchase consideration was paid in cash (US $29,000,015 with US $1,000,000 holdback) and the balance was paid by the issue of 1,310,043 shares of unregistered common stock in the capital of Coeur, based upon a 10 day volume-weighted average price of US $22.90 per share. Mirasol has no further ownership in the Joaquin Project. Virginia Project, Santa Rita Property, Argentina The Santa Rita property comprises “manifestaciones de descubrimiento” and exploration “cateos”, located in the northwestern sector of the Deseado Massif volcanic terrain. During fiscal 2010, a new, high grade, silver vein zone was discovered at the Santa Rita property, named the Virginia zone. On January 6, 2010, the Company reported initial results from 30 chip samples taken over a two kilometre length of the Julia Vein sector. The average silver grade of the initial 30 chip samples was 645 grams/tonne (“g/t”) silver from the Julia Vein. On February 16, 2010, Mirasol reported assays ranging up to 3,170 g/t silver from rock chip sampling of the Julia vein and surrounding veins. Sawn channel samples (March 4, 2010) from all 58 Julia vein channels averaged 805 g/t silver. Ground geophysical surveys, including ground magnetic and gradient array IP were completed. 1 “Cateo” is the initial stage of exploration mineral property which can be staked in Argentina. The maximum size of an individual cateo is 10 km by 10 km. 2 “Manifestacion de descubrimiento”, or simply “M.D.” is the second level of mineral property in Argentina, after Cateo, and must be registered with a “discovery” location. An M.D. may be converted into the third level, "mina" on completion of certain requirements. 6 Additional press releases in May and June, 2010, confirmed significant silver values from additional veins parallel and surrounding the Julia vein called the Ely, Naty, Margarita and Roxane veins. Outlying veins were discovered east and northwest of the principal vein zone. The Virginia discovery has more than 9 kilometres of exposed or interpreted vein length. Drilling in 2010 through mid-2011 systematically tested 1,780 metres of strike length of the 9,600 metres length of veining outlined at the Virginia Silver District, totaling 9,266 metres of diamond drilling in 117 holes. Drilling defined four silver deposits at Julia North, Julia Central, Julia South and Naty Vein with potentially economic silver grades and widths, at a nominal drill spacing of 50 by 50 metres or closer. Mirasol re-drilled a total of 22 holes to improve percentage core recovery. Results from the final 14 re-drilled holes included significant silver intersections with excellent core recovery, among them hole VG-6A containing 24.27 metres of 326 g/t silver with 96 percent core recovery, including 5.48 metres of 1,038 g/t silver with 98 percent recovery from the Julia North deposit. At Julia Central, VG-50A contains 28.25 metres of 220 g/t silver with 98 percent recovery including 18.11 metres of 303 g/t silver with 96% recovery. In addition, encouraging intersections from scout holes drilled at Naty Extension, Ely South and Martina (news release July 18, 2011) indicated several zones with a high priority for follow-up drilling. In October 2011, the Company commenced a new season of diamond drilling with the focus to test new veins, vein extensions, and expand the project’s resource potential for additional shallow oxide silver deposits. The 2011-2012 programs expand drilling in the areas successfully tested by scout holes. Highlights (news release January 26, 2012) at Naty Extension included 1.5 metres of 797 g/t silver in VG-096 and 2.0 metres of 214 g/t silver including 0.3 metres of 1,195 g/t silver in VG-097. Martina vein highlights included 3.8 metres of 155 g/t silver within a broad intercept of 25.4 metres grading 61 g/t silver in VG-119B, and 10.9 metres of 63 g/t silver, including 1.1 metres of 141 g/t silver, in VG-122A. Ely South highlights include 21.8 metres of 79 g/t silver including 1.9 metres of 495 g/t silver in VG-113, and 18.2 metres of 63 g/t silver including 4.5 metres of 109 g/t silver in VG-111. VG-127 intersected 26.9 metres, with an estimated true thickness of 15.0 metres, containing 135 g/t silver, which included 1.19 metres of 1,760 g/t silver. VG-138 contains 28.0 metres with an interpreted true thickness of 18.4 metres, grading 195 g/t silver, including 4.6 metres of 493 g/t silver. Final results from Phase IV drilling were published on June 25, 2012. On February 7, 2013, Mirasol announced the results of first-pass metallurgical testing of seven quartz vein shoots at the Virginia vein system. Non-optimized recoveries for higher grade mineralized vein material, using two conventional technologies of agitated leach and flotation, yielded silver recoveries of 75% - 81%, which fall within expected recoveries for similar deposits. Metallurgical testing on lower grade material is continuing. In 2013, Mirasol undertook regional reconnaissance of the Virginia - Santa Rita property utilizing mapping and geophysical technology to successfully identify additional prospective targets on the property. Claudia Property, Argentina The large Claudia Property comprises exploration “cateos” located in the south-central part of Santa Cruz Province, beginning at the limit with, and for approximately 30 km south of AngloGold Ashanti’s producing Cerro Vanguardia gold-silver mine. Initial reconnaissance assay results from systematic channel sampling returned values reaching 3.28 g/t gold with 15.33 g/t silver over 1.7 metres, and individual vein results up to 14.2 g/t Au with 229 g/t Ag over 0.7 metres were obtained in the “J vein” sector of the Rio Seco Zone. (Further Claudia Project news was published dated on August 3, 2006, November 1, 2007, January 8, 2009, and June 1, 2009). 