IN THE SUPREME COURT OF BRITISH COLUMBIA. IN THE MATTER OF THE COMPANIES CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c.

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1 No. S Vancouver Registry IN THE SUPREME COURT OF BRITISH COLUMBIA IN THE MATTER OF THE COMPANIES CREDITORS ARRANGEMENT ACT, R.S.C. 1985, c. C-36, AS AMENDED AND IN THE MATTER OF A PLAN OF COMPROMISE OR ARRANGEMENT OF BUL RIVER MINERAL CORPORATION, BIG BEAR METAL MINING CORPORATION, EARTH S VITAL EXTRACTORS LIMITED, FORT STEELE MINERAL CORPORATION, FORT STEELE METALS CORPORATION, FUSED HEAT LTD., GALLOWAI METAL MINING CORPORATION, GIANT STEEPLES MINERAL CORPORATION, GRAND MINERAL CORPORATION, INTERNATIONAL FELDSPAR LTD., JAO MINE DEVELOPERS LTD., KUTTENI DIAMONDS LTD., STANFIELD MINING GROUP OF CANADA LTD., SULLIBIN MINERAL CORPORATION, SULLIBIN MULTI METAL CORPORATION, SUPER FELDSPARS CORPORATION, WHITE CAT METAL MINING CORPORATION, ZEUS METAL MINING CORPORATION, ZEUS METALS CORPORATION and ZEUS MINERAL CORPORATION FOURTEENTH REPORT TO THE COURT SUBMITTED BY DELOITTE RESTRUCTURING INC. IN ITS CAPACITY AS MONITOR September 3, 2014

2 THE STANFIELD MINING GROUP MONITOR S FOURTEENTH REPORT TO COURT SEPTEMBER 3, 2014 TABLE OF CONTENTS INTRODUCTION... 3 PURPOSE, QUALIFICATIONS AND RESTRICTIONS OF THIS REPORT... 6 TERMS OF REFERENCE... 7 CASH FLOW AND LIQUIDITY... 8 EXTENDED CASH FLOW PROJECTIONS... 9 UPDATE ON THE GROUP S OPERATIONS CONCLUSION APPENDIX A - STATEMENT OF RECEIPTS AND DISBURSEMENTS FOR THE PERIOD JULY 20, 2014 TO AUGUST 30, 2014 APPENDIX B PROJECTED CASH FLOW STATEMENT FOR THE PERIOD AUGUST 31, 2014 TO OCTOBER 18, 2014 Monitor s Fourteenth Report to Court Page 2

3 INTRODUCTION 1. On May 26, 2011, Bul River Mineral Corporation, Big Bear Metal Mining Corporation, Earth s Vital Extractors Limited, Fort Steele Mineral Corporation, Fort Steele Metals Corporation, Fused Heat Ltd., Gallowai Metal Mining Corporation, Giant Steeples Mineral Corporation, Grand Mineral Corporation, International Feldspar Ltd., Jao Mine Developers Ltd., Kutteni Diamonds Ltd., Stanfield Mining Group of Canada Ltd., Sullibin Mineral Corporation, Sullibin Multi Metal Corporation, Super Feldspars Corporation, White Cat Metal Mining Corporation, Zeus Metal Mining Corporation, Zeus Metals Corporation and Zeus Mineral Corporation (the Group or the Companies or the Petitioners ) sought and obtained protection from its creditors under the Companies Creditors Arrangement Act, R.S.C c. C-36, as amended, (the CCAA ) pursuant to an order (the Initial Order ) of the Supreme Court of British Columbia (the Court ). Deloitte & Touche Inc. was appointed as the monitor. Deloitte & Touche Inc. has since changed its name and now operates as Deloitte Restructuring Inc. (the Monitor ). 2. Pursuant to the Initial Order, inter alia, all creditors were stayed from commencing or continuing any proceedings against the Group until June 23, On June 6, 2011, the Court approved the payment of certain critical suppliers and approved substituted service of all materials and Orders in these proceedings. 4. On June 10, 2011, the Court authorized the Group to obtain Debtor-In-Possession Financing ( DIP ) from Tallinn Capital Mezzanine Limited Partnership ( First DIP Lender ) in the amount of up to $1,250,000 (the First DIP Facility ). 5. On June 23, 2011, the Court granted an extension of the stay of proceedings to October 13, On August 19, 2011, the Court issued a Claims Process Order stipulating a Claims Bar Date of October 17, On October 13, 2011, the Court granted an extension of the stay of proceedings to January 13, In addition, the Court authorized the Group to enter into an agreement with Mr. Peter Lacey ( Second DIP Lender ) to provide a second DIP facility of up to $500,000 Monitor s Fourteenth Report to Court Page 3

