20-F/A

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 20-F

Amendment No. 2

[  ] REGISTRATIONSTATEMENTPURSUANTTOSECTION12(b)OR(g)OFTHESECURITIESEXCHANGEACTOF1934

OR
[X]	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Fiscal Year Ended August 31, 2011

OR
[  ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ________

OR
[  ]	SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of event requiring this shell company report

Commission file number 000-31204

Golden Goliath Resources Ltd.

(Exact name of Registrant as specified in its charter)

British Columbia, Canada

(Jurisdiction of incorporation or organization)

675 West Hastings Street, #711, Vancouver, British Columbia  Canada  V6B 1N2

(Address of principal executive offices)

J. Paul Sorbara:: 604-682-2950; jps@goldengoliath.com; 675 West Hastings St. #711, Vancouver, BC  V6B 1N2

(Name, Telephone, E-mail and/or Facsimile and Address of Company Contact Person)

Securities to be registered pursuant to Section 12(b) of the Act:  None

Securities to be registered pursuant to Section 12(g) of the Act:

Common Shares, without par value

(Title of Class)

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act: None

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report. 92,216,445 Common Shares

Indicate by check mark if the registrant is a well-known, seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [  ] No [X]

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes [  ] No [X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 12 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past ninety days Yes [X] No [  ]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer:
(Check one)   Large accelerated filer [ ]      Accelerated filer [ ]	Non-accelerated filer [X]

Indicatebycheckmarkwhichbasisofaccountingregistranthasusedtopreparefinancialstatementsincludedinthisfiling:
U.S.GAAP [ ]    InternationalFinancialReportingStandardsasissuedbyInternationalAccountingStandardsBoard  [ ]	Other [X]

If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow: Item 17 [X] Item 18 [  ]

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [  ] No [X]

Page 1 of 91

Index to Exhibits on Page 66

GOLDEN GOLIATH RESOURCES LTD.

FORM 20-F ANNUAL REPORT

AUGUST 31, 2011

TABLE OF CONTENTS

Part I		Page
	Introduction	3
Item 1	Identity of Directors, Senior Management and Advisors	4
Item 2	Offer Statistics and Expected Timetable	4
Item 3	Key Information	4
Item 4	Information on the Company	11
Item 5	Operating and Financial Review and Prospects	39
Item 6	Directors, Senior Management and Employees	45
Item 7	Major Shareholders and Related Party Transactions	56
Item 8	Financial Information	58
Item 9	The Offer and Listing	58
Item 10	Additional Information	61
Item 11	Quantitative and Qualitative Disclosures About Market Risk	63
Item 12	Description of Securities Other Than Equity Securities	63

Part II
Item 13	Defaults, Dividend Arrearages and Delinquencies	63
Item 14	Material Modifications to the Rights of Security Holders and Use of Proceeds	63
Item 15	Controls and Procedures	63
Item 16	Reserved	64
Item 16A	Audit Committee Financial Expert	64
Item 16B	Code of Ethics	65
Item 16C	Principal Accountant Fees and Services	65
Item 16D	Exemptions from the Listing Standards for Audit Committee	65
Item 16E	Purchases of Equity Securities by the Company and Affiliated Purchasers	65
Item 16F	Change in Registrant’s Certifying Accountant	65
Item 16G	Corporate Governance	65

Part III
Item 17	Financial Statements	66
Item 18	Financial Statements	66
Item 19	Exhibits	66

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INTRODUCTION

Golden Goliath Resources Ltd. is organized under the British Columbia Business Corporations Act.  In this Annual Report, the “Company”, “Golden Goliath”, “we”, “our” and “us” refer to Golden Goliath Resources Ltd. and its subsidiaries (unless the context otherwise requires).  We refer you to the actual corporate documents for more complete information than may be contained in this Annual Report.  Our principal corporate offices are located at 675 West Hastings Street, #711, Vancouver, British Columbia, Canada  V6B 1N2.  Our telephone number is 604-682-2950.

We file reports and other information with the Securities and Exchange Commission located at 100 F Street NE, Washington, D.C. 20549; you may obtain copies of our filings with the SEC by accessing their website located at www.sec.gov.  Further, we file reports under Canadian regulatory requirements on SEDAR; you may access our reports filed on SEDAR by accessing their website at www.sedar.com.  Finally, corporate information may be found at the Company’s website: goldengoliath.com.

BUSINESS OF GOLDEN GOLIATH RESOURCES LTD.

Golden Goliath Resources Ltd. is principally a mineral company engaged in the acquisition and exploration of mineral properties.

There are no known proven reserves of minerals on Golden Goliath’s properties.  The Company does not have any commercially producing mines or sites, nor is the Company in the process of developing any commercial mines or sites.  The Company has not reported any revenue from operations since incorporation.  As such, the Company is defined as an “exploration-stage company”.  The Company is well capitalized with approximately $1,800,000 in working capital at 01/31/2012 to fund the current exploration program, estimated at $1.0 million for Fiscal 2012.

FINANCIAL AND OTHER INFORMATION

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (“CDN$” or “$”).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).

FORWARD-LOOKING STATEMENTS

This Annual Report on Form 20-F contains forward-looking statements.

Forward-looking statements and information can generally be identified by the use of forward-looking terminology or words, such as, “predict”, “designed”, “potential”, “promote”, “become”, “developing”, “vision”, “plans”, “expects”, “anticipates”, “believes”, “intends”, “conducting” “estimates”, “to be”, “being”, “projects”, “hopefully”, “possibly”, “develop”, “contemplated”, “hypothesizes”, “pursue”, “likely”, “future”, “2008”, “2009”, “2010”, “opportunities”, “going forward”, “next”, and similar expressions or variations thereon, or statements that events, conditions or results “can”, “might” “will”, “shall”, “may”, “must” “would”, “could”, or “should” occur or be achieved and similar expressions in connection with any discussion, expectation, or projection of future operating or financial performance, events or trends.  Forward-looking statements are based on management's current expectations and assumptions, which are inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.  Actual outcomes and results may differ materially from these expectations/assumptions due to changes in global political, economic, business, competitive, market, regulatory and other factors.  We undertake no obligation to publicly update or review any forward-looking information, whether as a result of new information, future developments or otherwise.  These factors include, but are not limited to, the fact that the Company is early in its development and will need additional financing to develop its products, which factors are set forth in more detail in the sections entitled “Risk Factors” in Item #3D, “Business Overview” in ITEM #4B, and “Operating and Financial Review and Prospects” at ITEM #5.

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PART I

ITEM 1.  IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

         --- Not Applicable ---

ITEM 2.  OFFER STATISTICS AND EXPECTED TIMETABLE.

         --- No Disclosure Necessary ---

ITEM 3.  KEY INFORMATION.

3.A.1.  Selected Financial Data

3.A.2.  Selected Financial Data

The selected financial data of the Company for Fiscal 2011/2010/2009 ended August 31st was derived from the consolidated financial statements of the Company that were audited by Morgan & Company, independent Chartered Accountants, as indicated in their audit report which is included elsewhere in this Annual Report.

The Company’s consolidated financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the consolidated financial statements.

The consolidated financial statements are the responsibility of the Company’s management.  The auditor’s responsibility is to express an opinion on the consolidated financial statements based on their audit.

The auditor’s conducted their audits in accordance with United States and Canadian generally accepted auditing standards, and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that the auditor plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation.  The auditor’s report states that they believe that their audits provided a reasonable basis for their opinion.

The selected financial data should be read in conjunction with the consolidated financial statements and other financial information included elsewhere in the Annual Report.

The Company has not declared any dividends since incorporation and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain all available funds for use in its operations and the expansion of its business.

