Kombat Copper Inc. (formerly Pan Terra Industries Inc.) Interim Condensed Consolidated Financial Statements Three Months ended June 30, 2013 and 2012

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1 Interim Condensed Consolidated Financial Statements Three Months ended (Unaudited Prepared by Management)

2 Notice of No Audit Review In accordance with National Instrument released by the Canadian Securities Administrators, the Company discloses that its auditors have not reviewed these unaudited interim condensed consolidated financial statements as at and for the three month period ended.

3 Interim Condensed Consolidated Statements of Financial Position As at: Assets Total Liabilities and Shareholders' Equity $ 27,001,027 $ 27,861,265 Going Concern (note 1) Restatement (note 14) Subsequent Event (note 15) Approved by the Board: Notes June 30 March Current Cash and cash equivalents $ 383,857 $ 1,012,326 Sundry receivables 168, ,044 Deposits 14,666 23,244 Total Current Assets 567,109 1,421,614 Non-Current Property and Equipment 4 4,443,725 4,475,654 Exploration and evaluation assets 6 22,136,124 21,963,997 Total Non-Current Assets 26,579,850 26,439,651 Total Assets $ 27,146,958 $ 27,861,265 Liabilities Current Trade payable and accrued liabilities 11 $ 875,433 $ 1,121,805 Total Current Liabilities 875,433 1,121,805 Shareholders' Equity Share capital 7 27,862,692 27,862,692 Warrants 7 10,770,611 10,770,611 Contributed surplus 8 2,518,717 2,518,717 Cumulative translation adjustment (567,102) (107,838) Deficit (19,236,912) (18,693,047) Shareholders' Equity attributable to shareholders of the Company 21,348,006 22,351,135 Non Controlling Interest 5 4,777,589 4,388,325 Total Shareholders' Equity 26,125,595 26,739,460 Per: "Alexander Helmel" Alexander Helmel Per: "Scott Kelly" Scott Kelly See accompanying notes which are an integral part of these consolidated financial statements.

4 Interim Condensed Consolidated Statements of Operations and Comprehensive Loss Notes Period ended June (restated) Expenses General and administrative 11 $ 536,045 $ 730,237 Share based payments ,000 Depreciation 31,986 - Net Loss (568,031) (1,006,237) Foreign currency translation adjustment (567,102) - Net loss and comprehensive loss for the year (1,135,133) (1,006,237) Net loss attributable to: Shareholders' (543,865) (962,237) Non-Controlling Interests (24,166) (44,000) - (568,031) (1,006,237) Loss per share Basic and diluted 9 $ (0.01) $ (0.02) See accompanying notes which are an integral part of these consolidated financial statements.

5 Interim Condensed Consolidated Statements of Changes in Shareholders Equity For the three month period ended: Notes Number of Share Capital common shares Contributed surplus Warrants Deficit Non-Controlling Interest Cumulative Translation Adjustment Total shareholders equity Balance, April 1, ,293,547 $ 17,712,672 $ 1,881,717 $ 1,855,486 $ (15,192,568) $ 386,250 $ - $ 6,643,557 Net loss for the period (962,236) - - (962,236) Private placements 7 26,314,000 7,780,000-5,377, ,157,000 Share issuance costs - (1,829,355) - 744, (1,085,355) Warrants exercised 687, ,375 - (61,875) ,500 Acquisition of Manilla Investments (Pty) Inc. 5 8,000,000 4,000,000 2,856, ,856,000 Share based payments , ,000 Net Loss attributed to non-controlling interest (44,000) - (44,000) Acquisition of non-controlling interest ,216,879-4,216,879 Balance, June 30, 2012 (restated) 82,295,047 $ 27,862,692 $ 2,157,717 $10,770,611 $ (16,154,804) $ 4,559,129 $ - $ 29,195,345 Balance, April 1, ,295,047 $ 27,862,692 $ 2,518,717 $10,770,611 $ (18,693,047) $ 4,388,325 $ (107,838) $ 26,739,460 Net loss for the period (543,865) - - (543,865) Net Loss attributed to non-controlling interest , ,264 Cumulative Translation adjustment (459,264) (459,264) Balance, June 30, ,295,047 $ 27,862,692 $ 2,518,717 $10,770,611 $ (19,236,912) $ 4,777,589 $ (567,102) $ 26,125,595 See accompanying notes which are an integral part of these consolidated financial statements

