Download - NWM MINING CORPORATION

Document Sample
Download - NWM MINING CORPORATION Powered By Docstoc
					                            NWM MINING CORPORATION

                    CONSOLIDATED INTERIM FINANCIAL STATEMENTS


                                     SEPTEMBER 30, 2010




                                                                Page

Consolidated Interim Balance Sheet                                2

Consolidated Interim Statement of Income                          3

Consolidated Interim Statement of Retained Earnings (Deficit)     4

Consolidated Interim Statement of Cash Flows                      5

Notes to Consolidated Interim Financial Statements              6 - 26




                                             -1-
                                              NWM MINING CORPORATION
                                          CONSOLIDATED INTERIM BALANCE SHEET



As at                                                                                             September 30, 2010 December 31, 2009


                                                                  ASSETS
Current
 Cash and cash equivalents                                                                           $         2,449,671   $    1,099,954
 Inventories and stockpiled ore                                     note 6                                       454,724          416,141
 Prepaid expenses and advances                                                                                   228,101          228,099
 Sales taxes recoverable                                                                                         443,828          215,797
                                                                                                               3,576,324        1,959,991
Deferred exploration expenditures                                   note 7                                13,633,460           12,293,748
Property, plant and equipment                                       note 8                                15,165,257           10,968,513
                                                                                                     $    32,375,041       $   25,222,252

                                                                LIABILITIES
Current
 Accounts payable                                                                                    $         1,875,957   $      522,461
 Promissory notes                                                   note 9                                           -          2,098,800
 Loan facility and capital lease obligation                         note 10                                    1,116,120        1,117,500
 Long term debt                                                     note 11                                          -          1,027,173
                                                                                                               2,992,077        4,765,934
Promissory notes                                                    note 9                                11,278,100                   -
Loan facility                                                       note 10                                          -          3,386,924
Capital lease obligation                                            note 10                                    6,265,842        6,311,392
Asset retirement obligation                                         note 12                                     250,000           250,000
                                                                                                          20,786,019           14,714,250

                                                      SHAREHOLDERS' EQUITY

Share capital                                                       note 13                               34,799,942           30,150,543
Retained earnings (deficit)                                                                              (23,210,920)          (19,642,541)
                                                                                                          11,589,022           10,508,002
                                                                                                     $    32,375,041       $   25,222,252


Going concern, (note 1)
Agreements and commitments, (note 16)
Contingency, (note 17)

Approved on behalf of the Board:


"C. Berlet"                                                                                      "G. Harper"
Mr. C. Berlet, Director                                                                          Mr. G. Harper, Director


                                   The accompanying notes are an integral part of these financial statements
                                                                    -2-
                                                 NWM MINING CORPORATION
                                       CONSOLIDATED INTERIM STATEMENT OF INCOME



For the period ending September 30                  2010                         2009                            2010                   2009

                                                            (Three months)                                              (Nine months)

Expenses
  Accretion - convertible debenture          $            -               $          54,500            $          127,167        $        145,333
  Advertising and promotion                           138,298                        22,664                       345,182                  36,931
  Amortization                                         41,478                         8,974                       120,835                  70,249
  Director fees                                         2,835                           -                           2,835                     -
  Financial advisory fees                                 -                          30,000                        70,000                  90,000
  Financing fees                                      431,222                           -                         543,627                 678,859
  Interest on convertible debenture                       -                          30,172                        53,020                  86,193
  Interest on loan facility                           111,444                        41,187                       175,740                  98,277
  Interest on promissory notes                        235,804                       106,820                       407,679                 216,666
  Management fees                                      73,765                       111,160                       232,485                 212,305
  Office and general                                   45,725                        75,257                       142,517                 131,472
  Plant costs                                         (41,602)                      821,229                       574,869               1,505,524
  Professional fees                                   228,752                        76,727                       439,151                 274,931
  Rent                                                 10,809                         8,653                        25,976                  29,036
  Secretarial and bookkeeping                          29,745                        20,468                        83,476                  93,651
  Shareholders' information                            30,658                         5,785                       103,930                  46,944
  Stock option expense                                 39,128                           -                          83,010                     -
  Travel                                               29,510                        49,936                        68,673                  61,917
  Unrealized foreign exchange                          25,508                      (255,676)                       (1,355)               (355,809)
Total expenses                                      1,433,079                    1,207,856                       3,598,817              3,422,479
Other revenues
 Incidental gold pour revenues (net)                       -                        125,868                           -                   468,481
 Investment income                                      27,783                       23,873                        30,438                  35,723
Total other revenues                                    27,783                      149,741                        30,438                 504,204
Net income (loss) for the period             $     (1,405,296)            $     (1,058,115)            $     (3,568,379)         $      (2,918,275)




Loss per share (basic and diluted)


Loss per share for the period                $          (0.004)           $             (0.01)         $             (0.01)      $           (0.02)


Weighted average number of
    common shares                                216,186,404                  123,871,027                  216,186,404               123,871,027




                                     The accompanying notes are an integral part of these financial statements
                                                                      -3-
                                              NWM MINING CORPORATION
                      CONSOLIDATED INTERIM STATEMENT OF RETAINED EARNINGS (DEFICIT)



For the period ending September 30                2010                         2009                            2010                   2009

                                                          (Three months)                                              (Nine months)

Balance at beginning of period             $ (21,805,624)               $ (14,187,897)               $ (19,642,541)            $ (12,327,737)

Net income (loss) for the period                 (1,405,296)                  (1,058,115)                  (3,568,379)                (2,918,275)


Balance at end of period                   $ (23,210,920)               $ (15,246,012)               $ (23,210,920)            $ (15,246,012)




                                   The accompanying notes are an integral part of these financial statements
                                                                    -4-
                                                NWM MINING CORPORATION
                                    CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS

For the period ending September 30                 2010                         2009                            2010                    2009