7 Mirasol signed a joint venture agreement with Hochschild Mining Group in February 2007, who completed 3,871 metres of core drilling by December 2007, and 3,011 metres of reverse circulation drilling in December 2008. Drilling was designed to test both outcropping Cerro Vanguardia-style quartz veins and covered geophysical targets. Although multiple mineralized targets were intersected, on April 7, 2009 Hochschild returned 100% of the property to the Company. The Company’s 2011-2012 exploration at Claudia focused on four separate prospects: the Laguna Blanca, Ailen, the 15 kilometre Curahue Trend in the west, and the Rio Seco vein zone in the east. At Rio Seco, Mirasol completed geological mapping, rock chip sampling, excavation of more than 53 trenches, a 10.7 square kilometre gradient array IP geophysical survey, and 11.1 line kilometres of pole-dipole IP geophysics (news release March 5, 2012). Rock chip assays returned up to 20.1 g/t gold and 34 g/t silver, and saw-cut channel and trench sample composites returned 0.7 metres at 13.9 g/t gold and 229 g/t silver, and 10.5 metres of 1.9 g/t gold and 22 g/t silver from mineralized zones. A geophysical survey at the Curahue prospect (news release April 18, 2012) defined a 10 km long zone which hosts epithermal cobbles in an alluvial terrace that partially covers the zone, which returned assays up to 2.0 g/t gold and 213.0g/t silver. Trenching in this zone geophysical anomalies, and returned assays up to 0.9 metres at 4.7 g/t gold with 120.0 g/t silver from veins in bedrock, and up to 26 metres at 0.45 g/t gold and 1.9 g/t silver from a veinlet zone. A 25 hole, 2,599 metre diamond drill campaign was carried out at the Rio Seco Zone in May 2012, and targeted gold-silver anomalies exposed in shallow trenches and in vein outcrop and float material (news release March 4, 2013). Nine of the 25 diamond drill holes returned anomalous gold and silver assays. Better drill results included individual assays of up to 0.83 metres at 6.59 g/t gold and 139.3 g/t silver (9.12 g/t gold equivalent) and broad intersections of anomalous gold and silver up to 15.3 metres of 0.29 g/t gold and 50.9 g/t. The majority of the anomalous drill results are clustered around the structural intersection of the “Loma Alta Trend” and the “Rio Seco Main” veins Phase 2 trenching program completed in 2013 at Rio Seco totalling 1,216 metres in 31 trenches (news release March 4, 2013). Trenching successfully extended the Loma Alta vein trend for an additional 900 metres to the southwest for 3 kilometres total length, and returned assays of up to 6.9 g/t gold and up to 448 g/t silver, which defined multiple new drill targets. The Curahue, Curahue West and Ailen zones were significantly expanded during 2013. Additional IP geophysical surveys, mapping and trenching indicate additional vein systems occur at these targets. Espejo Property, Argentina The Espejo property was staked in April 2006 and adjoins Pan American Silver’s Manantial Espejo silver-gold mine to the south and southeast, and hosts the on-strike extension of structures. . Exploration work includes remote sensing (satellite image) interpretation, ground magnetic survey, gradient array IP geophysical survey, and geochemical sampling which define multiple coincident resistive and conductive geophysical anomalies on strike with the principal vein structures under development and production at the Manantial Espejo mine. Additional exploration cateos were staked in 2008 which expand the property to the south (news release June 26, 2008). An exploration option agreement on October 4, 2012 with Pan American Silver provided for an option Pan American Silver to earn a 51% interest in the property by expending US$4 million over four years, to reach a 61% interest by completing a NI 43-101 compliant feasibility study, 8 and then to further increase the interest to 70% by providing mine financing at commercial terms. During the year ended June 30, 2013, Pan American Silver initiated drilling on the property, however the joint venture option was terminated in July 2013 due to budget constraints. La Curva Property, Argentina The La Curva property, comprises four exploration cateos, is located in the eastern Deseado Massif and has year round access from the paved national highway and secondary roads. In 2013, surface mapping, geophysical surveys and systematic geochemical sampling define rhyolitic domes and two gold-anomalous targets on the east side with associated gold-bearing quartz veins. The two principal targets include the Loma Arthur vein-dome system and Cerro Chato, which hosts gold-rich veins and silicified breccias (news releases of April 1, 2008 and February 24, 2009). During 2013, exploration focused on the western part of the property where gold and pathfinder element geochemical anomalies and defined several new gold-anomalous targets. Ground magnetic and IP geophysical surveys support interpretation leading to discovery of multiple new gold-anomalous dome targets. The La Curva property is available for joint venture. Sascha Property, Argentina The Sascha property hosts a gold and silver mineralized epithermal quartz vein system of low- sulphidation style which comprises four cateos and two “manifestaciones de descubrimiento”. The Sascha property was initially included in the Coeur joint venture signed in 2006. In 2007 Coeur completed 19 diamond drill holes totaling approximately 2,500 metres and in October 2008 tested the northwest extension of the Sascha Main mineralized vein structure. Coeur returned the property to Mirasol on October 31, 2008. All environmental reclamation requirements have been completed. Additional mapping and new interpretation of the drill results have defined