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Table No. 1

Selected Financial Data

	Year	Year	Year	Year	Year
	Ended	Ended	Ended	Ended	Ended
	8/31/2011	8/31/2010	8/31/2009	8/31/2008	8/31/2007
Canadian GAAP
Sales Revenue	$0	$0	$0	$0	$0
Operating Income (Loss)	($1,130,554)	($1,338,686)	($760,523)	($821,077)	($1,035,556)
Net Income (Loss)	($1,021,160)	($1,412,984)	($2,196,183)	($821,077)	($1,035,556)
Basic/Diluted (Loss) Per Share	($0.01)	($0.02)	($0.04)	($0.01)	($0.02)
Dividends Per Share	$0	$0	$0	$0	$0
Weighted Avg. Shares O/S	85,749,549	72,302,874	60,934,037	60,875,845	49,092,397
Period-End Shares O/S	92,216,445	80,655,503	60,934,037	60,934,037	60,754,037
Working Capital	$2,713,392	$1,808,507	$712,378	$2,427,739	$7,058,037
Mineral Property Interests	$8,981,467	$8,089,770	$7,342,303	$7,784,381	$3,763,023
Long-Term Obligations	$58,000	$37,000	$26,000	$46,000	$37,000
Shareholder’s Equity	$11,848,681	$10,029,855	$8,156,342	$10,295,018	$10,948,315
Total Assets	$12,022,608	$10,232,227	$8,222,221	$10,795,721	$11,249,718
US GAAP
Net Income (Loss)(1)	($1,903,482)	($2,160,451)	($1,754,104)
Net Income (Loss) Per Share	($0.02)	($0.03)	($0.03)
Mineral Property Interests	$0	$0	$0
Shareholders’ Equity	$3,201,987	$2,274,858	$1,148,812
Total Assets	$3,375,914	$2,477,230	$1,214,691
(1) Cumulative Net Loss to 8/31/2011 under USGAAP was ($23,627,463). (2) Certain of the comparative figures have been reclassified to conform to the current year’s presentation.

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3.A.3.  Exchange Rates

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).  The Government of Canada permits a floating exchange rate to determine the value of the Canadian Dollar against the U.S. Dollar (US$).

The following table sets forth the rate of exchange for the Canadian Dollar at the end of the five most recent fiscal periods ended August 31st, the average rates for the period, and the range of high and low rates for the period.  The data for each month during the previous six months are also provided.

For purposes of this table, the rate of exchange means the noon buying rate in New York City for cable transfers in foreign currencies as certified for customs purposes by the Federal Reserve Bank of New York.  The table sets forth the number of Canadian Dollars required under that formula to buy one U.S. Dollar.  The average rate means the average of the exchange rates on the last day of each month during the period.

Table No. 2 U.S. Dollar/Canadian Dollar
	Average	High	Low	Close
July 2011		0.97	0.94	0.95
August 2011		0.99	0.96	0.98
September 2011		1.04	0.98	1.04
October 2011		1.06	0.99	0.99
November 2011		1.05	1.01	1.02
December 2011		1.04	1.01	1.02
January 2012		1.02	1.00	1.00
Fiscal Year Ended 8/31/2011	0.99	1.06	0.94	0.98
Fiscal Year Ended 8/31/2010	1.06	1.16	1.00	1.06
Fiscal Year Ended 8/31/2009	1.18	1.30	1.03	1.08
Fiscal Year Ended 8/31/2008	1.00	1.07	0.92	1.06
Fiscal Year Ended 8/31/2007	1.17	1.19	1.04	1.06

3.B.  Capitalization and Indebtedness

      --- Not Applicable ---

3.C.  Reasons For The Offer And Use Of Proceeds

      --- No Disclosure Necessary ---

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3.D.  RISK FACTORS

In addition to the other information presented in this Annual Report, the following should be considered carefully in evaluating the Company and its business.  This Annual Report contains forward-looking statements that involve risks and uncertainties.  The Company's actual results may differ materially from the results discussed in the forward-looking statements. Factors that might cause such a difference include those discussed below and elsewhere in this Annual Report.

Risks Pertaining to Golden Goliath

Cumulative Unsuccessful Exploration Efforts By Golden Goliath Personnel Could Result In the Company Having to Cease Operations:

The expenditures to be made by Golden Goliath in the exploration of its properties as described herein may not result in discoveries of mineralized material in commercial quantities.  Most exploration projects do not result in the discovery of commercially mineable ore deposits and this occurrence could ultimately result in Golden Goliath having to cease operations. Management feels that if exploration efforts were unsuccessful for a period of ten years, the Company would cease operations. If that were the case, investors would lose their entire investment in the Company.

Golden Goliath Has No Reserves on the Properties in Which It Has an Interest and If Reserves Are Not Defined the Company Could Have to Cease Operations:

The properties in which Golden Goliath has an interest or the concessions in which Golden Goliath has the right to earn an interest are in the exploratory stage only and are without a known body of ore.  If Golden Goliath does not ultimately find a body of ore, it would have to cease operations. As stated above, management believes that if reserves were not defined on any of the properties on which Golden Goliath has an interest after a period of ten years, the Company would cease operations.  If that were the case, investors would lose their entire investment in the Company.

Golden Goliath Has Minimal Positive Cash Flow and No Recent History of Significant Earnings and Is Dependent Upon Public and Private Distributions of Equity to Obtain Capital in Order to Sustain Operations. Public distributions of capital result in dilution to existing shareholders:

None of Golden Goliath’s properties have advanced to the commercial production stage and Golden Goliath has no history of earnings or positive cash flow from operations.  Golden Goliath does not know if it will ever generate material revenue from mining operations or if it will ever achieve self-sustaining commercial mining operations. Historically, the only source of funds available to Golden Goliath has been through the sale of its common shares.  Any future additional equity financing would cause dilution to current stockholders.

As of 01/31/2012, Golden Goliath currently had nil share purchase options outstanding and 8,715,000 share purchase warrants outstanding.  If all of the share purchase options and warrants were exercised, the number of common shares issued and outstanding would increase from 92,216,445 (as of 01/31/2012) to 100,931,445.  This represents a potential increase of 9.5% in the number of shares issued and outstanding and would result in dilution to current shareholders.

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Dilution Through Employee/Director/Consultant Options Could Adversely Affect Golden Goliath’s Stockholders

Because the success of Golden Goliath is highly dependent upon its respective employees, the Company has granted to some or all of its key employees, Directors and consultants options to purchase common shares as non-cash incentives.  To the extent that significant numbers of such options may be granted and exercised, the interests of the other stockholders of the Company may be diluted.  At 01/31/2012, there were 8,715,000 share purchase options outstanding, which, if exercised, would result in an additional 8,715,000 common shares being issued and outstanding.  (For a breakdown of dilution, refer to the risk factor entitled: “Golden Goliath Has Minimal Positive Cash Flow and No Recent History of Significant Earnings and Is Dependent Upon Public and Private Distributions of Equity to Obtain Capital in Order to Sustain Operations.  Public distributions of capital will result in dilution to existing shareholders”).

The Amount of Capital Necessary to Meet All Environmental Regulations Associated with the Exploration Programs of Golden Goliath Could Be In An Amount Great Enough to Force Golden Goliath to Cease Operations:

The current and anticipated future operations of Golden Goliath, including further exploration activities require permits from various Federal and State governmental authorities in Mexico.  Such operations are subject to various laws governing land use, the protection of the environment, production, exports, taxes, labor standards, occupational health, waste disposal, toxic substances, mine safety and other matters.  Unfavorable amendments to current laws, regulations and permits governing operations and activities of resource exploration companies, or more stringent implementation thereof, could have a materially adverse impact on the Company and cause increases in capital expenditures which could result in a cessation of operations by the Company.

Failure to comply with applicable laws, regulations and permitting requirements may result in enforcement actions there under, including orders issued by regulatory or judicial authorities causing operations to cease or be curtailed, and may include corrective measures requiring capital expenditures, installation of additional equipment or remedial actions. Parties engaged in resource exploration may be required to compensate those suffering loss or damage by reason of the mining activities and may have civil or criminal fines or penalties imposed for violation of applicable laws or regulations.

Large increases in capital expenditures resulting from any of the above factors could force Golden Goliath to cease operations.  If that were the case, investors would lose their entire investment in the Company.

The Risks Associated with Penny Stock Classification Could Affect the Marketability of the Common Stock of Golden Goliath and Shareholders Could Find It Difficult to Sell Their Stock:

Golden Goliath’s stock is subject to “penny stock” rules as defined in 1934 Securities and Exchange Act rule 3a51-1.  The Commission has adopted rules that regulate broker-dealer practices in connection with transactions in penny stocks.  Golden Goliath’s common shares are subject to these penny stock rules. Transaction costs associated with purchases and sales of penny stocks are likely to be higher than those for other securities.  Penny stocks generally are equity securities with a price of less than US$5.00 (other than securities registered on certain national securities exchanges or quoted on the NASDAQ system, provided that current price and volume information with respect to transactions in such securities is provided by the exchange or system).