4 ( Second DIP Facility ) and approved an increase in the Administration Charge to $350, On October 26, 2011, the Court amended the Claims Process Order by extending the last day for delivery of a Notice of Disallowance by the Group to creditors to November 15, On December 15, 2011, the Court authorized the Group to obtain a new DIP facility of up to $6 million (the CuVeras DIP Facility ) from CuVeras, LLC ( CuVeras ). 10. On January 13, 2012, the Court granted an extension of the stay of proceedings to April 10, On April 10, 2012, the Court granted an extension of the stay of proceedings to June 26, On June 26, 2012, the Court granted an extension of the stay of proceedings to January 11, 2013 and approved the increase in the limit of the CuVeras DIP Facility to $10 million. 13. On January 10, 2013, the Court granted an extension of the stay of proceedings to March 28, On March 28, 2013, the Court granted an extension of the stay of proceedings to March 28, On February 26, 2014, the Group filed a notice of application returnable on March 4, 2014 seeking authorization to obtain a replacement DIP facility for the CuVeras DIP Facility from Asia Copper Investment Co. Ltd. ( ACI ) (the ACI DIP Facility ) and approval of the Restructuring Support Agreement with ACI. The hearing was initially adjourned to March 17 and 18, 2014 by consent. 16. The March 17, 2014 Court hearing was then further adjourned with consent of the parties to permit additional time for information from both ACI and CuVeras to be provided to the Monitor. 17. The Group s stay of proceedings expired on March 28, The stay of proceedings was extended to April 4, 2014 in order that the Court could hear the application on March 31 and Monitor s Fourteenth Report to Court Page 4

5 April 1, Prior to making arguments in regards to the ACI DIP Facility and Restructuring Support Agreement, the parties argued what had been characterized as a threshold issue, being whether or not the Letter of Intent #2 dated March 26, 2012 ( LOI #2 ) with CuVeras had been repudiated by CuVeras and, if so, what legal consequences flowed therefrom. 18. On April 4, 2014, the Court granted an extension of the stay of proceedings to April 17, On April 9, 2014, the Court decided in favour of the Group s position that LOI #2 had been repudiated, that the repudiation had been validly accepted by the Group and thus the Group was relieved from any further obligations under the LOI #2. In the result, the Court s decision cleared the path for the Petitioners to continue negotiations with respect to the ACI DIP Facility and Restructuring Support Agreement. 20. On April 14, 2014, the Group filed a notice of application returnable on April 16, 2014 seeking an extension of the stay of proceedings to May 26, 2014 and the Group further sought approval of the ACI DIP Facility and a revised form of ACI Restructuring Support Agreement (the Revised ACI RSA ). The Revised ACI RSA contained various amendments to respond to concerns that had previously been raised by the Monitor in its Tenth Report to the Court dated March 31, On April 16, 2014, the Court approved the ACI DIP Facility and the Revised ACI RSA and further granted an extension of the stay of proceedings to May 26, On April 24, 2014, the Court approved the advancement of the CuVeras funds held by the Monitor to the Group and an increase of $200,000 in the Administration Charge to $550,000. The aforementioned increase in the Administration Charge ranks subordinate to the CuVeras DIP Facility. 23. On April 25, 2014, CuVeras filed with the Court of Appeal a notice of application for leave to appeal the decision of this Honourable Court with respect to the determination that LOI #2 had been repudiated. The leave to appeal application was adjourned three times, to May 15, 22 and June 10, 2014 as CuVeras and the Group entered negotiations over a new DIP and a potential transaction. On May 30, 2014 Cuveras filed a notice of settlement or abandonment of its appeal. Monitor s Fourteenth Report to Court Page 5