6 Interim Condensed Consolidated Statements of Cash Flows Cash provided by (used for): Notes Period ended June 30, (restated) Operating activities Net loss $ (568,031) $ (1,006,237) Items not involving cash: Loss Attributable to Non Controlling Interet 24,166 - Share based payments - 276,000 Depreciation 31,986 - (511,879) (730,237) Net changes in non-cash working capital ,927 1,088,716 (142,952) 358,479 Investing activities Expenditures on exploration and evaluation assets (22,155) (10,011,515) (22,155) (10,011,515) Financing activities Issuance of common shares - 13,157,000 Share issuance costs - (1,085,355) Proceeds from exercise of warrants & options - 137,500-12,209,145 Net change in cash (165,107) 2,556,109 Effect of foreign exchange on cash and cash equivalents (463,362) - Cash, beginning of period 1,012,326 1,422,190 Cash, end of period $ 383,857 $ 3,978,299 Breakdown of Cash Equivalents: Cash 383,857 3,978,299 Cash equivalents - - Total 383,857 3,978,299 See accompanying notes which are an integral part of these consolidated financial statements

7 1. Nature of Operations and Going Concern Kombat Copper Inc. (the Parent ) was incorporated under the Business Corporations Act (Canada) on April 1, 2005, the Company s registered head office is located at 1100 Melville Street, Suite 830, Vancouver, British Columbia. The principal business activities of the Company are the acquisition, maintenance, exploration and development of mines and mineral properties in the African Country of Namibia. The Company also owns exploration properties in Ontario, Canada. The Company is in the process of determining whether these properties contain economically recoverable mineral reserves. These interim condensed consolidated financial statements have been prepared on a going concern basis which contemplates the realization of assets and the payment of liabilities and commitments in the ordinary course of business. As at June 30, 2013, the Company had a deficit of $19,236,912 (March 31, $18,693,047), incurred loss from operation of $568,031 during the three month period ended June 30, 2013 ( $1,006,237) and had negative cash flows from operations. The Company's ability to continue as a going concern and its future operations are dependent upon management's ability to successfully execute the business plan to explore and develop mineral resources and to manage its cash flows through additional financing that will generate positive cash flow. There can be no assurance that a viable business opportunity that can be adequately financed will be identified and available to the Company. Additional equity and/or debt financing is subject to the global financial markets and prevailing economic conditions, which have recently been volatile and distressed. The market factors will likely make it more challenging to obtain financing for the Company going forward. As such, there is a material uncertainty related to these events and conditions that cast significant doubt about the Company s ability to continue as a going concern and, therefore, it may be unable to realize its assets and discharge its liabilities. These consolidated financial statements do not reflect the adjustments or reclassification of assets and liabilities which would be necessary if the Company were unable to continue its operations. These financial statements were approved by the Board of Directors on August 29, Basis of Presentation The condensed consolidated financial statements for the three month period ending June 30, 2013 have been prepared in accordance with IFRS as issued by the IASB applicable to the preparation of interim financial statements including IAS34 Interim Financial Reporting. These consolidated financial statements should be read in conjunction with the annual financial statements for the year ended March 31, 2013, which have been prepared in accordance with IFRS as issued by the IASB. The accounting policies have been applied consistently throughout the Company for purposes of these interim condensed consolidated financial statements. Significant Accounting Judgments, Estimates and Assumptions The preparation of these consolidated financial statements in conformity of IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management s experience and other factors, including expectations of future events that are believed to be reasonable under the

8 circumstances. However, actual outcomes can differ from these estimates. Judgment is used in situations when there is a choice and/or assessment requirement by management. The following are critical judgments apart from those involving estimations that management has made in the process of applying the Company s accounting policies and that have a significant effect on the amounts recognized the consolidated financial statements. Significant assumptions about the future and other sources of estimation uncertainty that management has made at the date of consolidated financial statements, could result in a material adjustment to the carrying amounts of assets or liabilities. In the event that actual results differ from the assumptions made, relate to, but are not limited to the following: Going concern As discussed in Note 1, these consolidated financial statements have been prepared in accordance with IFRS on a going concern basis, which assumes the realization of assets and discharge of liabilities in the normal course of business within the foreseeable future. Management uses judgment in determining assumptions for cash flow projections, such as anticipated financing, deferral of commitments, negotiation of supplier terms and future commitments to assess the Company s ability to continue as a going concern. A critical judgement is that the Company continues to raise funds going forward and satisfy their obligations as they become due. Exploration and evaluation assets and their impairment The Company assesses each mining property annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of the fair value less costs to sell and value in use. As at June 30, 2013, management s assessment of impairment is based on the following judgements: a. The prospecting rights are not expected to expire in the near term; b. The Company is continuing with further exploration of the property and acquiring further property and equipment; On an ongoing basis, the Company evaluates each mining property and project on results to date to determine the nature of exploration, other assessment that is warranted in the future. If there is little prospect of future work on a property, the deferred expenditures related to that property or project are written off or written down to the estimated amount recoverable unless there is persuasive evidence that an impairment allowance is not required. The amounts shown for mineral properties and for mineral property evaluation costs represent costs incurred to date, and are not intended to reflect present or future values. Provision for environmental rehabilitation obligations The Company s mining and exploration activities are subject to various laws and regulations governing the protection of the environment. The Company recognizes management s best estimate for decommissioning and restoration obligations in the period in which they are incurred. Actual costs incurred in future periods could differ materially from the estimates. Additionally, future changes to environmental laws and regulations, life of mine estimates and discount rates