                                                           (Three months)                                              (Nine months)
Cash provided by (used by)
Operating activities
Operations
 Net income (loss) for the period           $     (1,405,296)            $     (1,058,115)            $     (3,568,379)         $      (2,918,275)
 Items not involving cash
    Accretion - convertible debenture                    -                          54,500                       127,167                 145,333
    Amortization                                      41,478                         8,974                       120,835                  70,249
    Financing fee - common shares                    492,223                           -                         552,223                 250,000
    Financing fees                                       -                             -                             -                   274,560
    Stock option compensation                         39,128                           -                          83,010                     -
    Stock option compensation -
      investor relations                               54,247                          -                         113,154                      -
    Unrealized foreign exchange                        25,508                     (255,676)                       (1,355)                (355,809)
                                                    (752,712)                  (1,250,317)                  (2,573,345)                (2,533,942)
Changes in non-cash operating accounts
 Accounts receivable                                     -                          (1,331)                           -                   497,605
 Inventories and stockpiled ore                      (43,163)                      413,822                        (38,583)                445,002
 Prepaid expenses and advances                        73,531                        (6,014)                             (2)                 2,324
 Sales taxes recoverable                              48,046                       220,307                       (228,031)                390,409
 Accounts payable                                    626,729                       182,113                      1,353,496                (134,892)
                                                      (47,569)                    (441,420)                 (1,486,465)                (1,333,494)
Investing activities
  Deferred exploration expenditures                 (506,263)                      (87,461)                 (1,132,212)                  (227,236)
  Property, plant and equipment                   (3,047,018)                      (14,648)                 (4,317,579)                (6,398,069)
                                                  (3,553,281)                     (102,109)                 (5,449,791)                (6,625,305)
Financing activities
  Common shares and warrants                         230,400                    2,679,813                    3,133,512                  2,969,953
  Promissory note                                  7,618,992                      (59,134)                   9,740,655                  1,653,842
  Long term debt                                         -                            -                     (1,154,340)                   (60,723)
  Loan facility and capital lease                 (3,684,040)                     219,940                   (3,433,854)                 6,064,856
                                                   4,165,352                    2,840,619                       8,285,973              10,627,928
Increase (decrease) in cash                          564,502                    2,297,090                       1,349,717               2,669,129
Balance at beginning of period                     1,885,169                       639,107                      1,099,954                267,068
Balance at end of period                    $      2,449,671             $      2,936,197             $         2,449,671        $      2,936,197

Represented by
Cash                                        $      2,424,671             $      2,911,197             $         2,424,671       $       2,911,197
Short term investment - GIC                           25,000                       25,000                          25,000                  25,000
                                            $      2,449,671             $      2,936,197             $         2,449,671       $       2,936,197

Cash payments made
Interest                                    $        347,248             $         136,992            $          636,439        $        211,917
Income taxes                                $            -               $             -              $              -          $            -


                                    The accompanying notes are an integral part of these financial statements
                                                                     -5-
                                              NWM MINING CORPORATION
                                 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                       SEPTEMBER 30, 2010



1.   Nature of business and going concern


Nature of business
    The principal operations of the Company are as follows -
     the commercialization of two gold properties and a gold recovery plant located in Mexico

     the acquisition, exploration and development of mineral properties located in Mexico.



Corporate structure
    The consolidated statements include the accounts of the Company and its Mexican subsidiaries Minera Columbia de
     Mexico S.A. de C.V. (MCM) and Servicios Richmond York S.A. de C.V. (SRY).


Going concern
    The ability of the Company to continue and discharge its liabilities is dependent upon -
     the commercialization of two gold properties and a gold recovery plant located in Mexico

     the successful exploration of its mining claims and developing and implementing a plan to exploit these mining claims

     If the going concern assumptions were not appropriate for the financial statements, then adjustments would be necessary
     in the carrying values of assets and liabilities, the reported revenues and expenses, and the balance sheet classifications.

     Several conditions exist with regard to this going concern assumption -
      significant operating losses have been incurred over the past several fiscal years

      the Company is presently unable to self-finance operations

      there are no assurances that sufficient funding will be available


       The following is some relevant information as at           September 30, 2010        December 31, 2009
                      Working capital (deficit)                        $     584,247         $  (2,805,943)
                      Accumulated deficit                              $ (23,210,920)        $ (19,642,541)
                      Long term debt                                   $ 17,543,942          $   9,698,316




2.   Significant accounting policies


New accounting policies
   These interim statements follow the same accounting policies and methods of application as the most recent annual
     financial statements dated December 31, 2009 with exception of the following -

     Financial Instruments - Disclosures
     Effective January 1, 2010, the Company adopted CICA Section 3862, “Financial Instruments – Disclosures,” to include
     additional disclosure requirements about fair value measurement for financial instruments and liquidity risk disclosures.
     These amendments require a three level hierarchy that reflects the significance of the inputs used in making the fair value
     measurements. Fair values of assets and liabilities included in Level 1 are determined by reference to quoted prices in
     active markets for identical assets and liabilities. Assets and liabilities in Level 2 include valuations using inputs other than
     quoted prices for which all significant outputs are observable, either directly or indirectly. Level 3 valuations are based on
     inputs that are unobservable and significant to the overall fair value measurement.




                                                                 -6-
                                             NWM MINING CORPORATION
                                 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                        SEPTEMBER 30, 2010



2.   Significant accounting policies


Disclosure and use of estimates
    The preparation of financial statements in accordance with Canadian generally accepted accounting principles requires
    management to make estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of
    contingent assets and liabilities at the date of the financial statements and the reported amount of revenues and expenses
    during the reporting period. These estimates are reviewed periodically, and as adjustments become necessary, they are
    reported in earnings in the period in which they become known.


Revenue recognition
    Revenue from the sale of metals is recognized in the accounts when persuasive evidence of an arrangement exists, title and
    risk passes to the buyer, collection is reasonably assured and the price is reasonably determinable. Revenue from the sale
    of metals may be subject to adjustment upon final settlement of estimated metal prices, weights and assays. Adjustments
    to revenue for metal prices are recorded monthly and other adjustments are recorded on final settlement. Refining and
    treatment charges are netted against revenue for sales.


Comprehensive income
   Comprehensive income (loss) is the overall change in the net assets of the Company for a period, other than changes
   attributable to transactions with shareholders. It is made up of net income (loss) and other comprehensive income (loss).
   Other comprehensive income (loss) consists of gains and losses affecting shareholders’ equity that, under generally
   accepted accounting principles are excluded from net income (loss). Gains and losses are recognized directly in other
   comprehensive income until the financial asset is derecognized, at which time the cumulative gain or loss previously
   recognized in accumulated other comprehensive income should be recognized in net income for the period. For the
   Company, the primary effect is gains or losses on the Company's investment which is classified as "available-for-sale".


Cash and cash equivalents
    Cash and cash equivalents include cash, and those short-term money market instruments that are readily convertible to
     cash with an original term of less than 90 days.