6 24. On May 6, 2014, the Monitor issued a Material Adverse Change Report which indicated that ACI s counsel had been notified by ACI that it no longer intended to fund the Group under the terms of the Court approved ACI DIP Facility. With this notification the Monitor was of the view that there had been a material adverse change since ACI s withdrawal of its intent to fund left the Group with no source of funding to meet its post-filing obligations. 25. On May 28, 2014, the Court approved: (i) an extension of the stay of proceedings to July 25, 2014; (ii) the Group to enter into an amended DIP lending facility (the Amended DIP Facility ) with CuVeras for up to an additional $1 million to permit the Group to continue its very limited operations; and (iii) the Group to enter into a Letter of Agreement ( LOA ) with CuVeras. The LOA detailed the various obligations which the Group has to CuVeras as well as different avenues which the Group and CuVeras would pursue to reach a Plan of Arrangement or Compromise ( Plan ) and exit the CCAA process in the short term. 26. On July 25, 2014, the Court granted an extension of the stay of proceedings to September 5, On August 18, 2014, the Group and CuVeras made an application to Court to obtain an Order regarding various claims which were filed during the Court approved Claims Process period. The application is seeking to have certain claims determined to not be debt based, or the claims not being against the Group, being statute barred, and/or that the claims should be categorized as equity. The Monitor has been advised that the application is being made for the purpose of determining classes within a Plan. The application is to be heard on September 3, Additional information on these proceedings is available on the Monitor s website at PURPOSE, QUALIFICATIONS AND RESTRICTIONS OF THIS REPORT 29. This report is the Monitor s Fourteenth report ( Fourteenth Report ) to the Court. The Fourteenth Report should be read in conjunction with the Monitor s first report to the Court dated June 22, 2011 ( First Report ), the Monitor s second report to the Court dated Monitor s Fourteenth Report to Court Page 6

7 October 12, 2011 ( Second Report ), the Monitor s third report to Court dated December 14, 2011 ( Third Report ), the Monitor s fourth report to the Court dated January 12, 2012 ( Fourth Report ), the Monitor s fifth report to the Court dated April 5, 2012 ( Fifth Report ), the Monitor s sixth report to the Court dated June 25, 2012 ( Sixth Report ), the Monitor s seventh report to the Court dated January 8, 2013 ( Seventh Report ), the Monitor s eighth report to the Court dated March 26, 2013 ( Eighth Report ), the Monitor s ninth report to the Court dated February 28, 2014 ( Ninth Report ), the Monitor s tenth report to the Court dated March 31, 2014 ( Tenth Report ),the Monitor s eleventh report to the Court dated April 22, 2014 ( Eleventh Report ), the Monitor s material adverse change report dated May 6, 2014 ( MAC Report ), the Monitor s twelfth report to the Court dated May 23, 2014 ( Twelfth Report ), the Monitor s update to stakeholders dated June 17, 2014 ( Update to Stakeholders ), and the Monitor s thirteenth report to the Court dated July 24, 2014 ( Thirteenth Report ). 30. The purpose of this Fourteenth Report is to provide this Honourable Court with an update on: (i) the Group s current cash position; (ii) the activities of the Group and CuVeras with respect to a Plan; and (iii) the Monitor s recommendation in connection with the Group s application extending the stay period for two weeks to September 19, TERMS OF REFERENCE 31. In preparing this Fourteenth Report, the Monitor has relied upon unaudited interim financial information from the Group s books and records, and discussions with management ( Management ) and its financial and legal advisors. 32. The financial information of the Group has not been audited, reviewed or otherwise verified by the Monitor as to its accuracy or completeness, nor has it necessarily been prepared in accordance with generally accepted accounting principles and the reader is cautioned that this report may not disclose all significant matters about the Group. Additionally, none of the Monitor s procedures were intended to disclose defalcations or other irregularities. Were we to perform additional procedures or to undertake an audit examination of the cash flow projection in accordance with generally accepted auditing standards, additional matters may have come to our attention. Accordingly, the Monitor does not express an opinion and does Monitor s Fourteenth Report to Court Page 7