a number of new prospective exploration targets at Sascha. The Sascha Property is available for joint venture. Nico Property, Argentina The Nico property was initially staked in 2004 and expanded in 2005 and 2006. The mineral property is held as “manifestaciones de descubrimiento” and is located 40 km north of Coeur’s Martha silver mine, and crosses a provincial highway. The central mineralized zone at Nico hosts a north-south trend of quartz veinlets and breccia and exhibits a silver-gold-polymetallic anomaly. The Nico main mineralized zone extends as a traceable geophysical structure for 2.5 km in length. During the 2007-2008, a prospect-scale ground magnetic survey and gradient array IP geophysical survey were completed over key targets. New geophysical interpretation identified a felsic dome field which has not been drill tested. On February 12, 2009, the Company signed an exploration option agreement with Coeur for the exploration of the Nico gold-silver project to earn an initial 55% in the project by expending a total of US$2,300,000 on exploration over four years and making cash payments totaling US $250,000 (press release of February 12, 2009). Coeur drilled eleven shallow diamond holes in late 2009 at the Nico Main target and reported best results of 8.23 metres containing 0.43 g/t gold and 27 grams silver, including 1.25 metres of 2.21 g/t gold and 200 g/t silver in DDH-11. Coeur returned the Nico property to Mirasol in January 2010, and it is available for joint venture. 9 La Libanesa Property, Argentina The La Libanesa property hosts a hydrothermal breccia hill, “Cerro Plomo”, which contains high grade lead-silver-gold anomalies. Cerro Plomo is hosted in a unique rhombic structural block and is associated with radial dikes and peripheral gold-bearing veins. La Libanesa was staked in 2006 and the property was expanded to five cateos during 2007. Trenching, geochemical sampling, mapping, and a Mobile Metal Ion (“MMI”) geochemical survey have been completed with a regional interpretation of La Libanesa’s unique geological setting. In 2010, an AMT ground geophysical survey identified a strong resistive feature near Cerro Plomo. An MMI soil survey identified an extended area reaching at least 400 metres east and west of Cerro Plomo which show highly elevated base metals with silver and gold anomalies (News release dated February 24, 2009). Gold-silver bearing quartz vein material has been mapped which forms a radial distribution around Cerro Plomo. The Libanesa property is available for joint venture. Other Properties Mirasol holds a number of early stage exploration properties which are prospective for gold and/or silver mineralization in southern Argentina and northern Chile. Mirasol’s Results of Operations For the Year Ended June 30, 2013 as compared to the Year Ended June 30, 2012 The Company’s net income for the year ended June 30, 2013 (“Current Year”) was $33,157,809 or $0.76 per share (Basic and Diluted) compared to a net loss of $16,142,997 or $0.40 per share (Basic and Diluted) for the year ended June 30, 2012 (“Comparative Year”). The net income generated in the year is attributable to the gain recorded on the sale of the Joaquin Project. The Company reached an agreement with Coeur during the Current Year to sell its 49% interest in the Joaquin Project, through the sale of its 100%-owned Argentine subsidiary holding the interest in the Project, for $59,652,000 (US $60,000,000). The proceeds, netted against the transaction costs and working capital deficiency of the Company’s subsidiary disposed of, for a total of $661,454, resulted in an accounting gain of $58,990,546. The Company did not have any acquisition costs capitalized for the Joaquin Project. $29,825,985 of the purchase price was paid by Coeur with 1,310,043 shares of its common stock, which were classified by the Company as financial instruments at fair value through profit or loss. These shares were valued at $18,315,659 on June 30, 2013 with loss of $12,664,608 attributed to the decrease in fair value and a gain of $1,154,282 to foreign exchange in the Current Year. The Company also incurred lower share-based payments expense ($1,065,617 in the Current Year compared to $3,345,027 during the Comparative Year) as a result of significantly more incentive stock options granted with higher fair values during the year ended June 30, 2012. The Company’s exploration costs also decreased in the Current Year to $8,068,960 compared to $11,599,329 in the Comparative Year, a decrease of $3,530,369. These costs were higher in the Comparative Year as the Company commenced a new diamond drilling season on its Virginia Project, where majority of the resources were expended during the year ended June 30, 2012. During the Current Year, the Company increased its non-drilling exploration expenditure in Chile and continued its exploration on its Claudia Project, La Curva Project and the Virginia Project in Argentina. Also during the Current Year, the Company recognized a foreign exchange gain of $2,955,515 compared to a loss of $197,870 in the Comparative Year, primarily due to 10 the strengthening of the US dollar and the Company’s higher investment in US dollar denominated financial assets (primarily cash held in US funds and Coeur shares) during the Current Year. The additional income and a lower loss above were offset by an increase in management fees during the Current Year of $1,816,700 ($2,101,022 compared to $284,322 during the year ended June 30, 2012). The increase pertained to the issuance of common shares by the Company under its share bonus plan to management, including certain directors, for their significant contributions in the discovery of a deposit of more than 500,000 gold equivalent ounces at the