Inventories and stockpiled ore
    Finished goods, work-in-process and stockpiled ore are valued at the lower of average production cost or net realizable
    value. Production costs include the cost of raw materials, direct labor, mine-site overhead expenses and depreciation and
    depletion of mining interests. Supplies are valued at the lower of average cost or replacement cost.
     The recovery of gold is achieved through the heap leaching process. Under this method, ore is placed on leach pads
     where it is treated with a chemical solution which dissolves the gold contained in the ore. The resulting “pregnant”
     solution is further processed in a plant where the gold is recovered. For accounting purposes, costs are added to ore on
     leach pads based on current mining and leaching costs, including applicable depreciation, depletion and amortization
     relating to mining interests. Costs are removed from ore on leach pads as ounces of gold are recovered based on the
     average cost per recoverable ounce of gold on the leach pad.




                                                               -7-
                                                NWM MINING CORPORATION
                                   NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                         SEPTEMBER 30, 2010



2.   Significant accounting policies


Deferred exploration expenditures
    Mining claims acquisitions and exploration expenditures relating to them are deferred until the properties are brought into
    production or are determined to be economically not viable. When a property is brought into commercial production the
    acquisition costs of the claims and the related deferred exploration expenditures will be depleted on a unit of production
    basis. Should an entire group of mining claims prove to no longer hold a reasonable probability of yielding an economic
    discovery or be abandoned, the acquisition costs and related deferred exploration expenditures will be expensed.
     Commercial production is deemed to have commenced when management determines that the completion of
     operational commissioning of major mine and plant components is completed, operating results are being achieved
     consistently for a period of time and that there are indicators that these operating results will be continued. The Company
     determines commencement of commercial production based on the following factors which indicate that planned
     principal operations have commenced. These would include one or more of the following:
        A significant portion of plant capacity is achieved
        All necessary permits have been obtained
        A significant portion of available funding is directed towards operating activities
        A pre-determined, reasonable period of time has passed

Amortization
   Capital assets are recorded at cost and are amortized over their estimated useful life as follows:
                     Mining equipment                         -                       5 to 10 years straight line
                     Office and computer equipment            -                       20% to 30% declining balance
                     Vehicles                                 -                       30% declining balance

Reclamation and closure cost obligations
    The Company’s mining and exploration activities are subject to various governmental laws and regulations relating to the
    protection of the environment. These environmental regulations are continually changing and are generally becoming
    more restrictive. The Company has made, and intends to make in the future, expenditures to comply with such laws and
    regulations. The Company has recorded a liability and corresponding asset for the estimated future cost of reclamation
    and closure, including site rehabilitation and long-term treatment and monitoring costs, discounted to net present value.
    However, these estimates are subject to change based on changes in circumstances and any new information which
    becomes available.


Income taxes
    The Company follows the asset and liability method of accounting for income taxes. Under this method of tax allocation,
    future income tax assets and liabilities are determined based on differences between the financial statement carrying
    values and their respective income tax values (temporary differences). Future income tax assets and liabilities are
    measured using the tax rates expected in to be in effect when the temporary differences are likely to be recovered or
    settled. The effect on future income tax assets and liabilities of a change in tax rates is included in operations in the period
    in which the change is enacted or substantially assured. The amount of future income tax assets recognized is limited to
    the amount of the benefit that is more likely than not to be realized.




                                                                  -8-
                                              NWM MINING CORPORATION
                                 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                      SEPTEMBER 30, 2010



2.   Significant accounting policies


Foreign currency transactions
    The Mexican subsidiaries are considered an integrated foreign operation and their financial statements are translated using
     the temporal method. Translation gains and losses are included in the consolidated statement of income.
     The exchange rates as at the consolidated balance sheet date are used for monetary assets and liabilities such as cash,
     prepaid expenses and advances, sales taxes recoverable, accounts payable and long term debt and loans.
     Historical exchange rates are used for non-monetary assets and liabilities such as property, plant and equipment and
     deferred exploration expenses.
     Average exchange rates during the period are used for revenues and expenses.
     The Company's exploration activities are primarily in Mexico; accordingly, the resulting assets and liabilities are exposed to
     foreign exchange fluctuations.


Stock options
    The Company has adopted the fair value method of accounting for stock options granted to employees, directors and
     consultants effective January 1, 2004.


Future accounting changes
    International Financial Reporting Standards ("IFRS")
      In 2006, the Canadian Accounting Standards Board ("AcSB") published a new strategic plan that will significantly affect
      financial reporting requirements for Canadian companies. The AcSB strategic plan outlines the convergence of
      Canadian generally accepted accounting principles with IFRS over an expected five year transitional period. In February
      2008, the AcSB announced that 2011 is the changeover date for publicly-listed companies to use IFRS, replacing
      Canada's own generally accepted accounting principles. The date is for interim and annual financial statements relating
      to fiscal years beginning on or after January 1, 2011. The transition date of January 1, 2011 will require the restatement,
      for comparative purposes, of amounts reported by the Company for the year ended December 31, 2010.

       The Company undertook an initial review during 2009 of the significant differences between IFRS and Canadian GAAP,
       to identify areas where the transition could significantly impact the Company’s financial reporting. In many cases the
       effects of the conversion to IFRS on the Company’s financial reporting will be influenced by the Company’s elections
       under the available choices for accounting policies under IFRS and the transition to these policies. As part of this review,
       the Company began the process of selecting appropriate accounting policy choices and determining the transition
       elections it plans to use. At the present time the Company expects the following areas to be significantly impacted by
       the Company’s transition to IFRS:

       Impairment of assets
       The Company will be required under IFRS to perform an annual assessment of impairment for all long-lived assets,
       whether or not there are indicators of impairment. If the assessment is done using a cash flow model, the use of
       discounted cash flows is required in order to calculate the asset’s recoverable amount for comparison with the asset's
       carrying value. IFRS also permits the reversal of impairments for long-lived assets in certain circumstances, which could
       lead to increased volatility in the recognition of impairments as compared with Canadian GAAP.




                                                               -9-
                                            NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                     SEPTEMBER 30, 2010



2.   Significant accounting policies


Future accounting changes - continued
      Foreign currency transactions
      The Company currently translates its integrated foreign subsidiaries using the temporal method, whereby monetary
      assets and liabilities are translated using the current rate method, non-monetary assets are translated at historical
      exchange rates, with resulting foreign exchange differences shown in earnings. Under IFRS, all assets and liabilities of
      foreign subsidiaries will be translated using the current rate method, and all resulting foreign exchange differences will
      be shown as a separate component of equity.