8 not provide any other form of assurance on the financial or other information presented herein. The Monitor may refine or alter its observations as further information is obtained or brought to its attention subsequent to the date of this Fourteenth Report. 33. The Monitor assumes no responsibility or liability for any loss or damage occasioned by any party as a result of the circulation, publication, reproduction or use of this Fourteenth Report. Any use, which any party makes of this Fourteenth Report, or any reliance or decision made based on this Fourteenth Report, is the sole responsibility of such party. 34. All dollar amounts identified in this Fourteenth Report are expressed in Canadian dollars, unless otherwise specified. CASH FLOW AND LIQUIDITY 35. Since the Thirteenth Report, the Group has had an additional $125,000 forwarded by CuVeras under the Amended DIP Facility. The funds have been used to maintain the Group s very limited operations to maintain and secure the assets. A copy of the Group s statement of receipts and disbursements for the period July 20, 2014 to August 30, 2014 is attached hereto as Appendix A. 36. As indicated in the Thirteenth Report, the Amended DIP Lending Facility provided that the Group would have an additional $1 million available for operations expenses; however the expenses were restricted to only expenses required for maintaining and securing the assets of the Group. Management has indicated that the Group will be continuing discussions with CuVeras and engineers to continue the work required for permitting. Some of the work has been budgeted in the Group s cash flow and funding will be provided by CuVeras, other work is being paid directly by CuVeras to a contractor which they have engaged. 37. Since the Amended DIP Facility was executed, CuVeras has funded a total of $550,000 to the Group. 38. The Group s accounts payable as at August 30, 2014 totals approximately $546,000. Approximately $7,000 relates to the trade payables required to be paid under the Amended DIP Facility. The payables owing as of August 30, 2014 can be summarized as follows: Monitor s Fourteenth Report to Court Page 8

9 Trade Payables $121,901 Professional Fees (Admin Charge) 359,785 Professional Fees (CuVeras-Amended DIP) 64,587 $ 546, The Group s cash position as at August 30, 2014 was approximately $54,013. EXTENDED CASH FLOW PROJECTIONS 40. Management has updated and extended the cash flow projection for the period of August 31 to October 18, The cash flow projection contemplates continued payments under the Amended DIP Facility to maintain and secure the Groups assets while a Plan is prepared. Attached as Appendix B is Management s updated cash flow projection. 41. The Monitor s comments on the updated cash flow projection from August 31 to October 18, 2014 are as follows: (i) The cash flow projection assumes that approximately $309,000 will be advanced from the Amended DIP Facility to the Group during the projection period. The projected advance for this period would increase the total funded amount by CuVeras under the Amended DIP Facility to $859,000. The total projected amount to be advanced by CuVeras is below the $1 million committed under the Amended DIP Facility. (ii) The cost of professional fees will also be higher than agreed to by CuVeras in the Amended DIP Facility as there have been more applications than anticipated and further extensions of these proceedings. (iii) The Monitor s review of the updated cash flow projection consisted of inquiries, analytical procedures and discussion related to information supplied to us by certain of the Management and employees of the Group. Since Hypothetical Assumptions need not be supported, the Monitor s procedures with respect to them were limited to evaluating whether they were consistent with the purpose of the cash flow projection. The Monitor has also reviewed the support provided by Management for the Probable Assumptions, and the preparation and presentation of the cash flow projection. Monitor s Fourteenth Report to Court Page 9

