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 IncOrbit Garant Drilling Inc pursuant to a Certificate of Amendment dated January 31 2007 and subsequently to F orage Orbit Garant IncOrbit 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 intercompany 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 17530771 excluding acquisition costs payable through the issuance of 2500000 common shares of 4382463 Canada Inc and 15030771 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 5364216 has been accounted for as goodwill 7000000 as customer relationship and 910000 as noncompete 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 24031195 excluding acquisition cos ts payable through the issuance of 11538000 common shares of the company and 12493195 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 4881547 has been accounted for as goodwill 5600000 as customer relationship and 1200000 as noncompete agreement These amounts are not deductible for income tax purposes F10