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The penny stock rules require a broker-dealer, prior to a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the nature and level of risks in the penny stock market.  The broker-dealer also must provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and its salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account.  The bid and offer quotations, and the broker-dealer and salesperson compensation information, must be given to the customer orally or in writing prior to effecting the transaction and must be given to the customer in writing before or with the customer’s confirmation.

In addition, the penny stock rules require that prior to a transaction in a penny stock not otherwise exempt from such rules, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction.  These disclosure requirements may have the effect of reducing the level of trading activity in the secondary market for the Company’s common shares in the United States and shareholders may find it more difficult to sell their shares.

Golden Goliath is Dependent on Key Personnel and the Absence of Any of These Individuals Could Result in the Company Having to Cease Operations:

While engaged in the business of exploring mineral properties, the nature of Golden Goliath’s business, its ability to continue its exploration of potential exploration projects, and to develop a competitive edge in the marketplace, depends, in large part, on its ability to attract and maintain qualified key management personnel.  Competition for such personnel is intense and the Company may not be able to attract and retain such personnel.  Golden Goliath’s growth will depend, on the efforts of its Senior Management, particularly its: President/Director, J. Paul Sorbara; its CFO/Corporate Secretary, Stephen Pearce; Daniel Fermandez, a Director and Manager of a wholly-owned subsidiary, Minera Delta S.A. de C.V.

U.S. Investors May Not Be Able to Enforce Their Civil Liabilities Against Us or Our Directors, Controlling Persons and Officers:

It may be difficult to bring and enforce suits against Golden Goliath.  Golden Goliath is a corporation incorporated in the province of British Columbia under the British Columbia Business Corporations Act.  A substantial portion of Golden Goliath’s assets are located outside of the United States, predominately in Mexico and Canada.  As a result, it may be difficult for U.S. holders of our common shares to effect service of process on these persons within the United States or to realize in the United States upon judgments rendered against them.  In addition, a shareholder should not assume that the courts of Canada, (i) would enforce judgments of U.S. courts obtained in actions against us or such persons predicated upon the civil liability provisions of the U.S. federal securities laws or other laws of the United States, or (ii) would enforce, in original actions, liabilities against us or such persons predicated upon the U.S. federal securities laws or other laws of the United States.

However, U.S. laws would generally be enforced by a Canadian court provided that those laws are not contrary to Canadian public policy, are not foreign penal laws or laws that deal with taxation or the taking of property by a foreign government and provided that they are in compliance with applicable Canadian legislation regarding the limitation of actions.  Also, a Canadian court would generally recognize a judgment obtained in a U.S. Court except, for example:

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a)

where the U.S. court where the judgment was rendered had no jurisdiction according to applicable Canadian law;

b)

the judgment was subject to ordinary remedy (appeal, judicial review and any other judicial proceeding which renders the judgment not final, conclusive or enforceable under the laws of the applicable state) or not final, conclusive or enforceable under the laws of the applicable state;

c)

the judgment was obtained by fraud or in any manner contrary to natural justice or rendered in contravention of fundamental principles of procedure;

d)

a dispute between the same parties, based on the same subject matter has given rise to a judgment rendered in a Canadian court or has been decided in a third country and the judgment meets the necessary conditions for recognition in a Canadian court;

e)

the outcome of the judgment of the U.S. court was inconsistent with Canadian public policy;

f)

the judgment enforces obligations arising from foreign penal laws or laws that deal with taxation or the taking of property by a foreign government; or

g)

there has not been compliance with applicable Canadian law dealing with the limitation of actions.

As a “foreign private issuer”, Golden Goliath is exempt from the Section 14 proxy rules and Section 16 of the 1934 Securities Act. This could result in shareholders having less complete and timely Data

The submission of proxy and annual meeting of shareholder information (prepared to Canadian standards) on Form 6-K may result in shareholders having less complete and timely data.  The exemption from Section 16 rules regarding sales of common shares by insiders may result in shareholders having less data.

Risks Pertaining to the Industry

Mineral Prices May Not Support Corporate Profit for Golden Goliath:

The resource exploration industry is intensely competitive and even if commercial quantities of mineral resources are developed (which is not guaranteed), a profitable market may not exist for the sale.  If a profitable market does not exist, Golden Goliath could have to cease operations.

Operating Hazards and Risks Associated with the Exploration-stage Mining Industry Could Result in Golden Goliath Having to Cease Operations:

Resource exploration activities generally involve a high degree of risk.  Hazards such as unusual or unexpected formations and other conditions are involved.  Operations in which Golden Goliath has a direct or indirect interest will be subject to all the hazards and risks normally incidental to exploration for precious and base metals, any of which could result in work stoppages, damage to or destruction of exploration facilities, damage to life and property, environmental damage and legal liability for any or all damage.  Golden Goliath may become subject to liability for cave-ins and other hazards for which it cannot insure or against which it may elect not to insure where premium costs are disproportionate to the Company’s perception of the relevant risks.  The payment of such insurance premiums and of such liabilities would reduce the funds available for exploration activities and could force Golden Goliath to cease operations.

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ITEM 4.  INFORMATION ON THE COMPANY

4.A. History and Progress of the Company

Introduction

Golden Goliath ’s executive office is located at:

Suite 711, 675 West Hastings Street

Vancouver, British Columbia, Canada  V6B 1N2

Telephone: 604-682-2950

Facsimile: 604-685-3764

Website: www.goldengoliath.com

Email: jps@goldengoliath.com

The contact person is: Mr. J. Paul Sorbara, President/Director.

Golden Goliath’s fiscal year ends August 31st.

Golden Goliath’s common shares trade on the TSX Venture Exchange under the symbol: “GNG”.  The common shares also trade in Europe on the Berlin Stock Exchange, the Frankfurt Stock Exchange, the Munich Stock Exchange, and the XETRA Exchange.

The authorized capital of Golden Goliath consists of an unlimited number of common shares without par value. At 8/31/2011, the end of the most recent fiscal year, there were 92,216,445 common shares issued and outstanding; and at 01/31/2012 there were 92,216,445 common shares issued and outstanding.

In this Annual Report, unless otherwise specified, all dollar amounts are expressed in Canadian Dollars (CDN$).

Incorporation and Name Changes

The Company was incorporated in British Columbia under the Company Act (British Columbia) on 6/12/1996 by Certificate of Incorporation under the name 521858 B.C. Ltd. and was granted a certificate of change of name on 9/10/1998 under the name of Golden Goliath Resources Ltd.

Subsidiaries

The Company has two wholly-owned subsidiaries:

a.  Minera Delta SA de CV; incorporated in Mexico on 7/17/1992; and

b.  4347 Investments Ltd.; incorporated in British Columbia on 2/3/1999.

Financings

The Company has financed its operations through funds raised public/private placements of common shares.  Also shares have been issued upon exercise of options and warrants; and as agent commissions.  Refer to ITEM #10.A.6 for additional information.

Fiscal Year	Nature of Share Issuance	Number of Securities	Gross Amount
Fiscal 2012	Nil
Fiscal 2011	Exercise of Stock Options	675,000	$118,500
Fiscal 2011	Exercise of Warrants	10,885,942	$2,721,486
Fiscal 2010	Private Placement of Units	19,721,466	$2,958,220

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Capital Expenditures

Fiscal Year	Capital Expenditures	Purpose
Fiscal 2011	$1,100,965	Mineral Property Expenditures
Fiscal 2011	$74,238	Purchase of Capital Assets
Fiscal 2010	$751,533	Mineral Property Expenditures
Fiscal 2010	$10,880	Purchase of Capital Assets
Fiscal 2009	$1,365,900	Mineral Property Expenditures
Fiscal 2009	$22,247	Purchase of Capital Assets

Plan Of Operations

Source of Funds for Fiscal 2011 Ending 8/31/2012

The Company’s primary source of funds since incorporation has been through the issuance of equity.  As of 8/31/2011, the Company had working capital of $2,713,392.