10 (iv) Based on the Monitor s review, nothing has come to its attention that causes it to believe that, in all material respects: the Hypothetical Assumptions are not consistent with the purpose of the updated cash flow projection; as at the date of the Fourteenth Report, the Probable Assumptions developed by Management are not suitably supported and consistent with the plans of the Group or do not provide a reasonable basis for the cash flow projection, given the Hypothetical Assumptions; or the updated cash flow projection does not reflect the Probable and Hypothetical Assumptions. Since the updated cash flow projection is based on Assumptions regarding future events, actual results will vary from the information presented even if the Hypothetical Assumptions occur, and the variations may be material. Accordingly, the Monitor expresses no assurance as to whether the cash flow projection will be achieved. The Monitor expresses no opinion or other form of assurance with respect to the accuracy of any financial information presented in this report, or relied upon by the Monitor in preparing this Fourteenth Report. UPDATE ON THE GROUP S OPERATIONS 42. During the extension of the stay of proceedings period, Management has continued to take the steps necessary to remain compliant with the Mines Act. Further, Management has continued to work with CuVeras and its counsel to characterize the shareholders and the debt of the Group in order that a Plan can be developed. 43. Management has indicated that the Group is currently working with CuVeras and engineers to complete work necessary for permitting and the submission of a mine permit application. The Group is currently collecting data and reviewing the mining infrastructure to determine the process of how the Group will move the mine into production. 44. Management has advised that as a result of the Mount Polly incident, the Group received correspondence last week from the BC Ministry of Mines requiring a review be completed of the Group s reclaimed tailings pond. These costs have not been reflected in the projected cash Monitor s Fourteenth Report to Court Page 10

11 flow as the cost and timeline for this work is still being determined by Management. Work is required to be completed by December 1, Management has confirmed that all entities within the Group have fulfilled all statutory CRA filing requirements as at the date of this Fourteenth Report. CONCLUSION 46. The extensions of the Stay of Proceedings which were granted by this Honourable Court at both the May 28 and July 25, 2014 hearings were to be for short periods of time for the Group and CuVeras to develop a Plan to be presented to the stakeholders. The Monitor is aware that the parties have been working on developing a Plan; however this process has continued to take longer than the parties originally anticipated. 47. Counsel for CuVeras has advised that the intention is to seek a two week extension, in order that the outcome of the September 3, 2014 application addressing claims will be known, and a Plan can be finalized and submitted to this Honourable Court in order that a Claims and Meeting Procedure Order may be obtained. 48. CuVeras has indicated it has sufficient funds to continue to fund the Group over the next two weeks and anticipates it will have sufficient funds raised to get to a Plan meeting approximately four further weeks. The Monitor has concern over whether sufficient funding will be available to have a Plan filed and voted upon. The Group requires CuVeras financial support in order to able to fund its limited operations and to get to a Plan. 49. Given CuVeras is the only option which the Group has and it represents the greatest opportunity for a Plan to be presented to the Stakeholders, it remains difficult for the Monitor to not support the request for an extension. The Monitor has been advised that a Plan will be submitted within the requested two week extension period. 50. The Monitor remains of the view that the Group must find a way to exit this CCAA proceeding promptly. The Group is not producing any income; no further work is being done to determine the resource estimate and value of the mine; and no further action is being taken to restructure the Group or its business. Consequently, there is no reason to delay presenting a Plan to Stakeholders beyond September 19, Monitor s Fourteenth Report to Court Page 11

12 51. In the Monitor s view, the determination of the claims which are the subject of the September 3, 2014 application is the only outstanding issue that would impact the structure of a Plan. Given the reasons previously stated and the length of time this CCAA proceeding has been ongoing, the Monitor will not be supportive of an extension of the stay more than a week or so beyond the final determination of these claims.. Dated at Vancouver, British Columbia this 3 rd day of September, DELOITTE RESTRUCTURING INC. In its capacity as Court appointed Monitor of Stanfield Mining Group, et al. and not in its personal capacity. Per: Melinda McKie, CMA, CIRP Senior Vice President Monitor s Fourteenth Report to Court Page 12

13 APPENDIX A STATEMENT OF RECEIPTS AND DISBURSEMENTS FOR THE PERIOD JULY 20, 2014 TO AUGUST 30, 2014 Monitor s Fourteenth Report to Court