9 could affect the carrying amount of this provision. Judgment was applied in the Company s assessment of the rules and regulations to determine environmental rehabilitation obligations. Estimation uncertainty disclosure for share based payments and warrants The fair value of each option granted is estimated at the grant date using the Black-Scholes option pricing model. The key assumptions are forfeiture rate, interest rate, dividend yield and expected volatility which is used to calculate the grant date fair value of the instruments. It takes into account the historical volatility of similar companies share prices over the expected term of the options granted. If management estimates that historical volatility requires an adjustment, the Company also takes into consideration the historical volatility of comparable companies at similar stages of development as the Company as well as the volatility estimates derived from the fair value calculation of financial instruments and equity instruments in periods when this information available. Income taxes The Company is subject to income taxes in some jurisdictions. Significant judgement is required in determining the total provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Company recognizes liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made. Consolidation The financial statements consolidate the accounts of Kombat Copper Inc. and its subsidiaries, Kombat Mine (Pty) Inc. (Namibia) 100%, Congo Namibia Trading (Pty) Inc. (Namibia) 80%, Grove Mining (Pty) Inc. (Namibia) 80%, Manila Investment (Pty) Inc. (Namibia) 80% and Ontario Inc. (Ontario) 100%. All intercompany transactions, balances and unrealized gains or losses from intercompany transactions are eliminated on consolidation. Subsidiaries are all entities which the Parent controls by having the power to govern the financial and operating policies and, generally, more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date on which control is obtained by the Company and are de-consolidated from the date that control ceases. Accounting policies of subsidiaries are consistent with the policies adopted by the Parent. Functional and reporting currencies Items included in the financial statements of each consolidated entity are measured using the currency of the primary economic environment in which the entity operates. The consolidated financial statements are presented in Canadian dollars, which is Company's functional currency. The functional currencies of the subsidiaries are Canadian for Ontario Inc. and Namibian

10 dollars for Kombat Mine (Pty) Inc., Congo Namibia Trading (Pty) Inc., Grove Mining (Pty) Inc. and Manila Investment (Pty) Inc. Transactions denominated in foreign currencies are translated into the functional currency of the Company at exchange rates prevailing at the transaction dates. Monetary assets and liabilities are retranslated at the exchange rates at the date of the statement of financial position. Exchange gains and losses on translation or settlement are recognized in profit or loss for the current period. Monetary assets and liabilities denominated in foreign currencies are retranslated at the functional currency rate of exchange ruling at the end of each reporting period. All gains and losses on translation of these foreign currency transactions are included in profit or loss. Cash and Cash Equivalents Cash and cash equivalents consist of cash on hand, deposits in banks and highly liquid instruments which are readily convertible into cash with maturities of three months or less. Property and Equipment Property and equipment is carried at cost, less accumulated depreciation and accumulated impairment losses. The cost of property and equipment consists of the purchase price, any costs directly attributable to bringing the asset to the location and condition necessary for its intended use and an initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located. Equipment is derecognized upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the derecognition of the asset, determined as the difference between the net disposal proceeds and the carrying amount of the asset, is recognized in net (loss) or income in the consolidated statements of operations. Where property and equipment comprises major components with different useful lives, the components are accounted for as separate equipment. Expenditures incurred to replace a component of property and equipment that is accounted for separately, including major inspection and overhaul expenditures are capitalized. Assets Method Useful life Buildings Straight line 40 years Equipment Straight line 5 years Furniture Straight line 5 years Vehicles Straight line 3-5 years Exploration and evaluation assets Exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Exploration and evaluation expenditures are capitalized as incurred including for expenditures associated with the acquisition of exploration and evaluation assets through a business combination or asset acquisition which are recognized as assets. Exploration and evaluation expenditures are assessed for impairment when facts and circumstances suggest that the carrying amount of exploration and evaluation assets may exceed its recoverable amount. The recoverable amount of the exploration and evaluation assets is