Use of Funds for Fiscal 2012 Ending 8/31/2012

During Fiscal 2012, the Company estimates that it might expend approximately $0.6 million on general/administrative, investor-relations expenses, etc.  During Fiscal 2012, the Company estimates that it might expend approximately $1.0 million on property exploration/development.

Anticipated Changes to Facilities/Employees

The Company has no current plans to add any additional personnel.  Management anticipates that any additional property exploration efforts will be carried out by outside contractors.

United States vs. Foreign Sales

The Company has recorded no sales since incorporation.

At 8/31/2011, $9,184,344 in assets were located in Mexico, primarily mineral properties and $2,838,264 in assets were located in Canada, primarily current assets.

At 8/31/2010, $8,279,017 in assets were located in Mexico, primarily mineral properties and $1,953,210 in assets were located in Canada, primarily current assets.

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4.B.  BUSINESS OVERVIEW

Corporate Overview

Golden Goliath Resources Ltd. is a junior exploration company listed on the TSX Venture Exchange (symbol GNG).  The Company is focused on exploring and developing the gold and silver potential of an historic mining camp located in the Sierra Madre Occidental Mountains of northwestern Mexico.  The Uruachic mining camp lies directly in the center of the several-hundred-kilometer trend of important past producers and new discoveries that characterize the Sierra Madre Occidental.  Uniquely, Golden Goliath controls an entire old mining camp, or district, that covers an area of 15-kilometers by 25-kilometers, with numerous past-producing gold and silver mines dating back to the time of the Spaniards.  Golden Goliath’s Uruachic claims are owned 100% by the Company and are fully paid for with no property option or purchase payments to make.

Golden Goliath also owns two other significant properties outside of the Uruachic Camp.

One of these is a silver property called La Cruz, which is located on the eastern edge of the Sierra Madre Belt.   La Cruz has several old mine workings and extensive old dumps, attesting to considerable past production.  However the property has been inactive for at least 75 years and there are no available records of production or previous exploration drilling.  La Cruz gained the attention of well-known international silver producer, Pan American Silver, and in September 2007, Golden Goliath signed an Option and Joint Venture Agreement with Pan American’s Mexican subsidiary.  Under the terms of the option agreement, Pan American Silver Corp’s Mexican subsidiary, Minera Corner Bay S.A. de C.V., has the right to earn a 60% interest in La Cruz by making cash payments totaling US$300,000 and spending US$450,000 on the property over a period of three years.  The property will consist of: the Company’s La Cruz property; additional ground staked around the La Cruz property; and the La Cruzada property for which Pan American’s subsidiary already has an option.  Golden Goliath will be responsible for 25% of the costs associated with La Cruzada.  Upon Minera Corner Bay exercising its option, a 60/40 joint venture would proceed on the La Cruz and newly staked grounds, with Pan American having the right to earn an additional 15% by completing a feasibility study.  This option was terminated after an initial drill program conducted by Corner Bay.

The other exploration property that Golden Goliath owns is called Chamizal.  This property differs from the others in that it is a lead, zinc, silver target and it lies outside of the Sierra Madre in central Chihuahua State.  This region hosts two lead, zinc, silver mines called Santa Eulalia and Naica.  Together these two deposits have produced 60 million tonnes of ore grading 15% combined lead-zinc and 150 grams silver per tonne.  The Chamizal Property is hosted in the same geological formation as the Santa Eulalia and Naica and also has the same style of alteration.  Chamizal also has old workings that were used to produce lead, zinc and silver, and as in Uruachic, these workings have never been drilled.”

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Figure No. 1

Mineral Property Location Map

In May 2007 and amended April 2011, the Company optioned the Corona and El Chamizal properties to a company which undertook to spend $500,000 and $200,000 on the respective properties over a period of three years and issue 400,000 (150,000 shares received) and 150,000 (25,000 shares received) shares respectively to the Company over a period of two years.  In order to keep the option in good standing, the optionee must also pay $50,000 (received) and issue 200,000 shares to the Company (received).    

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Exploration costs on the Company’s properties for the 2011, 2010 and 2009 fiscal years are detailed below:

	SAN TIMOEO ORO LEON  NUEVA UNION  LA REFORMA	OTEROS  LA ESPERANZA  LA HERMOSA	BUFALO  LA BARRANCA	LOS HILOS LOS BOLAS MANTO DON LAZARO LA VERDE	NOPALERA FLOR DE TRIGO	CORONA EL CHAMIZAL BECK EL CANARIO LA CRUZ	LAS TROJAS LA GLORIA TODOS LOS SANTOS LOS CANTILES	TOTAL
Balance, 8/31/2010	$3,750,694	NIL	$60,362	$3,481,528	$329,055	$107,624	$25,734	$7,754,997
Assaying	Nil	Nil	Nil	104,137	112,947	Nil	Nil	217,084
Drilling	Nil	Nil	Nil	266,099	Nil	Nil	Nil	266,099
Geology and mapping	652	Nil	Nil	17,907	28,781	Ni1	514	47,340
Property taxes and rights	15,024	4,974	21,366	5,270	8,024	707	3,363	58,728
Travel	9,714	Nil	Nil	6,787	9,518	2,117	121	28,257
Road construction / site	Nil	Nil	Nil	42,316	38,835	649	3,099	84,899
Facilities and other	40,750	Nil	Nil	123,781	158,697	35,676	18,445	377,349
Option payment received						(69,290)		($69,290)
FY2011 Costs	$66,140	4,974	$21,366	$566,297	$356,802	$30,141	$25,028	$1,010,466
Write-Down	($82,279)	($4,974)	Nil	($15,913)	Nil	Nil	($15,603)	($118,769)
Balance, 8/31/2011	$3,734,555	Nil	$81,728	$4,031,912	$685,857	$77,483	$35,159	$8,646,694

	SAN TIMOEO ORO LEON  NUEVA UNION  LA REFORMA	OTEROS  LA ESPERANZA  LA HERMOSA	BUFALO  LA BARRANCA	LOS HILOS LOS BOLAS MANTO DON LAZARO LA VERDE	NOPALERA FLOR DE TRIGO	CORONA EL CHAMIZAL BECK EL CANARIO LA CRUZ	LAS TROJAS LA GLORIA TODOS LOS SANTOS LOS CANTILES	TOTAL
Balance, 8/31/2009	$3,679,972	$15,549	$39,982	$2,866,997	$277,671	$65,181	$62,178	$7,007,530
Assaying	Nil	Nil	Nil	132,869	504	Nil	Nil	133,373
Drilling	Nil	Nil	Nil	135,984	Nil	Nil	Nil	135,984
Geology and mapping	220	Nil	Nil	109,609	Nil	Nil	514	110,343
Property rights	12,928	2,506	20,380	3,156	7,146	10,876	1,839	58,831
Travel	12,318	Nil	Nil	13,459	850	1,586	825	29,038
Road construction / site	3,637	Nil	Nil	53,902	9,456	Nil	Nil	66,995
Facilities and other	41,619	Nil	Nil	170,754	33,428	29,981	11,419	287,201
FY2010 Costs	$70,722	2,506	$20,380	$619,733	$51,384	$42,443	$14,597	$821,765
Write-Down	Nil	($18,055)	Nil	($5,202)	Nil	Nil	($51,041)	$(74,298)
Balance, 8/31/2010	$3,750,694	Nil	$60,362	$3,481,528	$329,055	$107,624	$25,734	$7,754,997

	SAN TIMOEO ORO LEON  NUEVA UNION  LA REFORMA	OTEROS  LA ESPERANZA  LA HERMOSA	BUFALO  LA BARRANCA	LOS HILOS LOS BOLAS MANTO DON LAZARO LA VERDE	NOPALERA FLOR DE TRIGO	CORONA EL CHAMIZAL BECK EL CANARIO LA CRUZ	LAS TROJAS LA GLORIA TODOS LOS SANTOS LOS CANTILES	TOTAL
Balance, 8/31/2008	$4,965,167	$12,754	$26,069	$2,081,031	$265,842	$49,911	$48,834	$7,449,608
Assaying	58,255	Nil	Nil	94,154	Nil	Nil	Nil	152,409
Drilling	Nil	Nil	Nil	434,750	Nil	Nil	Nil	434,750
Geology and mapping	12,884	Nil	Nil	79,580	Nil	Nil	Nil	92,464
Property rights	13,113	2,795	13,913	4,340	10,565	1,717	1,382	47,825
Travel	14,708	Nil	Nil	16,257	Nil	516	Nil	31,481
Road construction / site	11,873	Nil	Nil	29,355	Nil	Nil	Nil	41,228
Facilities and other	39,632	Nil	Nil	127,530	1,264	13,037	11,962	193,176
FY2009 Costs	$150,465	2,795	$13,913	$785,966	$11,829	$15,270	$13,344	$993,582
Write-Down	($1,435,660)	Nil	Nil	Nil	Nil	Nil	Nil	$(1,435,660)
Balance, 8/31/2009	$3,679,972	$15,549	$39,982	$2,866,997	$277,671	$65,181	$62,178	$7,007,530

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Fiscal 2011 Property Acquisition and Exploration

First Quarter:  During the quarter ended November 30, 2010, the Company announced it had signed a letter of intent with the Mexican subsidiary of Agnico-Eagle Mines Ltd. For the exploration and development of the Company’s Las Bolas and Los Hilos properties.