14 STANFIELD MINING GROUP Statement of Receipts and Disbursements for the Period of July 20, 2014 to August 30, 2014 Total Week 165 Week 166 Week 167 Week 168 Week 169 Week 170 Projection Actual Total Week number Actual to wk Actual Variance 166 Actual Variance 167 Actual Variance 168 Actual Variance 169 Actual Variance 170 Actual Variance for the period for the period Actual to wk 170 Week ending Notes 19-Jul Jul Jul Jul-14 2-Aug-14 2-Aug-14 2-Aug-14 9-Aug-14 9-Aug-14 9-Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug-14 Week 165 to 170 Week 165 to 170 Variance Percentage Variance Opening Cash Balance $ 61,813 $ 58,810 $ 58,810 $ - $ 32,510 $ 107,297 $ 74,787 $ 18,260 $ 92,272 $ 74,013 $ 16,470 $ 80,171 $ 63,701 $ 16,520 $ 66,189 $ 49,669 $ 16,255 $ 90,440 $ 74,185 $ 58,810 $ 58,810 $ 61,813 Cash Outflows Utilities Power - Mine & Camp 734,354 5,000 4,760 (240) 8,000 8, ,000 1,783 (3,217) 5,000 4,711 (289) 5,000 4,711 (289) 8,000 4,711 (3,289) 36,000 29,671 (6,329) (18%) 764,025 Propane 133,722 4,271 4,271 4,250 (4,250) ,250 (4,250) 8,500 4,271 (4,229) (50%) 137,993 Internet & Phone 65,104-1,500 (1,500) - - 1,728 1,728 1,500 (1,500) 3,000 1,728 (1,272) (42%) 66,832 Gasoline/Fuel 136,529 1, (517) 1, (13) 1, (441) 1,000 (1,000) 1,000 1, ,000 (1,000) 6,000 4,021 (1,979) (33%) 140,549 IT Server Support & Data Centre 103,347 2,860 2,835 (25) - - 2,835 2,835 2,860 (2,860) - 5,720 5,670 (50) (1%) 109,017 Leases (photocopiers) 28, % 28,636 Employee Wages 1,258, (10) 9,000 (9,000) 90 9,774 9,684 9, (8,920) 90 9,788 9,698 9, (8,845) 27,270 19,877 (7,393) (27%) 1,278,611 Work Safe BC 33,950 1,265 1, ,265 1,265 0% 35,215 Contractors 2,326,771 10,250 12,930 2,680 10,250 12,882 2,632 10,250 7,807 (2,443) 10,250 5,833 (4,417) 10,250 6,043 (4,207) 10,250 5,775 (4,475) 61,500 51,270 (10,230) (17%) 2,378,040 Insurance Building/Mine/Camp/Liability 101,194 2,150 (2,150) ,365 1,487 (878) - 4,515 1,487 (3,028) (67%) 102,681 Plant & Equipment 65,236 3,250 (3,250) - 3,252 3,252-3,250 (3,250) - 6,500 3,252 (3,248) (50%) 68,488 Vehicle 34, % 34,143 Petty Cash 32, (200) 200 (200) 200 (200) 200 (200) 200 (200) 200 (200) 1,200 - (1,200) (100%) 32,628 Repairs & Maintenance 333,372 1,500 (1,500) 2,577 2,577 1,500 (1,500) - 1,500 (1,500) - 4,500 2,577 (1,923) (43%) 335,949 Rent (Edmonton Office) 30, % 30,183 Advertising Expense 4, % 4,746 Accounting fees 147, (750) (750) (750) 2,250 - (2,250) (100%) 147,727 Legal fees 1 828,058-26,000 1,308 (24,692) 26,000 (26,000) 26,000 (26,000) 26,000 (26,000) 26, (25,061) 130,000 2,247 (127,753) (98%) 830,305 Monitor's Fees 1 601,923-6,400 (6,400) 6,400 (6,400) 6,400 (6,400) 6,400 (6,400) 6,400 (6,400) 32,000 - (32,000) (100%) 601,923 DIP Interest Expense/Fees 2 1,642, % 1,642,053 DIP Repayment 2 750, % 750,000 Critical Suppliers 136, % 136,613 Economic studies 304, % 304,315 Appraisal 7, % 7,840 Bank fees 19, (548) (550) 1, (575) (52%) 20,500 NI Report 1,345, % 1,345,905 Property Tax 322, % 322,931 Contingency 71, % 71,195 Mineral Claim/Leases 