Joaquin Project and a bonus to senior management with significant contributions in effecting the sale of the Joaquin Project to Coeur. The Company issued 500,000 shares of its common stock, valued at $2.05 per share under the plan for a total value of $1,025,000, and accrued a bonus of $630,720 (US $600,000), respectively. The Company also recorded an estimated income tax expense of $4,123,309 in the Current Year, being a provision for estimated corporate income tax payable on the Company’s 2013 taxable income. All other costs remained consistent with those incurred during the year ended June 30, 2012. For the Three Months Ended June 30, 2013 as compared to the Three Months Ended June 30, 2012 The Company’s net loss for the three month period ended June 30, 2013 (“Current Quarter”) was $9,934,313 or $0.22 per share compared to a net loss of $3,537,826 or $0.08 per share for the three month period ended June 30, 2012 (“Comparative Quarter”), an increase in net loss of $6,396,487. The increase in loss is primarily attributable to the change in market value of Coeur’s common shares, acquired by the Company in conjunction with the sale of its 49% interest in the Joaquin Project during the year ended June 30, 2013. The Company received 1,310,043 shares of common stock of Coeur as partial consideration of the sale. The common shares of Coeur, designated as financial instruments held at fair value through profit or loss, were marked to their market value on June 30, 2013 and the resultant loss of $7,397,468 was recorded in the Company’ statement of income/loss and comprehensive income/loss. The Company’s management fees increased during the Current Quarter by $655,710 ($740,290 compared to $84,580 during the Comparative Quarter) as a result of additional bonus to senior management for their contributions in connection with the sale of the Joaquin Project to Coeur. The Company also recorded an additional share-based payments expense of $679,718 primarily attributable to the estimated fair value of the 980,000 incentive stock options granted during the Current Quarter. The above increase in costs was offset by a decrease in the Company’s exploration costs in the Current Quarter of $321,223 ($2,929,263 compared to $3,250,486 in the Comparative Quarter) These costs were higher in the Comparative Quarter as the Company commenced a new diamond drilling season during fiscal 2012 on its Virginia Project, where majority of the resources were expended during the period. During the Current Quarter, the Company shifted its non-drilling exploration focus to its projects in Chile, namely Titan. Also during the Current Quarter, the Company recognized a foreign exchange gain of $1,447,724 compared to a gain of $21,296 in the Comparative Quarter, primarily due to the Company’s increased investment in US dollar denominated financial assets (primarily cash held in US funds and Coeur shares). The Company also revised its estimated income tax liability in the Current Quarter which reduced the net loss by a further 576,691. 11 All other costs remained consistent with those incurred during the three months ended June 30, 2012. Selected Annual Information The following table sets out selected annual financial information of the Company and is derived from the Company’s consolidated financial statements for the years ended June 30, 2013, 2012 and 2011. Sales Income (loss) for the Period Earnings (loss) per Share - Basic $ $ $ Earnings (loss) per Share - Diluted $ Total Assets Total Long-term Liabilities Dividends Declared $ $ $ Summary of Quarterly Results 2013 2012 2011 - $ - $ - 33,157,809 $ (16,142,997) $ (12,734,165) 0.76 $ 0.76 $ (0.40) $ (0.40) $ (0.35) (0.35) 51,712,505 $ 10,888,209 $ 10,509,892 - $ NIL $ - $ NIL $ - NIL The following table sets out selected unaudited quarterly financial information of Mirasol and is derived from unaudited quarterly consolidated financial statements prepared by management in accordance with IAS 34 and accounting policies consistent with IFRS. Period 4th Quarter 2013 3rd Quarter 2013 2nd Quarter 2013 1st Quarter 2013 4th Quarter 2012 3rd Quarter 2012 2nd Quarter 2012 1st Quarter 2012 Revenues $ Nil Nil Nil Nil Nil Nil Nil Nil Income (Loss) from Continued Operations $ (9,934,313) (7,453,050) 52,371,426 (1,826,254) (3,537,826) (4,697,002) (3,971,464) (3,936,705) Basic Income (Loss) per Share from Continued Operations $ (0.22) (0.17) 1.22 (0.04) (0.08) (0.11) (0.10) (0.10) Diluted Income (Loss) per Share from Continued Operations $ (0.22) (0.17) 1.20 (0.04) (0.08) (0.11) (0.10) (0.10) Quarterly results will vary in accordance with the Company’s exploration, investing and financing activities. 12 Liquidity The Company’s net working capital as at June 30, 2013 was $42,656,280 compared to a net working capital of $7,070,129 at June 30, 2012. The cash and short-term investment and current receivable and advances balances at June 30, 2013 were $30,398,215 compared to $8,055,336 at June 30, 2012. As at June 30, 2013 current liabilities were $6,057,594 compared to $985,207 at June 30, 2012. On October 22, 2013, the Company has 44,155,661 shares issued and outstanding. The Company also has 3,757,800 stock options, 2,000,000 private placement warrants and 200,000 Underwriters’ warrants outstanding with a weighted average exercise price of $2.99, $4.30 and $3.30, respectively, which if were exercised in total, would allow the Company to raise approximately $26.80 million. Investing Activities During the year ended June 30, 2013, the Company received $28,831,815 (net of holdback of $994,200 (US $1,000,000) from sale of its 49% interest in the Joaquin Project. Other investing activities consisted of the purchase of surface rights overlaying its Virginia project in Argentina and purchase