11 estimated to determine the extent of the impairment loss, if any. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in previous years. Impairment of non-financial assets At each financial position reporting date, the carrying amounts of the Company s exploration and evaluation assets are reviewed to determine whether there is any indication that those assets are impaired. Where such an indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment, if any. Where an impairment loss subsequently reverses, the carrying amount of the asset is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognized for the asset in prior years. A reversal of an impairment loss is recognized immediately in net (loss) or income. Decommissioning, restoration and similar liabilities ( Asset retirement obligation ) The Company records the present value of estimated costs of legal and constructive obligations required to restore the site in the period in which the obligation is incurred. The nature of these restoration activities include dismantling and removing structures, rehabilitating mines and tailings dam, dismantling facilities, closure of plant and waste sites and restoration, reclamation and revegetation of affected areas. The present value of decommissioning and site restoration provision is recorded as a long term liability with an appropriate increase in the carrying value of the related asset by a corresponding amount. The provision is discounted using a nominal, risk free pre-tax discount rate. Charges for accretion and restoration expenditures are recorded as operating activities. The related decommissioning provision is recorded as part of the mineral property and depreciated accordingly. In subsequent periods, the carrying amount of the liability is accreted by a charge to the statements of comprehensive loss to reflect the passage of time and the liability is adjusted to reflect any changes in the timing of the underlying future cash flows. Changes to the obligation resulting from any revisions to the timing or amount of the original estimate of undiscounted cash flows are recognized as an increase or decrease in the decommissioning provision, and a corresponding change in the carrying amount of the related long lived asset. Where rehabilitation is conducted systematically over the life of the operation, rather than at the time of closure, or provision is made for the estimated outstanding continuous rehabilitation work at each statement of financial position date and the cost is charged to the statement of comprehensive loss. The Company has no environmental rehabilitation obligations recognized as of June 30, 2013 and March 31, 2013.

12 Financial Instruments All financial instruments are required to be measured at fair value on initial recognition. The fair value is based on quoted market prices, unless the financial instruments are not traded in an active market. In this case, the fair value is determined by using valuation techniques like the Black- Scholes option pricing model. Measurement in subsequent periods depends on the classification of the financial instrument. At initial recognition, the Company classifies its financial instruments in the following categories depending on the purpose for which the instruments were acquired: Fair value through profit or loss ( FVTPL ) A financial asset or liabilities are classified at fair value through profit or loss if it is classified as held for trading or is designated as such upon initial recognition. Financial assets are designated as at FVTPL, if the Company manages such investments and makes purchase and sale decisions based on their fair value in accordance with the Company s risk management or investment strategy. Attributable transaction costs are recognized in profit or loss when incurred. Financial assets classified as FVTPL are stated at fair value with any resultant gain or loss recognized in profit or loss. The net gain or loss recognized incorporates any dividend or interest earned on the financial asset. Held-to-maturity These assets are non-derivative financial assets with fixed or determinable payments and fixed maturities that the Company s management has the positive intention and ability to hold to maturity. Held-to-maturity investments are recognized on a trade-date basis and are initially measured at fair value, including transaction costs. Subsequent to initial recognition, these assets are measured at amortized costs using the effective interest method. If there is objective evidence that the asset is impaired, determined by reference to external credit ratings and other relevant indicators, the financial asset is measured at the present value of estimated future cash flows. Any changes to the carrying amount of the investment, including impairment losses, are recognized in the statement of operation and comprehensive loss. Available-for-sale ( AFS ) Non-derivative financial assets not included in the above categories are classified as available-forsale. They are carried at fair value with changes therein, other than impairment losses, interest calculated using the effective interest method and foreign currency differences on AFS monetary items, recognized in other comprehensive income or loss. When an investment is derecognized or is determined to be impaired, the cumulative gain or loss previously recognized in equity is transferred to profit or loss for the period. Loans and receivables Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are initially recognized at fair value plus any directly attributable transaction costs. Subsequent to initial recognition loans and receivables are measured at amortized cost using the effective interest method, less any impairment losses.

13 Other financial liabilities at amortized cost Other financial liabilities are initially measured at fair value, net of transaction costs, and are subsequently measured at amortized cost using the effective interest method, with interest expense recognized on an effective yield basis. The following is a summary of significant categories of financial instruments outstanding at June 30, 2013 and 2012: Cash and cash equivalents Sundry receivables Trade and other payables Fair value through profit or loss Loans and receivables Financial liabilities Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at each period end. Financial assets are impaired when there is objective evidence that, as an objective evidence of impairment could include the following: - Significant financial difficulty of the issuer or counterparty; or - Default or delinquency in interest or principal payments; or - It becoming probable that the borrower will enter bankruptcy or financial reorganization. For financial assets carried at amortized cost, the amount of the impairment is the difference between the asset s carrying amount and the present value of the estimated future cash flows, discounted at the financial asset s original effective interest rate. The carrying amount of financial assets is reduced by the impairment loss directly for all financial assets with the exception of sundry receivable, where the carrying amount is reduced through the use of an allowance account. When a sundry receivable is considered uncollectible, it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognized in profit or loss. Share-based Payments The Company grants stock options to buy common shares of the Company to directors, officers and certain consultants. The Board of Directors grants such options for periods of up to five (5) years with an immediate vesting period at price equal to closing Market Price on the grant date Income Taxes Any income tax on profit or loss for the period presented comprises current and deferred tax. Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in equity or other comprehensive income, in which case the income tax is recognized in equity or other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted,