154, % 154,542 Post Filing Payables 3 10,827-1,350 (1,350) 1,350 (1,350) 1,350 (1,350) 1,350 (1,350) 1,350 (1,350) 6,750 - (6,750) (100%) 10,827 Total Cash Outflows $ 11,766,249 $ 26,300 $ 26,625 $ 325 $ 69,250 $ 27,054 $ (42,196) $ 51,790 $ 23,175 $ (28,615) $ 59,950 $ 13,982 $ (45,968) $ 60,265 $ 25,749 $ (34,516) $ 69,250 $ 11,579 $ (57,671) $ 336,805 $ 128,164 $ (208,641) (62%) $ 11,894,413 DIP Financing - ACI % - DIP Financing - CuVeras 2 8,016,690 75,000 75,000 55,000 (55,000) 50,000 (50,000) 60,000 (60,000) 60,000 50,000 (10,000) 70,000 (70,000) 295, ,000 (170,000) (58%) 8,141,690 Other Receipts 6 3,746, ,029 12,029 11,073 11, ,215 23,215 0% 3,769,771 Total Cash Inflows $ 11,763,245 $ - $ 75,113 $ 75,113 $ 55,000 $ 12,029 $ (42,971) $ 50,000 $ 11,073 $ (38,927) $ 60,000 $ - $ (60,000) $ 60,000 $ 50,000 $ (10,000) $ 70,000 $ - $ (70,000) $ 295,000 $ 148,215 $ (146,785) (50%) $ 11,911,461 Net Weekly Cash Position (3,003) (26,300) 48,487 74,787 (14,250) (15,025) (775) (1,790) (12,102) (10,312) 50 (13,982) (14,032) (265) 24,251 24, (11,579) (12,329) (41,805) 20,051 61,856 (148%) 17,048 Bank Balance $ 58,810 $ 32, ,297 $ 74,787 $ 18,260 92,272 $ 74,013 $ 16,470 80,171 $ 63,701 $ 16,520 66,189 $ 49,669 $ 16,255 90,440 $ 74,185 $ 17,005 78,861 $ 61,856 $ 17,005 $ 78,861 $ 61, % $ 78,861 NOTES / ASSUMPTIONS 1) As part of the amended facility letter with CuVeras dated May 28, 2014, $55,000 was required to be paid to Professionals to decrease the outstanding administration fee to $350,000. CuVeras also agrees to fund up to $200,000 of professional fees over the three months following the date of the amended facility letter. 2) An amended facility letter was executed on May 28, 2014 in respect to a DIP facility letter dated June 20, CuVeras has agreed to fund up to an additional $1 million to permit the Group to continue limited operations of maintaining and safeguarding the assets. As of August 30, 2014, the Group has had $550,000 forwarded by CuVeras under the Amended DIP facility. 3) As part of the amended facility letter with CuVeras dated May 28, 2014, existing aged payables referenced in the Monitor's 12th Report were to be paid, approximately $7,000 remain outstanding at August 30, ) The ACI DIP Facility did not proceed, and no funding was received. 5) This cash flow projection should be read in conjunction with the Monitor's Reports. 6) Other reciepts primarily included GST rebates received during the Period. The information provided in the cash flow statement has been prepared by the Stanfield Mining Group. Since the cash flow statement is based on assumptions regarding future events, actual results will vary from the information presented even if the hypothetical assumptions occur, and the variations may be material. Accordingly, Deloitte Restructuring Inc. expresses no assurance as to whether the cash flow statement will be achieved and no opinion or other form of assurance with respect to the accuracy of any financial information presented or relied upon.