of mineral rights overlaying the Atlas (formerly Akira) property in Chile for a total cash outlay of $208,212, funds invested in short-term deposits of $1,415,928 and also a purchase of exploration equipment worth $25,462.The cash outlay for the purchase of Virginia surface rights totaled $2,480,198 during the year ended June 30, 2012 and the Company also expended $118,091 for purchase of exploration equipment during the Comparative Year. The funds invested in short-term deposits of $997,830 during the year ended June 30, 2012 were redeemed during the Current Year. The Company received interest from its funds held in banks of $34,047 during the Current Year (2012 - $29,733). Also during the year ended June 30, 2013, in addition to the cash proceeds, the Company received common shares of Coeur worth $29,825,985 in conjunction with the sale of its 49% interest in the Joaquin project, for a total purchase price of $59,652,000. The fair value of the common shares of Coeur was determined to be $18,315,659 on June 30, 2013. Financing Activities During the year ended June 30, 2013, the Company received cash proceeds of $504,750 from exercise of 955,000 incentive stock options. The Company also issued 500,000 shares of its common stock as a discovery bonus to management, including certain directors, under its share bonus plan. During the year ended June 30, 2012, the Company closed a bought deal private placement with underwriters and issued 4,000,000 units of the Company at a price of $3.30 per unit for aggregate gross proceeds of $13,200,000. The Company paid the underwriters cash commission of $792,000 and issued 200,000 common share purchase warrants for purchase of common shares of the Company at a price of $3.30 per share. Total cost incurred by the Company in relation to the private placement was $1,015,313, inclusive of cash commission fee to the underwriters. The Company also received cash proceeds of $786,426 from exercise of certain outstanding incentive stock options (20,000) and warrants (338,460). 13 Capital Resources The Company has no operations that generate cash flow and its long term financial success is dependent on management’s ability to discover economically viable mineral deposits. The mineral exploration process can take many years and is subject to factors that are beyond the Company’s control. In order to finance the Company’s exploration programs and to cover administrative and overhead expenses, the Company primarily raises money through equity sales and from the exercise of convertible securities (share purchase options and warrants). Many factors influence the Company’s ability to raise funds, including the health of the resource market, the climate for mineral exploration investment, the Company’s track record and the experience and calibre of its management. With working capital of $42,656,280, the Company believes it has sufficient funds to meet its administrative, corporate development and discretionary exploration activities over the next twelve months. Actual funding requirements may vary from those planned due to a number of factors. The Company believes it will be able to raise equity capital as required in the long term but recognizes there will be risks involved that may be beyond its control. Off-Balance Sheet Arrangements The Company has no significant off-balance sheet arrangements. Transactions with Related Parties Details of the transactions between the Company’s related parties are disclosed below. Trading transactions Certain of the Company’s officers and directors render services to the Company as sole proprietors or through companies in which they are an officer, director, or partner. The following companies are related parties through association of the Company’s directors and officers: Miller Thomson Avisar Chartered Accountants Global Ore Discovery Nature of transactions Legal fees Accounting fees Exploration costs and project management fees During the year, the Company incurred the following fees and expenses with related parties Legal fees Accounting fees Exploration costs Other operating expenses 2013 188,240 $ 96,000 869,502 92,170 1,245,912 $ 2012 160,966 86,750 746,795 62,802 1,057,313 $ $ 14 Included in accounts payable and accrued liabilities at June 30, 2013 is an amount of $655,046 (June 30, 2012 - $95,395) owing to directors and officers of the Company and to companies where the directors and officers are principal. Compensation of key management personnel Key management personnel include people having the authority and responsibility for planning, directing, and controlling the activities of the Company as a whole. The remuneration of the chief executive officer, vice president of exploration, exploration manager, and the corporate secretary during the years ended June 30, 2013 and 2012 were as follows: Management compensation Management bonus Director’s fees Share bonus Share-based payments Significant Accounting Policies 2013 414,403 $ 630,720 2,000 768,750 522,586 2,338,459 $ 2012 289,112 - - - 1,736,354 2,025,466 $ $ The details of the Company’s accounting policies are presented in Note 3 of the Company’s consolidated financial statements for the year ended June 30, 2013. The following policies are considered by management to be essential to the understanding of the processes and reasoning that go into the preparation of the Company’s financial statements and the uncertainties that could have a bearing on its financial results. Exploration and Evaluation Assets The Company capitalizes the direct costs of acquiring mineral property interests. Option payments are considered acquisition costs if the Company has the intention of exercising the underlying option. Exploration and evaluation costs are charged to operations in the period incurred until such time as it has been determined that a property has economically recoverable reserves, in which case subsequent exploration and development costs are capitalized. Exploration costs include value- added taxes because the recoverability of these amounts is uncertain. 