14 or substantively enacted, at the end of the reporting period, and any adjustment to tax payable in respect of previous years. Current tax assets and current tax liabilities are only offset if a legally enforceable right exists to set off the amounts, and the Company intends to settle on a net basis, or to realize the asset and settle the liability simultaneously. Deferred tax is provided for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Temporary differences are not provided for the initial recognition of assets or liabilities that affect neither accounting nor taxable profit. The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, on a non-discounted basis using tax rates at the end of the reporting period applicable to the period of expected realization. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the asset can be utilized. Earnings (Loss) Per Share The Company presents basic earnings/loss per share data for its common shares, calculated by dividing the loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings/loss per share does not adjust the loss attributable to common shareholders or the weighted average number of common shares outstanding when the effect is anti-dilutive. Flow Through Common Shares The Company finances a portion of its exploration activities through the issuance of flow-through common shares. On the date of issuance of the flow-through common shares, the premium relating to the proceeds received in excess of the closing market price of the Company s shares is allocated to liabilities. Under the terms of the flow-through common share issues, the tax attributes of the related expenditures are renounced to investors. The premium liability is reduced pro-rata based on the actual amount of flow-through eligible expenditures incurred during the reporting period. The reduction to the premium is recognized through profit and loss. Where the Company has unused tax benefits on loss carryforwards, the Company recognized the increase in deferred tax liabilities resulting in an offsetting recovery of deferred income taxes. Business Combinations The acquisition method of accounting is used to account for business combinations by the Company. The consideration transferred for the acquisition of a business is the fair values of the assets transferred, the liabilities incurred and the equity interests issued. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition-related costs are expensed as incurred except for share issuance costs. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. On an acquisition-byacquisition basis, the Company recognizes any non-controlling interest in the acquiree at the fair

15 value. Subsequently, the carrying amount of non-controlling interest is the amount of the interest at initial recognition plus the non-controlling interest's share of the subsequent changes in equity. New Accounting Standards and Interpretations Not Yet Adopted Standards issued but not yet effective up to the date of issuance of the Company s financial statements are listed below. This listing is of standards and interpretations issued, which the Company reasonably expects to be applicable at a future date. The Company intends to adopt those standards when they become effective. - IFRS 9 Financial Instruments: Classification and Measurement effective for annual periods beginning on or after January 1, 2015, with early adoption permitted, introduces new requirements for the classification and measurement of financial instruments. - IFRS 10 Consolidated Financial Statements effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, establishes principles for the presentation and preparation of consolidated financial statements when an entity controls one or more other entities. IFRS 11 Joint Arrangements effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. - IFRS 12 Disclosure of Interests in Other Entities effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, requires the disclosure of information that enables users of financial statements to evaluate the nature of, and risks associated with its interests in other entities and the effects of those interests on its financial position, financial performance and cash flows. - IFRS 13 Fair Value Measurement effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, provides the guidance on the measurement of fair value and related disclosures through a fair value hierarchy. - IAS 1 Presentation of Financial Statements effective for annual periods beginning on or after July 1, 2012, with early adoption permitted, requires an entity to present separately the items of OCI that may be reclassified to profit or loss in the future from those that would never be reclassified to profit or loss. - IAS 27 Separate Financial Statements effective for annual periods beginning on or after January 1, 2013, with early adoption permitted, the requirements relating to separate financial statements will remain unchanged and will be included in the amended IAS 27. The other portions of IAS 27 will be replaced by IFRS 10. The Company is in the process of assessing the impact of these standards, amendments and interpretations on its consolidated financial statements.