       Asset retirement obligations
       Under Canadian GAAP, the Company has been recognizing its asset retirement obligations based on the Mexican legal
       requirements. Under IFRS, the Company will also have to consider constructive obligations where such obligations are
       probable (defined as ‘more likely than not’, or greater than 50%). The IFRS standard also contains some specific
       measurement differences that could affect the Company’s obligations, such as the discount rate used and the values
       placed on the expected future costs. The Company is currently assessing its choices under the new standard in order to
       determine the final impact of the application of IFRS on the Company’s asset retirement obligations.

       Provisions and Contingencies
       Under IFRS, contingent assets and liabilities must be assessed in legal and constructive terms and are required to be
       recognized if they are probable (defined as ‘more likely than not’ or greater than 50%). The Company continues to
       assess its provisions and contingencies under the terms of this standard.

       Property, plant and equipment
       Under IFRS, the Company will be required to apply componentization concepts to its property, plant and equipment,
       and will be required to perform an annual review of the estimates of useful life, residual value, and depreciation
       methods, in addition to the annual review for impairment. The Company expects to use only the historical cost
       accounting method to value its assets under IFRS.

       Share-based compensation
       Under IFRS, the Company will be required to estimate the percentage of options that are expected to vest, which could
       alter the expense that is to be applied over the vesting period. At the end of each period, the Company will assess the
       actual number vested, compare that to the estimated number vested and adjust the expense as required. In addition,
       there may be some small measurement differences under IFRS that will need to be considered.

       Presentation and disclosure
       The overall presentation and disclosure of the Company’s financial statements will change under IFRS, as a result of
       implementing the IFRS presentation and disclosure requirements. These changes could result in significant differences in
       the presentation of the Company’s statement of cash flows, balance sheet and statement of operations. In addition, it is
       expected that the Company will have additional disclosures in the notes to the consolidated financial statements in
       order to comply with the requirements of IFRS.




                                                             - 10 -
                                             NWM MINING CORPORATION
                                 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                       SEPTEMBER 30, 2010



3.   Financial instruments


Classification and measurement
The Company's financial instruments are classified as follows -
                                                            Amount                         Classification           Measurement
     As at                                September 30, 2010     December 31, 2009
     Cash and cash equivalents              $    2,449,671          $    1,099,954      held-for trading            fair value
     Accounts receivable and advances              671,929                 443,896      loans and receivable        amortized cost
     Accounts payable                            1,875,957                 522,461      other financial liability   amortized cost
     Loans and long term debt                   18,660,062              13,941,789      other financial liability   amortized cost

Risk management
     The Company may be exposed to risks of varying degrees of significance which could affect its ability to achieve its
     strategic objectives. The main objectives of the Company’s risk management processes are to ensure that the risks are
     properly identified and that the capital base is adequate in relation to those risks. The principal risks to which the
     Company is exposed are described below.

     Capital risk
     The Company manages its capital to ensure that there are adequate capital resources for the Company to maintain,
     explore and develop its mineral properties. The capital structure of the Company consists of shareholders' equity and long
     term debt. Since the Company is not yet in commercial production, the capital risk cannot be readily determined.

     Credit risk
     Credit risk is the risk that a client will be unable to pay amounts owed to the Company. The Company has an agreement
     with a reputable refiner providing for prompt payment of gold and silver as one of the alternatives for selling future
     production. Management’s assessment of the Company’s risk is low as it is primarily attributable to cash and equivalents
     on deposit in Canadian banks, amounts due from the refiner and sales taxes recoverable due from the Governments of
     Canada and Mexico.

     Liquidity risk
     Liquidity risk is the risk that the Company may not be able to meet its financial obligations as they fall due. There can be
     no assurance that the Company will be able to obtain adequate financing in the future or that the terms of such financing
     will be favourable. The Company may seek additional financing through debt or equity offerings, but there can be no
     assurance that such financing will be available on terms acceptable to the Company or at all. Any equity offering will
     result in dilution to the ownership interests of the Company’s shareholders and may result in dilution to the value of such
     interests. The Company intends on fulfilling its obligations.

     Market risk
     Market risk incorporates a range of risks. Movements in risk factors, such as market price risk and currency risk, affect the
     fair values of financial assets and liabilities. The Company is exposed to these risks as the ability of the Company to
     develop or market its properties and the future profitability of the Company is related to the market price of certain
     minerals.

     Interest rate risk
     The Company has cash balances, fixed rate interest bearing debt and floating rate interest bearing debt. The Company's
     current policy is to invest excess cash in investment grade short-term deposit certificates issued by its banking institutions.
     Management's assessment of this risk is moderate.



                                                               - 11 -
                                            NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                     SEPTEMBER 30, 2010



3.   Financial instruments


     Foreign currency risk
     The Company's functional currency is the Canadian dollar and major purchases are transacted in Canadian dollars,
     Mexican pesos and US dollars. The Company operations are in Canada and Mexico, and the Company does not engage
     in hedging activities as there is no material difference between the initial transaction amount and the settled transaction
     amount in respect of foreign currency transactions, due to the short time frame between the date of the initial
     encumbrance and the date the outlay is settled.

     Price risk
     The Company is exposed to price risk with respect to commodity prices. Price risk will become relevant as the Company
     achieves full scale commercial production.

     Sensitivity analysis
     The Company has designated its cash and cash equivalents as held-for-trading, which are measured at fair value. Financial
     instruments included in amounts receivable are classified as accounts receivable, which are measured at amortized cost.
     Accounts payable, long term debt and loans are classified as other financial liabilities, which are measured at amortized
     cost. As at September 30, 2010, the carrying and fair value amounts of the Company's financial instruments are the same.
     The Company has a short term investment of $25,000 at September 30, 2010 at fixed interest rate of 2.6%. Therefore, a
     change in this interest rate will not have any significant impact on the Company.
     The Company has US dollar debt in the amount of US$11,500,000. Changes in foreign exchange rates could have a
     significant impact on the Company.
     The Company does not engage in hedging transactions and therefore does not have any financial instruments which are
     subject to hedge accounting.




