ORBIT GAR ANT DRILLING INC. NOTES TO THE CONSOLID A TED FINANCIAL ST A TEMENTS (Amounts as at March 31, 2008 and for the nine and three months ended March 31, 2008 and for the six and three months ended March 31, 2007 are unaudited) 1. DESCRIPTION OF BUSINES S Orbit Garant Drilling Inc. (the ‘‘company’’), amalgamated under the Canada Business Corporations A ct, operates mainly an underground and surface diamond drilling business. The company has operations in Canada, United States and Central and South America. 2. AMALGAMA TION The company resulted from the amalgamation under the Canada Business Corporations A ct of F orages Garant & F r ` eres Inc., Garant Drilling GP Inc., 4382447 Canada Inc. and Ironbridge Equity Holdings Inc. pursuant to articles of amalgamation dated January 31 , 2007. The resulting company, then named F orages Garant & F r ` eres Inc., changed its name to F orages Orbit Garant Inc./Orbit Garant Drilling Inc. pursuant to a Certificate of Amendment dated January 31, 2007 and subsequently to F orage Orbit Garant Inc./Orbit Garant Drilling Inc. pursuant to a Certificate of Amendment dated March 6, 2007. F orages Garant & F r ` eres Inc. resulted from the amalgamation of 4382463 Canada Inc. and F orages Garant & F r ` eres Inc. under a Certificate of Amalgamation dated October 1, 2006. Garant Drilling GP Inc., Ironbridge Equity Holdings Inc., 4382447 Canada Inc. and Garant Drilling LP were created on September 16, 2006 and 4382463 Canada Inc. was created on September 25, 2006. Garant Drilling LP was dissolved on January 30, 2007. The net a ssets of each constituent company is as follows based on the net assets of each company as if the amalgamation had occurred on September 16, 2006 being the date of incorporation of 4382447 Canada Inc.: Net assets $ 4382463 Canada Inc. .............................................................. 1 0 0 Garant Drilling GP Inc. ............................................................ 1 0 0 Ironbridge Equity Holdings Inc. ....................................................... 1 0 0 4382447 Canada Inc. .............................................................. 1 301 Elimination of inter-company investment .................................................. (300) 1 The consolidated financial statements, for the three and six months ended March 31, 2007 and for the nine months ended June 30, 2007 respectively, reflect the results of operations as if this amalgamation had occurred on September 16, 2006. There were no opera tions between September 16 and 29, 2006. 3. BUSINES S ACQUISITIONS Acquisition of F orages Garant & F r ` eres Inc. On September 30, 2006, pursuant to a share agreement between 4382463 Canada Inc. and the shareholders of F orages Garant & Fr ` eres Inc., 4382463 Canada Inc. acquired all issued and outstanding shares of F orages Garant & F r ` eres Inc. for a total consideration of $17,530,771 (excluding acquisition costs) payable through the issuance of 2,500,000 common shares of 4382463 Canada Inc. and $15,030,771 in cash. The results of operations of F orages Garant & F r ` eres Inc. are included in the consolidated financial statements from the effective date of acquisition. On September 30, 2006, F orages Garant & F r ` eres Inc. was dissolved in 4382463 Canada Inc. pursuant to an amalgamation of the companies under the Canada Business Corporations A ct, and the resulting company changed its name to F orages Garant & F r ` eres Inc. F ollowing this transaction, an amount of $5,364,216 has been accounted for as goodwill, $7,000,000 as customer relationship and $910,000 as non-compete agreement. These amounts are not deductible for income tax purposes. Acquisition of F orage Orbit Inc. On January 31, 2007, pursuant to a share agreement between the company and the shareholders of F orage Orbit Inc. (‘‘Orbit’’), t he company acquired all issued and outstanding shares of Orbit for a total consideration of $24,031,195 (excluding acquisition cos ts) payable through the issuance of 11,538,000 common shares of the company and $12,493,195 in cash. The results of operations of O rbit are included in the consolidated financial statements from the effective date of acquisition. F ollowing this transaction, an amount of $4,881,547 has been accounted for as goodwill, $5,600,000 as customer relationship and $1,200,000 as non-compete agreement. These amounts are not deductible for income tax purposes. F-10