Las Bolas Property

During the first quarter, the Company completed its diamond-drilling program on the Las Bolas property.  Approximately 3,100 meters were drilled in total with the majority of the holes being completed on the Los Hilos area.  The program was quite successful as it outlined both low-grade, bulk-tonnage silver potential at Los Hilos in the Filo de Oro zone as well as higher-grade vein-style mineralization below the low-grade zone.  This area is a topographic ridge referred to as the Filo de Oro.  Based on the Company’s work, Filo de Oro has two components.  There is a large, near surface zone up to 540 meters in width and approximately 230 meters thick, which overlies near-vertical higher-grade-vein feeder zones that are beneath and cut through the surface zone.  An important porphyry zone has been found at depth on the southern portion of Filo de Oro.  This is important because the flagship discovery of Fresnillo PLC, the Orisyvo project, lies just a few kilometers southeast of the southern end of Filo de Oro.

In addition, the deeper holes on the southern end of the Los Hilos area encountered mineralized prophyryitic intrusive, which opened the door to a third potential style of mineralization, one with large tonnage potential.  The geological importance of Filo de Oro is much enhanced by this as Orisyvo is a porphyry-related gold system, with an oxide zone open to the north and west and a sulphide zone core with good grade partially explored.  That means Orisyvo is open in the direction of Filo do Oro and is a similar geological model as at Los Hilos, including being related to an intrusive porphyry system, which is what was found at depth on the southern end of the Filo do Oro trend.  Porphyry systems have large tonnage potential and the similarities to Filo do Oro are very obvious.

On the Las Bolas side (west side) of the property the high-grade vein mineralization was extended along strike and at depth with very encouraging results on the Corazon, Frijolar and Las Bolas Trends.

Perhaps most significantly, at the end of November 2010, the Company received an offer from the Mexican subsidiary of Agnico-Eagle Mines Limited for an option/Joint venture agreement on the Las Bolas Property.  A Letter of Intent was signed in early December 2010. Under the terms of the option agreement, Agnico’s Mexican subsidiary has the right to earn a 51% interest in the Las Bolas and Los Hilos properties by spending $5,000,000 on the properties over a period of five years.  The first year’s work commitment is a firm commitment of $500,000 with expenditure requirements increasing each year thereafter.  Upon exercising its option, Agnico will have the right to earn an additional 20% interest by completing a feasibility study or by spending an additional $10,000,000 over another period of five years.  A comprehensive Earn-In and Shareholders Agreement between the Company and Agnico-Eagle Mines Limited was signed on 12/8/2011 to formalize the above mentioned agreement.

Other Properties

Throughout the first quarter, the Company did not perform any significant work on its other properties. With the Las Bolas and Los Hilos properties under option to Agnico-Eagle the Company is looking forward to focusing on some of these other properties in the upcoming year

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Second Quarter:  During the second quarter ending February 28, 2011, the Company compiled the final report for the drilling program on the Las Bolas/ Los Hilos property to provide a comprehensive summary to Agnico-Eagle Mines so they can properly conduct future exploration on the property.  Preliminary work also began on the Nopelera property with a focus on mapping and sampling all outcrops.

Las Bolas Property

During the second quarter, the Company compiled the final report for the drilling program on the Las Bolas/Los Hilos property.  This comprehensive document included maps and sections for all of the drill holes.  The program was very successful in that it defined new zones of mineralization on the Los Hilos claims.  These zones include vein mineralization extending beneath the main Los Hilos mine tunnel, in the Filo de Oro North area and other parts of the east side of the property, as well as disseminated mineralization in the Orito zone and in the Filo de Oro South area, where mineralization is related to an intrusive porphyry system.  Based on the Company's work, Filo de Oro has two components.  There is a large, near surface zone up to 540 meters in width and approximately 230 meters thick, which overlies near-vertical higher-grade-vein feeder zones that are beneath and cut through the surface zone.

On the western portion of the property, in the area of the main Las Bolas workings, the drilling successfully extended the known strike length of the three existing northeast trends.  Important high-grade intercepts were also made at depths lower than the Las Bolas tunnel.  These intercepts are the deepest to date on this area of the property and indicate that potential is open to depth.  These intercepts also indicate that mineralization in this area of the property may be related to the high grade sulphide mineralization found in the El Manto area, which is further west near the Rio Uruachic, and is the lowest possible adit level on the property.

During December the Company signed a Letter of Intent with the Mexican subsidiary of Agnico-Eagle Mines Limited for an option/Joint Venture on the Las Bolas Property.  Under the terms of the agreement, Agnico can earn a 51% interest in the property by spending $5 million in exploration over five years.  Agnico can then earn an additional 20% interest by completing a feasibility study or by spending another $10 million in exploration work. The Company views this agreement as an important milestone. A comprehensive Earn-In and Shareholders Agreement between the Company and Agnico-Eagle Mines Limited was signed on 12/8/2011 to formalize the above mentioned agreement.

Nopalera Property

During the second quarter, the Company also started fieldwork on its 100% owned Nopalera claim.  Nopalera is a large claim that adjoins the Los Hilos claims on the east side.  Nopalera hosts a very large and intense alteration zone which is related to a porphyry intrusion and has a chemical trace element signature that is very similar the Fresnillo PLC’s new flagship discovery called Orisyvo.  The Orisyvo claims are contiguous to the Nopalera property on its southeast corner.  Work on Nopalera during the quarter included compilation and interpretation of all of the historic data on the property, as well as the construction of new access roads and the rehabilitation and sampling of several small old mine workings.  The Company believes that Nopalera has a geologic setting, stratigraphic interval, and pathfinder distribution pattern that indicates that gold mineralization may lie at depth.  These characteristics are also very similar to those believed to be present at the Orisyvo.

The Company is pursuing an aggressive exploration program for the Nopalera claim leading to a major diamond-drilling program later in the year.

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Other Properties

Throughout the second quarter, the Company did not perform any significant work on its other properties.  With the Las Bolas and Los Hilos properties under option to Agnico-Eagle the Company is looking forward to focusing on some of these other properties in the upcoming year.

Third Quarter:  During the second quarter ending 2/28/2011, the Company compiled the final report for the drilling program on the Las Bolas/Los Hilos property to provide a comprehensive summary to Agnico-Eagle Mines so they can properly conduct future exploration on the property.  Preliminary work also began on the Nopelera property with a focus on mapping and sampling all outcrops.

Las Bolas Property

During the third quarter ended May 31, 2011 the Company worked with the legal team from Agnico Eagle Mines Ltd. on the final agreement for the Las Bolas property option and joint venture.  During December 2010, the Company signed a Letter of Intent with the Mexican subsidiary of Agnico-Eagle Mines Limited for an option/Joint Venture on the Las Bolas Property.  Under the terms of the agreement, Agnico can earn a 51% interest in the property by spending $5 million in exploration over five years.  Agnico can then earn an additional 20% interest by completing a feasibility study or by spending another $10 million in exploration work. The Company views this agreement as an important milestone.  A comprehensive Earn-In and Shareholders Agreement between the Company and Agnico-Eagle Mines Limited was signed on 12/8/2011 to formalize the above mentioned agreement.  The final report on the Company’s work on Las Bolas has been completed and our exploration efforts have shifted focus to our Nopalera property.