                                                              - 12 -
                                                  NWM MINING CORPORATION
                                  NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                       SEPTEMBER 30, 2010



4.   Capital management

     In order to support the commercialization of its gold recovery plant and related mining operations and the acquisition,
     exploration and development of mineral properties, the Company manages its capital structure and makes adjustments to
     it, based on the funds available to the Company. The Board of Directors does not establish quantitative return on capital
     criteria for management, but rather relies on the expertise of the Company's management to sustain future development
     of the business.
     The Company is dependent on external financing to fund the commercialization of its gold mines and recovery plant and
     the maintenance and exploration of its mineral properties. In order to finance these activities, the Company will spend its
     existing working capital and, if necessary, will need to raise additional funds until positive cash flows are generated from
     mining operations.
     The Company will continue to assess new mining opportunities and mineral properties. Commercial mining and the
     acquisition of additional properties is conditional on sufficient economic or geological potential and adequate financial
     resources to do so.
     Management reviews its capital management approach on an ongoing basis and believes that this approach, given the
     relative size of the Company, is reasonable. There were no changes in the Company's approach to capital management
     during the period ended September 30, 2010.




5.   Related party transactions
     For the period ending September 30             2010                    2009              2010                   2009

                                                           (Three months)                            (Nine months)
     Management fees incurred                 $       45,000          $       82,500     $      135,000        $       127,500
     to a director for serving as President

     Consulting fees incurred                 $       59,474          $            -     $       59,474        $            -
     to a director for mine consulting

     Legal fees incurred                      $      129,020          $       74,589     $      259,092        $       200,221
     to firm whose partner is a director

     These transactions were conducted in the normal course of business and was accounted for at the exchange amount
     which is the amount agreed between the parties.




6.   Inventories and stockpiled ore
     As at                                                                             September 30, 2010 December 31, 2009


     Stockpiled ore                                                                      $      327,043        $       319,978
     Gold doré                                                                                   36,606                 24,957
     Chemicals and spare parts                                                                   91,075                 71,206
                                                                                         $      454,724        $       416,141
                                                                 - 13 -
                                            NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                     SEPTEMBER 30, 2010



7.   Deferred exploration expenditures


Lluvia de Oro gold project, State of Sonora, Mexico
                                                                    Balance              Expenditures                Balance
                                                               beginning of period     during the period           end of period
                                                                                         (Nine months)
     Acquisition costs, taxes and title maintenance               $    5,207,187        $       34,879         $       5,242,066
     Acquisition costs - 1,000,000 shares issued                         600,000                   -                     600,000
     Acquisition costs of NCF - 2,500,000 shares issued                      -                 207,500                   207,500
     Asset retirement obligation - reclamation allowance                 250,000                   -                     250,000
     Geology, drilling, technical                                      1,052,660               930,853                 1,983,513
     Site administration                                                 547,117                   -                     547,117
                                                                  $    7,656,964        $    1,173,232         $       8,830,196

     The Lluvia de Oro property, forming part of the Lluvia – Jojoba Project, consists of four mineral concessions, 589 hectares
     in total area. It contains the Lluvia de Oro mineral gold deposit and the Lluvia de Oro gold processing facility is located
     within it.

     The concessions were acquired under two agreements. The first was an option agreement with Tara Gold Resources Corp
     and its subsidiary Corporation Amermin SA de CV under which the titles to the concessions were obtained after
     completing all the option payments in December, 2008, subject to a 20% net cash Flow interest retained by Amermin on
     certain production. Under a second agreement, in December 2009 the net cash flow interest was acquired and retired by
     the Company.

     In connection with the financings outlined in note 9, the Company has a commitment to pay a 2% net smelter royalty on
     production.

     The Company has an agreement for the use of surface rights covering 300 hectares of land. The agreement is for 10 years
     ending July 2016 (with a renewal option) and requires annual payments of US$72,000 per year (adjusted for inflation).

     Collateral has been granted on these mining rights.




                                                             - 14 -
                                             NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                      SEPTEMBER 30, 2010



7.   Deferred exploration expenditures


La Jojoba gold project, State of Sonora, Mexico
                                                                    Balance             Expenditures               Balance
                                                               beginning of period    during the period          end of period
                                                                                        (Nine months)
     Acquisition costs, taxes and title maintenance               $   1,270,416        $       60,214        $       1,330,630
     Acquisition costs - 625,000 shares issued                          500,000                    -                   500,000
     Geology, drilling, technical                                     1,945,268                58,485                2,003,753
     Site administration                                                106,933                    -                   106,933
                                                                  $   3,822,617        $      118,699        $       3,941,316

     The La Jojoba property, forming part of the Lluvia – Jojoba Project, consists of four mineral concessions with a total of
     528.9 hectares, is located approximately four kilometres west of the Company's Lluvia de Oro gold processing plant. The
     La Jojoba property contains several gold occurrences which have been intermittently explored in an attempt to discover
     sufficient gold and silver resources to support a stand alone mining operation.

     The property was acquired under two agreements; a settlement agreement to resolve ownership issues respecting the
     property and an agreement to acquire the four concessions. Under the settlement agreement the Company has a
     commitment to pay a 2% net smelter return royalty on production from these four concessions. The Company has an
     option to repurchase this royalty for US$2,000,000.

     The Company owns another six mineral concessions covering 3,245 hectares of ground, making up the balance of the
     lands in the Lluvia – Jojoba Project, adjacent to and between the La Jojoba and Lluvia de Oro deposits which it is
     developing for production as a combined operation.

     In connection with the financings outlined in note 9, the Company has a commitment to pay a 2% net smelter royalty on
     production arising from all ten concessions.

     The Company has an agreement for the use of surface rights covering 100 hectares of land. The agreement requires
     annual payments of US$48,000 per year.

     Collateral has been granted on these mining rights.




                                                             - 15 -
                                             NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                      SEPTEMBER 30, 2010



7.   Deferred exploration expenditures


P II Colorado project, State of Sonora, Mexico
                                                                     Balance               Expenditures            Balance
                                                                beginning of period      during the period       end of period
                                                                                          (Nine months)
     Acquisition costs, taxes and title maintenance                $      116,741        $       15,428      $         132,169
     Geology, drilling, technical                                       1,545,730                    -               1,545,730
     Site administration                                                  366,372                    -                 366,372
     Impairment provision                                              (1,845,580)                   -              (1,845,580)
                                                                   $      183,263        $        15,428     $        198,691

     The P II Colorado property consists of eight concessions containing 1,885 hectares. Exploration outlined several areas of
     base and precious metal mineralization but has not identified any reserves or resources of minerals.