16 4. Property and equipment June 30, 2013 March 31, 2013 Cost Accumulated Amortization Net Cost Accumulated Amortization Net Furniture 6,300 1,565 4,735 6,300 1,260 5,040 Vehicles 104,590 18,917 85, ,590 15,379 89,211 Buildings 4,493, ,429 4,353,317 4,493, ,343 4,381,403 Net Asssets 4,604, ,911 4,443,725 4,604, ,982 4,475, Acquisitions Acquisition Manila Investments (Pty) Inc. & Grove Mining (Pty) Inc. On April 23, 2012, the Company successfully closed the transaction of acquiring 80% of the outstanding shares on Manila Investments (Pty) Inc. ( Manila ). Through the ownership of Manila, the Company now controls Grove Mining (Pty) Inc. which owns the abandoned Kombat mining operations and related mining licenses. The balance of the Manila ownership is held by local (Namibian) partners and the Government of Namibia. The total purchase price of the transaction was estimated at $16,867,515 consisting of cash of $10,011,515, 8,000,000 common shares at a fair value of 0.50, and 7,000,000 share purchase warrants exercisable at a price of $0.75 each for one common share of the Company for a period of 3 years. The common shares had an acquisition date fair value of $4,000,000. The fair value of the common share purchase warrants was estimated to be $2,856,000 using the Black-Scholes option pricing model. The assumptions used in the calculation of the fair value of the warrants were: dividend yield $nil, expected volatility of 153.5%, forfeiture rate of nil, an expected life of three year, and a risk-free rate of 1.35%. The Kombat Copper Project located in Northern Namibia consists of the historically producing Kombat Mine and related assets, including all mining surface infrastructure and equipment and mining licenses related thereto. Net Assets Acquired Property and equipment $ 4,493,746 Exploration and evaluation assets 16,590,647 Portion relating to non-controlling interests (4,216,879) $ 16,867,515 Consideration Cash $ 10,011,515 Common Shares (8,000,000 common shares) 4,000,000 Warrants (7,000,000 common share purchase warrants) 2,856,000 $ 16,867,515

17 6. Exploration and Evaluation Assets Note Ontario Inc. Congo-Namibia (Pty) Inc. Manila Investments (Pty) Inc. Total Balance, March 31, 2012 $ 2,654,786 $ 1,931,250 $ - $ 4,586,036 Acquisitions costs ,590,648 16,590,648 Exploration Work , , ,313 Balance, March 31, 2013 $ 2,655,125 $ 2,197,838 $ 17,111,034 $ 21,963,997 Acquisitions costs Exploration Work - 2, , ,794 Balance, June 30, 2013 $ 2,655,125 $ 2,200,506 $ 17,277,160 $ 22,132, Ontario Inc Ontario Inc. includes the following properties: Lake Abitibi Property As at June , the Company holds 8 active claims on this property; which constitutes a total of 120 units. To keep the Company s claims in good standing, it is required by the government authority to perform qualified assessment work on each unit in the amount of $400 per unit every 12 months. In the event of default, the claim over the unit will expire and be considered abandoned as the Company will lose rights to perform further exploration work on the unit. As at June 30, 2013, the Company has expended sufficient capital to ensure they remain in good standing. Stimson Property As at June 30, 2013, the Company holds 7 active claims on this property; which constitutes a total of 111 units. To keep the Company s claims in good standing, it is required by the government authority to perform qualified assessment work on each unit in the amount of $400 per unit every 12 months. In the event of default, the claim over the unit will expire and be considered abandoned as the Company will lose rights to perform further exploration work on the unit. As at June 30, 2013, the Company has expended sufficient capital to ensure they remain in good standing.

18 Congo Namibia (Pty) Inc. On January 23, 2012, the Company acquired 80% of the shares of Congo Namibia (Pty) Inc. whose assets include a 100% interest in five (5) Exclusive Prospecting Licenses covering northern Namibia. To maintain the licenses in good standing, the Company is required to pay between $250 and $750/license in stamp duties in addition to the following amounts for exploration activities: Year $ Amount , ,987 Manila Investments (Pty) Inc. On April 23, 2012, the Company purchased through the acquisition of Manila Investments (Pty) Inc., 80% of the mining assets commonly known as the Kombat mine whose assets include a 100% interest in five (5) Mining Licenses covering northern Namibia. See note 5. As at June 30, 2013, the Company has expended sufficient capital to ensure they remain in good standing. For the coming years, there are no further requirements to keep the properties in good standing. 7. Share Capital Authorized: Issued: Unlimited number of voting common shares Unlimited number of non-voting preferred shares, issuable in series Period ended Period ended June 30, 2013 June 30, 2012 Note Number Stated Value Number Stated Value Common shares Balance, beginning of period 82,295,047 $27,862,692 47,293,547 $17,712,672 Issuance of common shares as private placement ,314,000 7,780,000 Share issuance costs (1,829,355) Acquisition of Manila Investments (Pty) Inc ,000,000 4,000,000 Warrants exercised , ,375 Balance, end of period 82,295,047 $27,862,692 82,295,047 $27,862,692 On April 23, 2012, the Company purchased 80% of Manila Investments (Pty) Inc. for aggregate of cash of $10,011,515, issuance of 8,000,000 common shares at a fair value of $0.50, and 7,000,000 share purchase warrants exercisable for $0.75 and is exercisable for a period for 3 years. Through the ownership of Manila, the Company now controls the Kombat mining operations. The balance of the ownership in the mine is held by local (Namibian) partners and the Government of Namibia. See note 5 for full detail on the acquisition.