Nopalera Property

During the third quarter, the Company continued field work on its 100% owned Nopalera property.  Nopalera is a large claim that adjoins the Los Hilos claims on the west side.  Nopalera hosts a very large and intense alteration zone that is related to a porphyry intrusion and has a chemical trace element signature that is very similar to the nearby Fresnillo PLC’s new flagship discovery called Orisyvo.  The Orisyvo claims are contiguous to the Nopalera property on its southeast corner.  Fresnillo’s sister company Peñoles has also surrounded the Golden Goliath claims with their own staking.  This has led to the development of what is essentially an area play with three major companies, Frenillo, Peñoles and Agnico Eagle mines Ltd. and one junior company, namely Golden Golaith Resources.  Work on Nopalera during the quarter included compilation and interpretation of all of the historic data on the property, as well as the construction of new access roads and the rehabilitation and sampling of several small old mine workings.  In addition, the Company purchased a new geophysical instrument (called Terraspect) that allows the identification of specific clay minerals.  Clay mineralogy is important as it distinguishes between hydrothermal alteration generated at depth by metaliferous fluids, from clay minerals formed by meteoric weathing and provides vectors for drilling.  The Company believes that Nopalera has a geologic setting, stratigraphic interval and pathfinder distribution pattern which indicates that gold mineralization may lie at depth.  These characteristics are also very similar to those believed to be present at the Orisyvo.  The Company is pursuing an aggressive exploration program for the Nopalera claim leading to a major diamond-drilling program as soon as practicable.

Other Properties

Throughout the third ended May 31, 2011, the Company did not perform any significant work on its other properties.  With the Las Bolas and Los Hilos properties under option to Agnico-Eagle the Company is looking forward to focusing on some of these other properties.

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Fourth Quarter and Fiscal Year:  During the year ended August 31, 2011, the Company compiled the final report for the drilling program on the Las Bolas / Los Hilos property to provide a comprehensive summary to Agnico-Eagle Mines so they can properly conduct future exploration on the property.  Preliminary work also began on the Nopelera property continuing to the date hereof with a focus on mapping and sampling all outcrops, road building and rehabilitation of old adits.

Las Bolas Property

During Fiscal 2011, the Company completed its drilling program on the Las Bolas/Los Hilos property and then worked with the legal team from Agnico-Eagle Mines Limited (“Agnico”) on the final agreement for the Las Bolas property option and joint venture.  During December 2011, the Company signed the final Earn-in and Shareholders Agreement with Agnico-Eagle Mines Limited (“Agnico”) (NYSE: AEM) (TSX: AEM) for the exploration and development of the Company’s Las Bolas/Los Hilos property (see map).  Under the terms of the agreement, which is subject to conditions, including TSX-V approval, Agnico’s Mexican subsidiary has the right to earn a 51% interest in the property by spending $5,000,000 on the property over a period of five years.  The first year’s work commitment is a firm commitment of $500,000 with expenditure requirements increasing each year thereafter.  Upon exercising its option, Agnico will have the right to earn an additional 20% interest by spending $4 million over another period of four years and completing a feasibility study or by spending $10 million over a longer period of eight years.  The Company views this agreement as an important milestone.

Nopalera Property

During Fiscal 2011, the Company continued fieldwork on its 100% owned Nopalera property.  Nopalera is a large claim that adjoins the Los Hilos claims on the west side.  Nopalera hosts a very large and intense alteration zone which is related to a porphyry intrusion and has a chemical trace element signature that is very similar to abutting large ore discoveries that surround the Golden Goliath claims.  This has led to the development of what is essentially an area play with three major companies, Frenillo, Peñoles and Agnico Eagle Mines Ltd. and one junior company, namely Golden Golaith Resources.

Work on Nopalera during the yearincluded compilation and interpretation of all of the historic data on the property, as well as the construction of new access roads and the rehabilitation and sampling of several small old mine workings.  In addition, the Company purchased a new geophysical instrument (called Terraspect) that allows the identification of specific clay minerals.  Clay mineralogy is important as it distinguishes between hydrothermal alteration generated at depth by metaliferous fluids, from clay minerals formed by meteoric weathing and provides vectors for drilling.  The Company believes that Nopalera has a geologic setting, stratigraphic interval and pathfinder distribution pattern which indicates that gold mineralization may lie at depth.

The Company is pursuing an aggressive exploration program for the Nopalera claim leading to a major diamond-drilling program as soon as practicable.

Other Properties

Throughout Fiscal 2011, the Company did not perform any significant work on its other properties.  With work on the Las Bolas and Los Hilos properties being conducted by Agnico, the Company is looking forward to focusing on some of these other properties.

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Fiscal 2010 Property Acquisition and Exploration

First Quarter:  During the first fiscal quarter ended November 30, 2009, the Company was working on its NI 43-101 technical report and continued underground sampling and mapping at its Las Bolas property as well as surface prospecting and sampling along strike of the known mineralization at Las Bolas.  During the first quarter, the Company did not perform any work on its other properties.

Las Bolas Property

During the first quarter, the Company ended the drilling program on the Las Bolas property but continued extensive underground and surface work, which was concentrated within the main underground workings, including the Las Bolas tunnel, Frijolar, Providencia, Gambusino and El Corazon.  Very detailed underground mapping and sampling was carried out in these workings resulting in a dramatic improvement in the understanding of the nature and distribution of the mineralization.  This work determined, for example, that the Las Bolas vein actually consists of at least seven discrete vein structures that are in close proximity to each other, that there are at least two separate mineralized structures within the Frijolar workings and that there are four separate fracture systems controlling the mineralization.  The detailed sampling returned extremely encouraging results, such as in the Station 37 area in the Las Bolas tunnel.  Surface work and data compilation resulted in the identification of at least eleven mineralized veins or vein systems on the Las Bolas property.  Some of these systems, such as the one on which the Las Bolas tunnel was developed, were found to actually contain numerous closely spaced mineralized veins that increased the potential economic viability of the deposit.  The mineralization was found to fall within three recognized mineral trends thst cross the Las Bolas property in a northeast–southwest direction.  These are called the Las Bolas-Gambusino trend, the Frijolar trend and the El Corazon trend.  The strike length of these trends extends for at least 2,500 meters and old workings with known mineralization are present over a vertical interval of 600 meters. Subsequent work to the west across the Rio Uruachic has uncovered several new showings indicating that the strike length may be closer to 3.000 meters.  In May 2009, an independent consultant, Victor Jaramillo P.Geo of Discover Geological Consultants, was retained to write a 43-101 compliant report on the Las Bolas property, completed in December 2009.  His work, which overlapped with the Company’s underground mapping and sampling, confirmed the distribution of the mineralization.  The author of the report believes that the Las Bolas-Los Hilos Property hosts an early stage mesothermal system of silverlead-zinc veins followed by a later low sulphidation epithermal gold-silver phase.  Both systems are structurally controlled and confined mainly along fault zones as veins, silica stockworks and breccias.  Mesothermal vein systems are formed at considerable depths (from 600-meters to 1000-meters or more) by hydrothermal processes in a temperature range of 200°C to 300°C.  The presence of dark gray quartz veins, cutting and brecciating the early silver-base metal mesothermal veins or oxide veins may be related to this later epithermal event.  The report proposes the following mineral characterization: Type-1 mineralization: Ag + Pb + Zn (Au); and Type-2 mineralization: Au + Ag + As (Cu).  The report also provided specific recommendations including the development of a new underground cross cut within the Las Bolas workings in order to provide a new clear section across all of the vein structures which will allow further detailed sampling and understanding of the structures.  In the first quarter the Company also identified a new mineralized trend on the east side of the Las Bolas property which runs in a near north-south direction, crossing the other three main trends.  The new trend, called Filo do Oro also has old workings and has a higher gold ratio than the most of the mineralization in the workings further west. This cross cutting trend contains veins as well as disseminated mineralization, suggesting good potential for a bulk minable gold/silver deposit with high grade feeder veins running through it.  Filo de Oro is open in all directions and has a higher gold ratio.