     In connection with the financings outlined in note 9, the Company has a commitment to pay a 2% net smelter royalty on
     production.

     Collateral has been granted on these mining rights.

Sierra Pinta project, State of Sonora, Mexico
                                                                     Balance               Expenditures            Balance
                                                                beginning of period      during the period       end of period
                                                                                          (Nine months)
     Acquisition costs, taxes and title maintenance                $      262,417        $       29,371      $         291,788
     Geology, drilling, technical                                         690,186                    -                 690,186
     Site administration                                                  169,549                    -                 169,549
     Impairment provision                                                (515,144)                   -                (515,144)
                                                                   $      607,008        $        29,371     $        636,379

     The Company has agreed to pay the vendor 20% of the net operating profits (NOP) derived from the initial mining of
     4,000 tonnes (estimated) of underground vein material. Thereafter, the vendor has the right to maintain its 20% NOP
     interest by contributing its share of costs incurred or elect to convert to a 3% net smelter return royalty (NSR). The
     Company may purchase the 3% NSR for US$1,000,000.

     In connection with the financings outlined in note 9, the Company has a commitment to pay a 2% net smelter royalty on
     production.

     Collateral has been granted on these mining rights.




                                                              - 16 -
                                                  NWM MINING CORPORATION
                                  NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                         SEPTEMBER 30, 2010



7.   Deferred exploration expenditures


El Carmen project, State of Sonora, Mexico
                                                                         Balance             Expenditures            Balance
                                                                    beginning of period    during the period       end of period
                                                                                            (Nine months)
     Acquisition costs, taxes and title maintenance                      $       45,399    $        2,982      $          48,381
     Geology, drilling, technical                                               333,220                -                 333,220
     Site administration                                                         12,390                -                  12,390
     Impairment provision                                                      (367,113)               -                (367,113)
                                                                         $       23,896    $         2,982     $          26,878

     The project consists of one mineral concession, which makes up the 752 hectares in the El Carmen property.




8.   Property, plant and equipment
     As at                                             September 30, 2010                           December 31, 2009


                                                    Cost                   Accumulated           Cost              Accumulated
                                                                           Amortization                            Amortization

     ADR gold plant                           $     5,426,840            $          -      $     3,242,264     $            -
     Pre-production expenditures                    1,137,109                       -                  -                    -
     SART copper plant - capital lease              7,579,484                       -            6,828,892                  -
     Mining equipment                               1,466,168                   554,808          1,254,851              451,421
     Office equipment                                 131,002                    56,181             97,017               49,879
     Vehicles                                         169,902                   134,259            169,902              123,113
                                              $    15,910,505            $      745,248    $   11,592,926      $        624,413

     Cost less accumulated amortization                                  $   15,165,257                        $     10,968,513

     Collateral has been granted on these assets. Title to the SART copper plant remains with the lessor until the Company has
     fulfilled its obligation under the capital lease debt obligation.




                                                                  - 17 -
                                                NWM MINING CORPORATION
                                  NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                        SEPTEMBER 30, 2010



9.   Promissory notes
     As at                                           September 30, 2010                          December 31, 2009
                                                  US$                   Canadian $            US$                 Canadian $

     Promissory note - June 12, 2009        $     1,500,000         $     1,544,100     $    1,500,000        $     1,574,100
     Promissory note - August 28, 2009              500,000                 514,700            500,000                524,700
     Promissory note - September 24, 2010         9,500,000               9,779,300                -                      -
     Convertible option feature                    (544,000)               (560,000)               -                      -
                                                 10,956,000             11,278,100           2,000,000              2,098,800
     less current portion                                -                       -          (2,000,000)            (2,098,800)
                                            $    10,956,000         $   11,278,100      $           -         $                -


     The Company has arranged a loan facility as follows -
     June 12, 2009 promissory note payable
      bearing interest at 15% per annum, compounded monthly and payable monthly

      the issuance of 7,000,000 common shares, 2,000,000 during fiscal 2008 and 5,000,000 during fiscal 2009

      due December 13, 2011


     August 28, 2009 promissory note payable
      bearing interest at 15% per annum, compounded monthly and payable monthly

      due December 10, 2011


     September 24, 2010 promissory note payable
      the total amount available under this promissory note is US$16,500,000

      bearing interest at 15% per annum, compounded monthly and payable monthly

      a stand by fee of 0.25% per month on the undrawn portion

      Up to US$2,000,000 drawn down on September 24, 2010 is convertible for a period of two years into common shares

       of the Company, at the lender's option, at a rate of one share Cdn$0.20 of indebtedness. The fair value of this
       convertibility option has been estimated using the Black-Scholes option pricing model with the following assumptions:
       no dividends to be paid, risk free rate of 1.6%, volatility of 176%
      drawdown fees totalling 6,500,000 Company shares are payable when funds are advanced by the lender (except for the

       convertible amount of US$2,000,000). To date 3,055,560 have been paid and the balance is payable on drawdown at
       a rate of 0.492064 per US dollar advanced.
        due September 24, 2010

     Other terms
      A charge on the real property, mining rights and other assets of Minera Columbia de Mexico S.A. de C.V.

        a 2% net smelter return royalty on production from the properties of Minera Columbia de Mexico S.A. de C.V.




                                                               - 18 -
                                             NWM MINING CORPORATION
                                 NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                       SEPTEMBER 30, 2010



10. Loan facility and capital lease obligation
    As at                                                                             September 30, 2010 December 31, 2009


    Loan                                                                                $         -         $    3,913,191
    Capital lease obligation                                                                6,302,661            6,302,661
    Accrued interest                                                                        1,079,301              599,964
                                                                                            7,381,962           10,815,816
    less current portion                                                                    (1,116,120)          (1,117,500)
                                                                                        $   6,265,842       $    9,698,316

    During the third quarter of 2010, the Company repaid the loan and related interest.
    The Company acquired the SART plant under a capital lease bearing interest at an estimated effective rate of 15.6%
    (which could vary depending on foreign exchange rates) assuming minimum payments are made.
      The lease payments are as follows -
      - US$150,000 per month principal and interest from October, 2010 through April, 2011
      - thereafter at the greater of US$150,000 per month principal and interest or US$150,000 times the actual gold price
        for the previous month divided by US$850 per ounce or if the amounts in note 9 are repaid, 30% of net after tax cash
        project flow
      - if the amounts set out in note 9 have not been repaid, then the monthly payment remains at US$150,000 principal
        and interest
      Title to the SART copper plant remains with the lessor until the Company has fulfilled its obligation under the capital
      lease debt obligation.
      Minimum loan and capital lease payments are as follows (based on fiscal year) -
                                                                       Canadian $
                       2010                        -               $       517,500
                       2011                        -                     2,070,000
                       2012                        -                     2,070,000
                       2013                        -                     2,070,000
                       2014                        -                     2,070,000
                       2015                        -                       824,210
                                                                         9,621,710
                       less amount representing interest                (3,319,049)
                                                                   $     6,302,661