15 Recent Accounting Pronouncements Certain new standards, interpretations, amendments and improvements to existing standards were issued by the International Accounting Standards Board (“IASB”) or International Financial Reporting Interpretations Committee (“IFRIC”). The new standards, amendments to standards and interpretations that been issued and that are applicable to the Company but not effective during the ended June 30, 2013 are as follows: a) IFRS 7 Disclosures: Transfers of Financial Assets (Amendment) has been amended to enhance disclosures for financial assets. These disclosures relate to assets transferred (as defined under IAS 39 Financial Instruments: Recognition and Measurement (“IAS 39”)). If the assets transferred are not derecognized entirely in the financial statements, an entity has to disclose information that enables users of financial statements to understand the relationship between those assets which are not derecognized and their associated liabilities. If those assets are derecognized entirely, but the entity retains a continuing involvement, disclosures have to be provided that enable users of financial statements to evaluate the nature of, and risks associated with, the entity’s continuing involvement in those derecognized assets. The standard has an effective date of January 1, 2013 with early adoption permitted. The Company does not anticipate that this amendment will have a significant impact on its financial statements. b) IFRS 9 Financial Instruments: Classification and Measurement is the first part of a new standard on classification and measurement of financial assets that will replace IAS 39. IFRS 9 has two measurement categories: depreciated cost and fair value. All equity instruments are measured at fair value. A debt instrument is recorded at depreciated cost only if the entity is holding the instrument to collect contractual cash flows and the cash flows represent principal and interest. Otherwise it is recorded at fair value through profit or loss. The effective date for the amendment is January 1, 2015 and is applied retrospectively. Early application is permitted. The Company is currently evaluating the impact of this standard. c) IFRS 10 Consolidated Financial Statements replaces IAS 27, Consolidated and Separate Financial Statements, and requires all controlled entities to be consolidated based on a single control model, whereby control is defined as the exposure to, or having rights to, returns from its involvement in its investee, and the ability to affect those returns through is power over the investee. The standard has an effective date of January 1, 2013 with early adoption permitted. The Company is currently evaluating the impact of this standard. d) IFRS 11 Joint Arrangements replaces the existing IAS 31, Joint Ventures. IFRS 11 provides for the accounting of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form (as is currently the case). The Standard also eliminates the option to account for jointly controlled entities using the proportionate consolidation method. The standard has an effective date of January 1, 2013 with early adoption permitted. The Company is currently evaluating the impact of this standard. e) IFRS 12 Disclosure of in Other Entities provides certain disclosure Interests requirements about subsidiaries, joint ventures and associates, as well as unconsolidated structured entities and replaces existing disclosure requirements. The key features are the requirement to disclose judgements and assumptions made when deciding how to classify involvement with another entity, interest that non-controlling entities have in consolidated entities and the nature of the risks associated with interests in other entities. This is effective for annual periods beginning on or after January 1, 16 2013, with early adoption permitted. The Company is currently evaluating the impact of this standard. f) IFRS 13 Fair Value Measurement establishes a single source of guidance for fair value measurements, when fair value is permitted by IFRS. The standard will not affect when fair value is used, it just describes how to measure fair value. The standard provides a single framework for measuring fair value, while requiring enhanced disclosures when fair value is applied, establishes the definition of fair value as the “exit price” and clarifies that the concepts of highest and best use and valuation premise are relevant only for non-financial assets and liabilities. This is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company is currently evaluating the impact of this standard. g) IAS 27 Separate Financial Statements addresses accounting and disclosure requirements for investments in subsidiaries, joint ventures and associates when an entity prepares separate financial statements. This is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company is currently evaluating the impact of this standard. h) IAS 28 Investments in Associates and Joint Ventures has been amended and will provide accounting and disclosure guidance for investments in associates and joint ventures. This is effective for annual periods beginning on or after January 1, 2013, with early adoption permitted. The Company is currently evaluating the impact of this standard. i) IAS 32 Financial Instruments: Presentation updates the application guidance to clarify some of the requirements for offsetting financial assets and financial liabilities on the statement of