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Second Quarter:  During the second fiscal quarter ended February 28, 2010, the Company closed a private placement for gross proceeds of $3 million;  the proceeds were primarily used to expand the mineral resource at the Company’s Las Bolas property and to work on the new Filo do Oro zone on the east side of the Las Bolas property.  During the second quarter, the Company did not perform any work on its other properties.

Las Bolas Property

During the second quarter, the Company concentrated fieldwork on the portion of the Las Bolas property called the Filo de Oro trend.  The significance of this large zone and its potential for a bulk mineable gold deposit was recognized in the later part of 2009.  Rehabilitation of the main workings in the area, called the Los Hilos West tunnel, included crossing an internal, water-filled shaft to access the last portion of the tunnel.  Detailed mapping and systematic sampling of this and other smaller workings showed that gold mineralization in the one to multi gram range and is hosted in many vein systems of different orientations in the metre wide range.  The gold values within the Los Hilos West tunnel in the vicinity of the internal shaft are significantly higher and it seems that the shaft was excavated to follow those higher grades.  This likely indicates that the mineralization extends to depth below the level of the tunnel. Lower grade, but still very significant gold mineralization, was also found in breccia zones and wall rock in general.  Silver accompanied the gold values, but gold is the dominant metal.  In total, the Los Hilos West tunnel had 275 channel samples taken over its entire 208-meter length.  The sampling density from 80 meters to 144 meters along the length of the tunnel averages one sample every 4.5 meters and requires infill sampling.  The mineralization is still open since the last three contiguous samples at the end of the tunnel.  The Los Hilos area includes the Los Hilos, Mosca de Plata and Palo Dulce vein systems that in turn are part of the larger NE-SW Frijolar mineralized trend.  The north-south Filo de Oro trend intersects the Frijolar trend and the high grade vein systems act as sweeteners for the Filo de Oro bulk tonnage potential.  Detailed surface mapping and sampling was also conducted in this area with very positive results.  A preliminary average grade for the combination of surface and underground sampling was established to be approximately 1.5 g/t gold equivalent (assuming 100% silver recovery and a gold silver ratio of 1:60).  The topography is very favorable, with the zone being an easily accessible topographic ridge, with a zero stripping ratio.   Based on the Company's work, Filo de Oro has two components.  A large surface zone that may be over 1,120 meters in length, from 200 to 440 meters in width and approximately 230 metres thick, overlying near-vertical high-grade-vein feeder zones that are beneath and cut through the surface zone.  The roughly north-south Filo de Oro trend is a topographic high located at the east end of the east-west Las Bolas, Frijolar and Corazon trends.  These three east west trends host the other twelve known vein systems on the Las Bolas property and the main Las Bolas mine workings that were the focus of the NI 43-101 report completed last fall.

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Third Quarter:  During the quarter ending May 31, 2010, the Company continued work on its Las Bolas property concentrating on the new Filo do Oro zone on the east side of the property in preparation for drilling.  During the third quarter ended May 31, 2010, the Company did not perform any work on its other properties.

Las Bolas Property

During the quarter, the Company concentrated fieldwork on the portion of the Las Bolas property called the Filo de Oro trend.  This new zone will be included in the next drill program, which has commenced as of the date hereof.  The significance of this large zone and its potential for a bulk mineable gold deposit was recognized in the latter part of 2009.  Rehabilitation of the main workings in the area, called the Los Hilos West tunnel, included crossing an internal, water-filled shaft to access the last portion of the tunnel.  Detailed mapping and systematic sampling of this and other smaller workings showed that gold mineralization in the one to multi gram range and is hosted in many vein systems of different orientations in the metre wide range.  The gold values within the Los Hilos West tunnel in the vicinity of the internal shaft are significantly higher and it seems that the shaft was excavated to follow those higher grades.  This likely indicates that the mineralization extends to depth below the level of the tunnel.  Lower grade, but still very significant gold mineralization, was also found in breccia zones and wall rock in general. Silver accompanied the gold values, but gold is the dominant metal.  The Los Hilos West tunnel has been extensively sampled with very encouraging results: some 275 channel-samples taken over its 208-meter length.  The sampling density from 80 meters to 144 meters along the length of the tunnel averages one sample every 4.5 meters and requires infill sampling.  The mineralization is still open since the last three contiguous samples at the end of the tunnel.  The Los Hilos area includes the Los Hilos, Mosca de Plata and Palo Dulce vein systems that in turn are part of the larger NE-SW Frijolar mineralized trend.  The north-south Filo de Oro trend intersects the Frijolar trend and the high-grade vein systems act as sweeteners for the Filo de Oro bulk tonnage potential.  Detailed surface mapping and sampling was also conducted in this area with very positive results.  The topography is very favorable, with the zone being an easily accessible topographic ridge, with a zero stripping ratio.  The roughly north-south Filo de Oro trend is a topographic high located at the east end of the east-west Las Bolas, Frijolar and Corazon trends. These three east west trends host the other twelve known vein systems on the Las Bolas property and the main Las Bolas mine workings that were the focus of the NI 43-101 report completed Fall 2009.  Drilling planned for the fourth quarter will include holes in the Las Bolas area, as recommended in the Company’s 43-101 report as well as the first diamond drill holes in the Los Hilos area.  Extensive road building and drill station preparations have been completed following a review of geological, geochemical and structural information and the selection of the drill hole locations.

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Fourth Quarter:

During the fourth quarter ending August 31, 2010, the Company continued the diamond drilling program on its Las Bolas property concentrating on the new Filo do Oro zone on the east side of the property in preparation for drilling.

Subsequent to the quarter end the Company announced it had signed a letter of intent with the Mexican subsidiary of Agnico-Eagle Mines Ltd. for the exploration and development of the Company’s Las Bolas and Los Hilos properties.

Las Bolas Property

During the fourth quarter, the Company continued field work on the portion of the Las Bolas property called the Filo de Oro trend.  The significance of this large zone and its potential for a bulk mineable gold deposit was recognized in the latter part of 2009.

Rehabilitation of the main workings in the area, called the Los Hilos West tunnel, included crossing an internal, water-filled shaft to access the last portion of the tunnel.  Detailed mapping and systematic sampling of this and other smaller workings showed that gold mineralization in the one to multi gram range and is hosted in many vein systems of different orientations in the metre wide range.  The gold values within the Los Hilos West tunnel in the vicinity of the internal shaft are significantly higher and it seems that the shaft was excavated to follow those higher grades.  This likely indicates that the mineralization extends to depth below the level of the tunnel.  Lower grade, but still very significant gold mineralization, was also found in breccia zones and wall rock in general. Silver accompanied the gold values, but gold is the dominant metal.

A total of 22 diamond drill holes were completed on the Los Hilos portion of the Las Bolas property alone during the final fiscal quarter.  Subsequent to the quarter, more holes were completed on the western side of the property (Las Bolas area) for a drilling total of just over 4,000 metres.  The results from the Los Hilos area showed that mineralization extends well away from the Los Hilos tunnel, covering an area that is over 1.5 kilometres in length and almost one kilometre wide.  This area is a topographic ridge referred to as the Filo de Oro. Based on the Company's work, Filo de Oro has two components. There is a large, near surface zone up to 540 metres in width and approximately 230 metres thick, which overlies near-vertical higher-gradeveinfeeder zones that are beneath and cut through the surface zone. An important porphyry zone has been found at depth on the southern portion of Filo de Oro.  This is important because the flagship discovery of Fresnillo PLC, the Orisyvo project., lies just a few kilometres southeast of the southern end of Filo de Oro. Orisyvo; that is a massive project by one of the world’s largest mining companies.  The geological importance of Filo de Oro is much enhanced as Orisyvo is a porphyry-related gold system, with a an oxide zone open to the north and west and a sulphide zone core with good grade partially explored.  That means Orisyvo is open in the direction of Filo do Oro and is a similar geological model as at Los Hilos, including being related to an intrusive porphyry system, which is what was found at depth on the southern end of the Filo do Oro trend.  Porphyry systems have large tonnage potential and the similarities to Filo do Oro are very obvious.  The drilling results from the las Bolas area are still being complied as not all assays have been received.  It must also be kept in mind that the roughly north-south Filo de Oro trend is only one of the four known mineralized trends on the Las Bolas property.  The three east west trends host the other 12 known vein systems on the Las Bolas property and the main Las Bolas mine workings which were the focus of the NI 43-101 report completed last Fall.