                                                              - 19 -
                                             NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                      SEPTEMBER 30, 2010



11. Long term debt
    As at                                         September 30, 2010                            December 31, 2009
                                                US$                   Canadian $             US$                 Canadian $

    Convertible debenture                $             -          $            -      $     1,100,000        $     1,154,340
    less option feature value                          -                       -             (121,181)              (127,167)
                                                       -                       -              978,819              1,027,173
    less current portion                               -                       -             (978,819)            (1,027,173)
                                         $             -          $            -      $            -         $                -

    During the second quarter of 2010, the Company repaid the convertible debenture and related interest after the holder
    declined to convert.




12. Asset retirement obligation - reclamation allowance
    As at                                                                           September 30, 2010 December 31, 2009

    Asset retirement obligations were estimated based on the estimated timing of the costs to be incurred in future periods.
    The Company had the following changes to its asset retirement obligations -

    Balance at beginning of period                                                    $       250,000        $       250,000
    Changes during the period                                                                     -                      -
    Balance at end of period                                                          $       250,000        $       250,000

    The Company's main reclamation liability is with the Lluvia de Oro gold project, and the heap leach operation which is not
    yet in commercial production there. A reclamation plan has been developed and is being finalized with the environmental
    regulators that will require annual updates, recognition of actual versus planned mine site activities and accounting for
    actual disturbances to the natural environment. Furthermore this plan contemplates establishment of a production based
    fund to be applied against costs of final reclamation work and concurrent reclamation during commercial production in
    keeping with guidelines and laws the Mexican authorities are developing for heap leach operations.




                                                             - 20 -
                                         NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                SEPTEMBER 30, 2010



13. Share capital
    As at                                                                     September 30, 2010 December 31, 2009


Authorized
    Unlimited number of common shares
Issued
     229,394,087 common shares (174,519,527 as at December 31, 2009)            $   30,796,949     $   28,508,957
     Contributed surplus                                                             4,002,993          1,641,586
                                                                                $   34,799,942     $   30,150,543

Transactions during the period
    For the nine month period ended           September 30, 2010                       September 30, 2009
                                           Number             Amount                Number             Amount
    Balance, beginning of period          174,519,527        $   30,150,543          96,970,527    $   25,407,238
    Private placements                     35,500,000             2,287,992          54,036,000         2,969,953
    Shares issued - financing fees          6,305,560               552,223           5,000,000           250,000
    Shares issued - Lluvia NCF              2,500,000               207,500                 -                 -
    Stock options - financial advisory            -                 113,154                 -                 -
    Stock options                                 -                  83,010                 -                 -
    Warrant conversions                    10,569,000               845,520                 -                 -
    Convertible debt option feature               -                 560,000                 -             327,000
    Balance, end of period                229,394,087        $   34,799,942         156,006,527    $   28,954,191




                                                        - 21 -
                                            NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                        SEPTEMBER 30, 2010



13. Share capital


Stock option plan
    The Company's stock option plan summary is as follows -
     up to 10% of the outstanding shares at the time of the grant may be issued

     the maximum that may be issued to a related person is 5% of the shares outstanding at the time of the grant

     the maximum that may be issued to a consultant is 2% of the shares outstanding at the time of the grant

     the maximum discount is 25% if the closing price is up to $0.50 per share, 20% if the closing price is $0.51 to $2.00 per

        share and 15% if above $2.00 per share.
       the plan requires annual shareholder approval

Stock options outstanding
                                              Balance                                                                Balance
            Expiry and price             beginning of period      Granted (Exercised)   Forfeited / Expired        end of period
    March 2010                   $0.47              500,000                    -                (500,000)                    -
    May 2010                     $0.30            1,000,000                    -              (1,000,000)                    -
    August 2010                  $0.17              500,000                    -                (500,000)                    -
    February 2011                $0.20            1,450,000                    -                 (75,000)              1,375,000
    March 2011                   $0.56               50,000                    -                     -                    50,000
    October 2012                 $0.10            4,040,000                    -                (640,000)              3,400,000
    March 2012                   $0.10 a                -                1,895,000                   -                 1,895,000
    March 2013                   $0.10 a                -                  500,000                   -                   500,000
    June 2013                    $0.10                  -                  500,000                   -                   500,000
    August 2013                  $0.10                  -                  500,000                   -                   500,000
                                                  7,540,000              3,395,000            (2,715,000)              8,220,000

    a   Options vest 25% every three months and will be fully vested March 2011

    A summary of the status of the Company's stock options is as follows -

    For the nine month period ended                  September 30, 2010                           September 30, 2009
                                             Number of             Weighted average        Number of          Weighted average
                                              options                Exercise price         options              Exercise price
    Balance, beginning of period               7,540,000           $           0.18          4,500,000         $           0.27
    Granted                                    3,395,000           $           0.10                 -          $             -
    Exercised                                         -            $             -                  -          $             -
    Expired                                   (2,000,000)          $           0.31           (250,000)        $           0.22
    Forfeited                                   (715,000)          $           0.11                 -          $             -
    Balance, end of period                        8,220,000         $         0.12            4,250,000        $            0.27




                                                               - 22 -
                                              NWM MINING CORPORATION
                               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                      SEPTEMBER 30, 2010



13. Share capital


Stock based compensation
    The fair value of stock options granted has been estimated using the Black-Scholes option pricing model with the
    following weighted average assumptions - no dividends are to be paid, risk free rate of 1.6% (2009 - 1.8%), volatility of
    176% (2009 - 174%).