financial position. This is effective for annual periods beginning on or after January 1, 2014. The Company is currently evaluating the impact of this standard. Significant Accounting Estimates and Judgments The preparation of consolidated financial statements in accordance with IFRS requires that the Company’s management make judgements and estimates and form assumptions that affect the amounts in the financial statements and the Notes to those financial statements. Actual results could differ from those estimates. Judgements, estimates and assumptions are reviewed on an ongoing basis based on historical experience and other factors that are considered to be relevant under the circumstances. Significant accounting estimates and judgments are related to, but are not limited to, the following: a) Impairment of exploration and evaluation assets: The net carrying value of each mineral license and capitalized exploration costs is reviewed regularly for conditions that are indicators of impairment. This review requires significant judgment as the Company does not have any proven and probable reserves that enable future cash flows to be compared to the carrying values. Factors considered in the assessment of asset impairment include, but are not limited to, whether there has been a significant adverse change in the legal, regulatory, accessibility, title, environmental or political factors that could affect the licenses’ value; whether there has been an accumulation of costs significantly in excess of the amounts originally expected for the licenses’ acquisition, development or cost of holding; whether exploration activities produced results that are not promising such that no more work is being planned in the foreseeable future; and 17 whether the Company has the necessary funds to be able to maintain its interest in the mineral license. As at June 30, 2013, the Company has concluded that impairment conditions do not exist. b) Share-based payments: The Company provides compensation benefits its employees, directors and officers through a stock option plan. The Company also grants warrants in conjunction with private placements and as compensation for debt financing arrangements. The fair value of each option award is estimated on the date of the grant using the Black-Scholes option pricing model. Expected volatility is based on historical volatility of the Company’s share price. The Company uses historical data to estimate option exercises and forfeiture rates with the valuation model. The risk-free interest rate for the expected term of the option is based on the yields of government bonds. life Changes determination could have a material impact on the Company’s comprehensive loss for the year. these assumptions, especially the volatility and the expected to in c) Provision for income taxes: The Company is subject to income taxes in numerous jurisdictions. Uncertainties exist with respect to interpretations of tax regulations. The Company recognizes it current tax payable based on its interpretations of tax regulations which may differ from the interpretations of the tax authorities. Such differing interpretations may impact the Company’s current income tax payable. Judgment is required in determining whether deferred tax assets are recognized on the statement of financial position. The recognition of deferred tax assets requires management to assess the likelihood that the Company will generate taxable income in future periods to utilize the deferred tax assets. Due to a history of losses deferred tax assets have not be recognized. d) Functional currencies: The functional currency of an entity is the currency of the primary economic environment in which an entity operates. The determination of an entities functional currency requires judgement based on analysis of relevant criteria. The functional currency of the Company and its subsidiaries was determined by conducting an analysis of the consideration factors identified in IAS 21, The Effects of Changes in Foreign Exchange Rates. 18 Financial Instruments Categories of financial instruments Financial assets Fair Value Through Profit and Loss Cash and cash equivalents Short-term investments Investments Loans Receivables and advances Financial liabilities Other financial liabilities Accounts payable and accrued liabilities a) Fair Value June 30, 2013 June 30, 2012 $ 27,786,195 $ 1,415,928 18,315,659 6,826,040 997,830 - 975,515 - $ 48,490,297 $ 7,823,870 $ 1,934,285 $ 985,207 Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are: Level 1 – Unadjusted quoted prices in active markets for identical assets and liabilities; Level 2 – Inputs other than quoted prices that are directly or indirectly observable for the asset or liability; and, Level 3 – Inputs that are not based on observable market data; Level 1 Cash and cash equivalents Short-term investments Investments June 30, 2013 June 30, 2012 $ $ $ 27,786,195 $ 1,415,928 $ 18,315,659 $ 6,826,040 997,830 - Fair value of investments traded in active markets is based on quoted market prices on the date of the statement of financial position. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The quoted market price used for investments held by the group is the current bid price of the held securities. These securities are therefore included in level 1 of the fair value hierarchy. The fair values of the Company’s other financial instruments approximates their carrying values because of the short-term nature of these instruments. 