19 The Company also closed the subscription agreement as announced on February 29, 2012, whereby the Company completed a subscription receipt financing at $0.50 per subscription unit for aggregate funds of $13,157,000 which was held in escrow and released at the completion of the purchase of 80% of the shares of Manila. Each unit consisted of one common share of the Company and one half of one common share purchase warrant. Each warrant is exercisable until March 1, 2015 at an exercise price of 0.75 per common share and were assigned a value of $5,377,000, using the Black-Sholes valuation model see note 5 for valuation details. A total of 26,314,000 share units were issued. Options: The Company has one stock option plan. Under the plan, the Company may grant options to its directors, officers, employees and consultants for up 10% of the outstanding common stock or 8,229,505 as at June 30, Under the plan, the exercise price of each option must not be less than the market price of the Company s stock on the date of grant, less any allowable discount. The maximum term of the stock option is five years. During the period ended June 31, 2013, the Company issued a total of Nil (2012 Nil) options to officers and directors of the Company. June 30, 2013 March 31, 2013 Stock Options Weighted average exercise price Stock Options Weighted average exercise price Outstanding, Beginning of period 4,050,000 $ ,150,000 $ 0.35 Granted , Exercised - - Outstanding, End of period 4,050,000 $ ,050,000 $ 0.35 Exercisable, End of period 4,050,000 $ ,050,000 $ 0.35 No options were forfeited or expired during the period (2012 no options forfeited).

20 Contractual Life of Options Outstanding: Exercise Price Number of Options Outstanding Weighted Average Life (in years) Weighted Average Exercise Price , , , , , , , , , , , ,050, During the year, certain officers and directors have left the Company, therefore, their weighted average lives on certain options issued have decreased compared to the standard five years. There is no impact on the interim condensed consolidated financial statements. Detailed option summary and valuation assumptions: Option Summary Black-Scholes Assumptions Grant Date Options Exercise Price Expiry Date Dividend Yield (%) Expected Volatility (%) Expected Life (years) Risk Free Rate (%) Forfiture Rate 26-Apr , Apr Jun , Jun Oct-11 1,600, Oct Feb , Feb Apr , Apr Jan , Jan ,050,000

21 Warrants: A summary of the status of the Company's outstanding share purchase warrants as at June 30, 2013 and June 30, 2012 and changes during the years then ended is as follows: Notes June 30, 2013 March 31, 2013 Number of Number of Warrants Amount Warrants Amount Outstanding, Beginning of period 36,031,352 $ 10,770,611 14,740,872 $ 1,855,486 Issued in relation to brokered private placement in relation to the Kombat Transaction ,977,980 6,121,000 Acquisition of the Kombat Asset (Manila Investments (Pty) Inc.) ,000,000 2,856,000 Exercised - - (687,500) (61,875) Outstanding, End of period 36,031,352 $ 10,770,611 36,031,352 $ 10,770,611 No warrants were forfeited in the period (2012 no warrants forfeited). 8. Contributed surplus June 30, 2013 March 31, 2013 Balance, Beginning of period $ 2,518,717 $ 2,187,717 Share based compensation - 331,000 Balance, End of period $ 2,518,717 $ 2,518, Loss Per Share Basic and diluted loss per share has been calculated based on the weighted average number of common shares outstanding during the period of 82,295,047 (June 30, ,929,844).

22 10. Supplemental Cash Flow Information June Changes in non-cash working capital balances: Sundry receivables $ 217,458 $ (264,769) Deposits 8,578 (690,910) Foreign exchange related to non-controlling interest 389,264 - Accounts payable and accrued liabilities (246,372) 246,860 $ 368,927 $ (708,819) The company paid $Nil ( $Nil) in income taxes or interest on debt. Non-cash transaction in the period not included on the Statement of Changes in Financial position include the following: Note June 30, Warrants Warrants Shares /Options Shares /Options The following transaction were settled with shares/warrants/options Manila Investments (Pty) Inc acquision ,000,000 2,856, Related Party Transactions The following transactions were made at the fair value amount, in the normal course of operations, being the amount agreed to by the parties. Rent of $4,500 was paid to a company with one common director. No amount remain in accounts payable as at June 30, 2013 (2012 Nil)