    Fair value of options granted                    September 30, 2010                        September 30, 2009
                                               Number of                  Fair value      Number of              Fair value
                                                options                                    options
                                                  3,395,000           $       299,790                -      $             -


Warrants outstanding
                                                Balance                                                           Balance
           Expiry and price                beginning of period       Issued (Exercised)    Expired              end of period
    June 2010                   $0.25 a          1,007,050                        -        (1,007,050)                   -
    February 2011               $0.10 a          6,024,000                        -               -                6,024,000
    September 2010/2011                b        51,493,500                (10,569,000)            -               40,924,500
    October 2010/2011                  c        20,021,000                        -               -               20,021,000
                                                78,545,550                (10,569,000)     (1,007,050)            66,969,500

    a Each warrant allows the holder to purchase one common share.
    b Each warrant is exercisable for one common share at a price of $0.08 expiring September 30, 2010 and at a price of
      $0.10 expiring September 30, 2011. After April 1, 2010, the warrants are subject to an accelerated expiration clause,
      being expiry in 30 days after the 20 day volume weighted average price of the common shares on the Company on the
      TSX-V is at or above $0.12, on notice given by the Company
    c Each warrant is exercisable for one common share at a price of $0.08 expiring October 28, 2010 and at a price of $0.10
      expiring October 28, 2011. After April 29, 2010, the warrants are subject to an accelerated expiration clause, being
      expiry in 30 days after the 20 day volume weighted average price of the common shares on the Company on the TSX-V
      is at or above $0.12, on notice given by the Company.




                                                                 - 23 -
                                           NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                     SEPTEMBER 30, 2010



14. Income taxes
    As at                                                                            September 30, 2010 December 31, 2009


Future income tax asset
    Non-capital losses                                                                 $    5,173,000       $      3,764,000
    Valuation allowance                                                                    (5,173,000)            (3,764,000)
                                                                                       $            -       $             -

    The Company has reduced the value of the potential future income tax asset to $Nil through the application of a valuation
    allowance as the Company does not have any current source of income to which the tax losses can be applied.
    These losses expire as follows -                                 Canada                Mexico

                                2013             -               $          -          $      126,000
                                2014             -                          -                  21,000
                                2015             -                       48,000                18,000
                                2016             -                          -                 225,000
                                2017             -                          -                 619,000
                                2018             -                          -               2,843,000
                                2019             -                          -               7,734,000
                                2020             -                          -                 663,000
                                2026             -                      866,000                   -
                                2027             -                      918,000                   -
                                2028             -                    1,472,000                   -
                                2030             -                    2,097,000                   -
                                                                 $    5,401,000        $   12,249,000




15. Segment information

                                                                                     September 30, 2010
                                                                     Canada                Mexico                 Total
    Current assets                                               $   2,474,500         $    1,101,824       $    3,576,324
    Deferred exploration expenditures                                      -               13,633,460           13,633,460
    Property, plant and equipment                                        8,857             15,156,400           15,165,257
                                                                 $   2,483,357         $   29,891,684       $   32,375,041
                                                                              7.7%               92.3%                 100.0%

                                                                                     December 31, 2009
                                                                     Canada                Mexico                 Total
    Current assets                                               $     984,057         $      975,934       $    1,959,991
    Deferred exploration expenditures                                      -               12,293,748           12,293,748
    Property, plant and equipment                                       10,511             10,958,002           10,968,513
                                                                 $     994,568         $   24,227,684       $   25,222,252
                                                                              3.9%               96.1%                 100.0%

                                                            - 24 -
                                           NWM MINING CORPORATION
                               NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                   SEPTEMBER 30, 2010



16. Agreements and commitments


Lluvia de Oro gold project, State of Sonora, Mexico
     In connection with the financings outlined in note 9, the Company has a commitment to pay a 2% net smelter royalty on
    production.

    The Company has an agreement for the use of surface rights covering 300 hectares of land. The agreement is for 10 years
    ending July 2016 (with a renewal option) and requires annual payments of US$72,000 per year (adjusted for inflation).

    The purchase price for the four Lluvia de Oro mining concessions is subject to a future performance based adjustment
    upon the Company producing and selling 3,750 ounces of gold over a 3 month period, such that the Company will be
    required to issue a further 2,500,000 common shares.


La Jojoba gold project, State of Sonora, Mexico
     The Company has a commitment to pay a 2% net smelter royalty on production from four specific concessions, arising
    out of the original acquisition terms. The Company has an option to repurchase this NSR for US$2,000,000.

    The Company has a commitment to pay an additional 2% net smelter royalty on production arising from all ten
    concessions comprising the La Lojoba gold project.

    The Company has an agreement for the use of surface rights covering 100 hectares of land. The agreement requires
    annual payments of US$48,000 per year.


P II Colorado project, State of Sonora, Mexico
     In connection with the financings outlined in note 9, the Company has a commitment to pay a 2% net smelter royalty on
    production.


Sierra Pinta project, State of Sonora, Mexico
     The Company has agreed to pay the vendor 20% of the net operating profits (NOP) derived from the initial mining of
     4,000 tonnes (estimated) of underground vein material. Thereafter, the vendor has the right to maintain its 20% NOP
     interest by contributing its share of costs incurred or elect to convert to a 3% net smelter return royalty (NSR). The
     Company may purchase the 3% NSR for US$1,000,000.

    In connection with the financings outlined in note 9, the Company has a commitment to pay a 2% net smelter royalty on
    production.


Leases
    The Company has a lease agreement for its head office in Toronto ending April, 2011 providing for an annual rent of
    $59,700 (including taxes and common area costs).




                                                            - 25 -
                                            NWM MINING CORPORATION
                                NOTES TO CONSOLIDATED INTERIM FINANCIAL STATEMENTS
                                                     SEPTEMBER 30, 2010



17. Contingency


Lluvia de Oro gold project, State of Sonora, Mexico
     Several labour claims lodged against prior owners and operators of the Lluvia de Oro gold project have been disclosed to
     the Company as totaling $512,000 and are still unsettled. Settlement of these claims is the responsibility of prior project
     owners.




18. Subsequent events


Private placement
     The Company closed a private placement during October, 2010 for 65,402,500 common shares at a price of $0.08 per
     common share for aggregate proceeds of $5,232,200. Commissions of $512,820 were paid and 6,410,250 common
     shares were issued to placement agents in connection with this financing. The securities issued are subject to a four
     month and one day hold period ending February 15, 2011.


Promissory note - September 24, 2010
    The Company repaid US$3,500,000 subsequent to the period end. This results in a reduction of the promissory note from
    US$16,500,000 to US$13,000,000. A further US$4,000,000 was drawn subsequent to the period end.




                                                             - 26 -

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:23
posted:1/24/2011
language:English
pages:26