19 b) Management of capital risk The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern in order to pursue the development of its exploration and evaluation assets and to maintain a flexible capital structure which optimizes the costs of capital at an acceptable risk. In the management of capital, the Company includes the components of equity. The Company manages the capital structure and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. To maintain or adjust the capital structure, the Company may attempt to issue new shares, acquire or dispose of assets, enter into joint ventures or obtain debt financing. In order to facilitate the management of its capital requirements, the Company prepares annual expenditure budgets that are updated as necessary depending on various factors, including successful capital deployment and general industry conditions. In order to maximize ongoing development efforts, the Company does not pay out dividends. The Company’s investment policy is to invest its cash in highly liquid short-term interest- bearing investments with maturities of twelve months or less from the original date of acquisition, selected with regards to the expected timing of expenditures from continuing operations. The Company is not subject to externally imposed capital requirements. There were no changes to the Company’s approach to capital management during the year. c) Management of financial risk The Company’s financial instruments are exposed to certain financial risks. The risk exposures and the impact on the Company's financial instruments are summarized below. i. Currency risk The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates. The Company operates in Canada, Argentina and Chile and a portion of its expenses are incurred in United States (“US”), Australian dollars and in Argentine and Chilean Pesos. A significant change in the currency exchange rates between the US and Australian dollar relative to the Canadian dollar and the Argentine and Chilean Peso to the Canadian dollar could have an effect on the Company’s results of operations, financial position or cash flows. The Company has not hedged its exposure to currency fluctuations. At June 30, 2013, the Company is exposed to currency risk through the following assets and liabilities denominated in US and Australian dollars and Argentine and Chilean Pesos: Cash and cash equivalents Receivables and advances Accounts payable and accrued US Dollars 20,193,886 925,147 Australian Dollars 10,743 - Argentine Peso 2,002,826 2,103,754 Chilean Peso 197,570,323 - liabilities (664,492) (2,269) (4,191,172) (381,913,720) 20 Based on the above net exposures as at June 30, 2013, and assuming that all other variables remain constant, a 10% depreciation or appreciation of the Canadian dollar against the US and Australian dollar would result in an increase/decrease of $2,150,181 and $817, respectively in the Company’s net income. Likewise, a 10% depreciation or appreciation of the Canadian dollar against the Argentine and Chilean Peso would result in an increase/decrease of $1,650 and $38,196, respectively in the Company’s net income. ii. Credit risk Credit risk is the risk of an unexpected loss if a customer or third party to a financial instrument fails to meet its contractual obligations. The Company’s cash is held through large financial institutions. The Company’s receivables consist of Goods and Services tax due from the Federal Government of Canada and holdback receivable from Coeur, which was collected subsequent on July 12, 2013. Management believes that credit risk concentration with respect to receivables is remote. iii. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company manages liquidity risk through the management of its capital structure and financial leverage as outlined above. As at June 30, 2013, the Company’s financial liabilities consist of accounts payable and accrued liabilities totaling $1,934,285 (2012 - $985,207). The Company has also recorded an income tax provision of $4,123,309. All of the Company’s obligations are expected to be paid within 90 days. Management believes the Company has sufficient funds to meet its liabilities as they become due. iv. Interest rate risk Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The risk that the Company will realize a loss as a result of a decline in the fair value of the short-term investments included in cash is limited because these investments are generally held to maturity. v. Commodity price risk The Company is exposed to equity securities price risk because of investments held by the Company and classified on the statement of financial position as FVTPL and also to the price risk with respect to commodity prices. The Company does not typically invest in equity securities and the maximum exposure to the price risk is represented by the changing fair value of such investments. Assuming all variables remain constant, a 10% increase/decrease in the quoted market price of the Company’s investments would result in an increase/decrease in the Company’s income of approximately US$1,742,357. The Company closely monitors commodity prices to determine the appropriate course of action to be taken by the Company. 21 Additional Disclosure for Venture Issuers without Significant Revenue Additional disclosure concerning Mirasol’s operating expenses and exploration and evaluation costs is provided in the Company’s Consolidated Statements of (Income) Loss and Comprehensive (Income) Loss and in Note 9 of the consolidated financial statements for the year ended June 30, 2013 that is available on Mirasol’s website at www.mirasolresources.com or on its SEDAR company page accessed through www.sedar.com. Approval The Audit Committee of the Company has approved the disclosure contained in this MD&A. Additional Information Additional information relating to Mirasol is available on SEDAR at www.sedar.com and on the Company’s website at www.mirasolresources.com. 22 

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