15 APPENDIX B PROJECTED CASH FLOW STATEMENT FOR THE PERIOD AUGUST 31, 2014 TO OCTOBER 18, 2014 Monitor s Fourteenth Report to Court

16 STANFIELD MINING GROUP Projected Cash Flow Statement Total for the Period of August 31, 2014 to October 18, 2014 Total Actual to week 170 Actual for the period & Projection to week Week 171 to 177 Week number for 170 weeks to Week ending Notes 30-Aug-14 6-Sep Sep Sep Sep-14 4-Oct Oct Oct-14 Projection Opening Cash Balance $ 61,813 $ 78,861 $ 1,372 $ 372 $ 6,117 $ 4,217 $ 2,877 $ 2,227 $ 78,861 $ 61,813 Cash Outflows Utilities Power - Mine & Camp 764,025 5,000 5,000 5,000 8,000 5,000 5,000 5,000 38, ,025 Propane 137,993 4,250 4,250 8, ,493 Internet & Phone 66,832 2,900 2,900 69,732 Gasoline/Fuel 140,549 2,423 1,000 1,000 2,000 1,000 1,000 1,000 9, ,972 IT Server Support & Data Centre 109,017 5,000 2,860 7, ,877 Leases (photocopiers) 28,636-28,636 Employee Wages 1,278, , , , ,910 1,317,521 Work Safe BC 35,215 1,500 1,500 36,715 Contractors 2,378,040 18,262 14,250 10,250 10,250 10,250 14,250 10,250 87,762 2,465,802 Insurance Building/Mine/Camp/Liability 102,681 2,365 2,365 4, ,411 Plant & Equipment 68,488 3,250 3,250 6,500 74,988 Vehicle 34,143-34,143 Petty Cash 32, ,400 34,028 Repairs & Maintenance 335,949 16,914 1,500 1,500 1,500 21, ,363 Rent (Edmonton Office) 30,183-30,183 Advertising Expense 4,746-4,746 Accounting fees 147, ,000 7, ,977 Legal fees 830,305 11,600 11,600 11,600 11,600 11,600 11,600 11,600 81, ,505 Monitor's Fees 601,923 20,000 9,700 9,700 9,700 9,700 58, ,723 DIP Interest Expense/Fees 1,642,053-1,642,053 DIP Repayment 750, ,000 Critical Suppliers 136, ,613 Economic studies 304, ,315 Appraisal 7,840-7,840 Bank fees 20, ,050 NI Report 1,345,905-1,345,905 Property Tax 322, ,931 Contingency 71,195-71,195 Mineral Claim/Leases 154, ,042 Post Filing Payables 10,827 3,000 4,500 7,500 18,327 Total Cash Outflows $ 11,894,413 $ 77,488 $ 51,000 $ 40,255 $ 63,900 $ 39,340 $ 53,650 $ 59,065 $ 384,698 $ 12,279,111 DIP Financing - ACI DIP Financing - CuVeras 8,141,690 50,000 46,000 62,000 38,000 53,000 60, ,000 8,450,690 Other Receipts 3,769,771-3,769,771 Total Cash Inflows $ 11,911,461 $ - $ 50,000 $ 46,000 $ 62,000 $ 38,000 $ 53,000 $ 60,000 $ 309,000 $ 12,220,461 Net Weekly Cash Position 17,048 (77,488) (1,000) 5,745 (1,900) (1,340) (650) 935 (75,698) (58,651) Bank Balance $ 78,861 $ 1,372 $ 372 $ 6,117 $ 4,217 $ 2,877 $ 2,227 $ 3,162 $ 3,162 $ 3,162 1) 2) This cash flow projection should be read in conjunction with the Monitor's Reports. Week 171 reflects the cash flow projection for the Group's operations for the week and the outstanding cheques as of August 30, 2014 of $24,848. Historical expenses are recognized on a cash basis. The information provided in the cash flow statement has been prepared by the Stanfield Mining Group. Since the cash flow statement is based on assumptions regarding future events, actual results will vary from the information presented even if the hypothetical assumptions occur, and the variations may be material. Accordingly, Deloitte Restructuring Inc. expresses no assurance as to whether the cash flow statement will be achieved and no opinion or other form of assurance with respect to the accuracy of any financial information presented or relied upon.