23 The remuneration of directors and key management which include the Chief Executive Officer, Chief Financial Officer and Executive VP of the Company for the periods ended were as follows: June 30, (restated) Salaries and benefits $ 126,000 $ 151,035 Share based payments - 560,000 $ 126,000 $ 711, Financial Instruments The Company s activities are exposed to financial risks: fair value risk, credit risk, market risks, liquidity risk, interest rate risk and foreign currency risk. (a) Fair values The Company has categorized its financial instruments as follows: i) Cash and cash equivalents are categorized as fair value through profit or loss and recorded at fair value. Cash and cash equivalents are classified as Level 1 within the fair value hierarchy. ii) Sundry receivables and funds held in trust are categorized as loans and receivables, and are recorded at amortized cost using the effective interest rate method. Due to the short term nature of receivables, the Company estimates that their fair value approximates their face value and have been adjusted to account for amounts that will not be collected. iii) Trade payable and accrued liabilities are categorized as other financial liabilities and are recorded at their amortized cost using the effective interest rate method. Due to the short term nature of trade payable and accrued liabilities, the Company estimates that their fair value approximates their face value. (b) Risks The Company is exposed to financial risks arising from its financial assets and liabilities. The Company manages its exposure to financial risks by operating in a manner that minimizes its exposure to the extent practical. The main financial risks affecting the Company are as follows: Credit risk Credit risk is the risk that one party to a financial instrument will cause a financial loss for the other party by failing to discharge an obligation. As at June 30, 2013, amounts exposed to credit risk include $383,857 in cash (March 31, $1,012,326) and $168,586 (March 31, $386,044) related to sundry receivables. The Company is exposed to credit risk with respect to its cash and sundry receivables. However, this risk is minimized as cash is held at a major financial institution. With regards

24 to sundry receivables, these amounts represent sales tax receivable from various government agencies. Market risk Market risk consists of foreign exchange and interest rate risk that may affect the value of the Company's financial instruments. As the Company acquires foreign properties, the Company s risk of exposure to foreign currencies increases. As at June 30, 2013, the risk has been judged by management to be minimal. As the Company moves forward with its growth plans, strategies will be developed to manage foreign currency changes. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they are due. The Company's approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when due without incurring unacceptable losses or risking harm to the Company's reputation. Also see note 13 for a discussion on the Company's capital management policy. As at June 30, 2013, all trade payable and accrued liabilities are current and therefore no liquidity risk. As a result, the Company estimates that with the projected cash flows from financings and the current liquidity position, it has enough funds available to meet its financial liabilities and future financial liabilities from its commitments for the current year. Foreign currency risk The Company operates internationally and will be exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the Canadian Dollar ( CDN dollar ), and the Namibian Dollar ( NAM dollar ). Kombat Copper s functional currency is the CDN dollar. Foreign exchange risk arises from future commitments, assets and liabilities that maybe denominated in a currency that is not the functional currency. As the Company progress on its work programs, a foreign exchange management program will be developed. The Company s cash deposits are largely denominated in CDN dollar. A future foreign exchange risk arises from the funds deposited in CDN dollar which will have to be exchanged for working capital purposes. A fluctuation of 10% in the foreign exchange rate of the NAM dollar would have a $16,000 ( nil) impact on the consolidated financial statements. 13. Capital Management The Company s policy is to maintain a strong capital base with the following objectives: Maintaining financial flexibility Maintaining creditor and investor confidence, and Sustaining the future development of the business. The Company manages its capital and makes adjustments to it in light of changes in economic conditions and the risk characteristics of the underlying assets. The most significant alternatives available for the management of the capital structure include adjusting capital spending to manage projected debt levels or to issue shares when management and the Board of Directors feel the timing is appropriate.

25 The Company considers its capital to be shareholders equity, comprising of share capital, warrants, contributed surplus and deficit, which at June 30, 2013 totaled $21,348,006 (March 31, 2013 $22,351,135). 14. Restatement of prior year amounts On February 8, 2012, the Company issued 500,000 options to its directors that were immediately vested and with exercise price of $0.57 per share over the five year life. The fair value of these options using Black-Scholes pricing model with the inputs for volatility of 166.5%, risk free interest rate of 1.29%, dividend and forfeiture rates of nil was calculated at $306,000. This amount was not recorded in the share-based payments with corresponding increase to the contributed surplus in the Company s March 31, 2012 year end consolidated financial statements, and were instead recorded in the Company s June 30, 2012 interim condensed consolidated financial statements. Amount was corresponding restated to the March 31, 2012 statements and this adjustment has been reflected in the comparative period. 15. Subsequent event On July 29, 2013 the Company announced that it has launched a private placement financing (the Offering ) of up to 30,000,000 units (each, a Unit ), each Unit being comprised of one common share (a Common Share ) and one common share purchase warrant (a Warrant ) at a purchase price of $0.10 per Unit for gross proceeds up to $3,000,000. Each Warrant shall entitle the holder thereof to acquire one Common Share at an exercise price of $0.20 per common share at any time before the date that is three years from the date of issue, subject to an acceleration provision whereby if at any time after four months and one day from the closing of the Offering, the Common Shares trade at $0.30 per share or higher on the TSX Venture Exchange (on a volume weighted adjusted basis) for a period of 30 days, the Company will have the right to accelerate the expiry date of the Warrants to the date that is 30 days after the Company issues a news release announcing that it has elected to exercise this acceleration right.