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Throughout the fourth quarter The Company was involved in negotiations with Agnico-Eagle Mines Limited regarding a possible Option and Joint Venture Agreement on the Las Bolas Property.  A Letter of Intent was signed with a Mexican subsidiary of Agnico-Eagle Mines Limited in late November and was announced on December 7th.  This was a major milestone for the Company.  Under the terms of the option agreement, Agnico’s Mexican subsidiary has the right to earn a 51% interest in the Las Bolas and Los Hilos properties by spending $5,000,000 on the properties over a period of five years.  The first year’s work commitment is a firm commitment of $500,000 with expenditure requirements increasing each year thereafter.  Upon exercising its option, Agnico will have the right to earn an additional 20% interest by completing a feasibility study or by spending an additional $10,000,000 over another period of five years.  A comprehensive Earn-In and Shareholders Agreement between the Company and Agnico-Eagle Mines Limited was signed on 12/8/2011 to formalize the above mentioned agreement.

Other Properties

Throughout Fiscal 2010, the Company did not perform any significant work on its other properties.  With the Las Bolas and Los Hilos properties now under option to Agnico-Eagle the Company is looking forward to focusing on some of these other properties in the upcoming year.

Fiscal 2009 Property Acquisition and Exploration

First Quarter:  During the quarter ended 11/30/2008, the Company ended its exploratory diamond-drilling program on some of its Uruachic area properties.  Data compilation and surface work, including mapping and sampling continued through the end of the quarter.

During the Company’s first fiscal quarter, the exploratory diamond drilling program on the San Timoteo and Las Bolas properties was concluded.  The last holes in the San Timoteo area were completed in late September 2008 and at Las Bolas the last hole was completed in mid October 2008.  More work, including additional drilling, is needed in both areas.  The Company believes it has sufficient data to start on a mineral inventory.

San Timoteo Property.  The last drill holes on the San Timoteo property were drilled in the Sucursal area, which lies several hundred meters north of the old San Martin tunnel.  Very encouraging values were obtained from these holes and follow up drilling is definitely warranted.

The Company also searched for an electric underground drill for the holes that are required within the San Martin tunnel itself.  These holes will trace and further define several distinct high-grade silver and gold zones within the tunnel itself identified by continuous chip sampling of the walls.  These high-grade shoots are characterized by brecciation and intense alteration.  The extent and overall grade of these zones are important for the purpose on a resource calculation and the origin of them is important for continued exploration.  The zones, which occur at different locations along the length of the tunnel, are very difficult and expensive to drill from surface due to topographic conditions.  The surface is about 175 vertical meters above the tunnel and the steep hillside makes drill pad preparation only possible in certain areas.

In total for the San Timoteo area, the Company drilled 34 drill holes totaling 8,588 meters, targeting the San Timoteo claim itself, the area around the San Martin Tunnel, Sucursal and a geophysical chargeability anomaly.

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Las Bolas Property.  At Las Bolas, the Company’s 2008 diamond drill program had three primary targets: a) manto structures (on the western side of the one-kilometer-square exploration area, around the old El Manto tunnel); b) high grade silver bearing iron oxides and manganese clay structures (in the central area including the old Las Bolas and Gambusino mine tunnels); and c) the Frijolar structure (in the southern part of the area including the Frijolar tunnel.

In the manto structure target area, twelve diamond drill holes, namely BD-08-03 to BD-08-10 & BD-08-13 to BD-08-16 were drilled to intersect carbonaceous dark lutite manto-like units that have returned high silver and gold grades in some sections.  Other much wider intersections of lower, but still very good, grades were also encountered.

Drill holes BD-08-07 to BDD-08-09 were abandoned prior to reaching the manto level due to drill rods becoming stuck, however BD-08-13 & BD-08-14 did reach the manto target zone and returned anomalous grade assays.  BD-08-15, the northern most drill hole on the manto target, was drilled into an intrusive and hence determines the northern limit of the manto mineralized horizon.

From the current drilling program the Company has reached the conclusion that the manto horizon precious and base metal concentrations increase to the west and southwest.  Management will focus future drilling in these directions with the goal of building potentially mineable tonnage.  A surface sample taken to the west over a width of one meter from a manto exposure returned encouraging gold and silver mineralization.

On the high grade Las Bolas - Gambusino front, the Company successfully completed diamond drill hole BD-08-19, which tested the northern extension of the Las Bolas Contrapozo (raise).  Previous sampling of this raise returned encouraging gold/silver mineralization; the overall weighted average of the 127 chip samples taken in this area also was encouraging.  Drill hole BDD-08-20 also returned encouraging gold/silver mineralization.

Due to market conditions, after completing 26 holes in the Las Bolas area the Company decided to suspend the drilling of additional holes and concentrate its efforts on compiling the data already obtained and generating the sections needed in order to attempt a mineral inventory.  The mineral inventory estimation will take place, upon review of the existing data, under the supervision of an independent qualified person and will be conducted pursuant to NI 43-101 standards.  The study will greatly assist the Company in developing its 2009 drill program by defining target areas which can most easily add tonnage to the mineralization.

In total, the Las Bolas Diamond 2008 drilling program consisted of 26 diamond drill holes (3,551 meters).

Other Properties.  During the months of September, October and November, little work was performed by the Company on its other properties.

Second Quarter:  During the quarter ended 2/28/2009, the Company continued its data compilation and surface work and began a comprehensive program of detailed mapping and structural analysis including underground mapping and sampling.

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Las Bolas Property.  During the quarter ended February 28, 2009 the Company compiled the final results of the 2008 drilling and initiated a program of large-scale detailed mapping and structural analysis program focusing on the Las Bolas corridor, as well as other parts of the property, in order to begin work on a mineral inventory.  During January and February 2009, Golden Goliath’s technical team started preparing all the necessary data, level plans, cross sections and longitudinal sections for the study.  The study will also greatly assist the Company in developing its 2009 drill program by defining target areas that can most easily add tonnage to the mineralization.  The mineral inventory also requires additional underground sampling and detailed mapping which was initiated during this quarter.  Additional underground drilling of short holes into the walls of the tunnel may also be required and mining consultants have been brought in to assess the requirements that may be needed.

An effort was also launched during this period to open one or more of the other existing old workings on the Las Bolas property.  This includes the Papacho workings which trend towards the Arbolito shaft and areas of higher grade gold mineralization found in the past.  This involves both hand and caterpillar excavation and must proceed slowly for safety concerns as the loosely consolidated material surrounding the entrance to Papacho is unstable.

During the month of January a new zone with the potential of hosting more Las Bolas style mineralization was identified about 500 meters north of the main Las Bolas underground workings.  The host rock, andesitic breccia, and mineralization found in the new area, called Las Bolas II, are considered to be identical to the Las Bolas-Gambusino area and has been mapped to date over a 300-meter length and is open in two directions.  Preliminary grab samples of the mineralized structures returned encouraging assays of gold and silver mineralization.

San Timoteo Property.  During the quarter ended 2/28/2009, the Company also compiled the final drilling results from the San Timoteo area.  The Company would like to commence a mineral inventory of this area following the work being done at Las Bolas.  Consultants have been retained to access the safety and physical conditions within the San Martin tunnel.  Underground drilling within this tunnel will be required in order to determine the extent of the high grade gold and silver zones identified within the tunnel that could not be efficiently targeted from surface.

Other Properties.  During the months of December 2008, January 2009 and February 2009, little work was performed by the Company on its other properties.

Third Quarter:  During the quarter ended 5/31/2009, the Company continued working on its Las Bolas property. Underground sampling and mapping in the Las Bolas tunnel focused on two main areas, Stations 19 and 37, but work also included sampling from the furthest reaches of the tunnel.  The highest grades of gold ever recorded in the Uruachic camp, over 50 gms/tonne, were returned from Station 19 and Station 37 stopes.  Silver grades were very encouraging.

The assay results were not repeats of previous chip samples but comprise new information.  The assay results show the presence of high grade silver and gold mineralization not only in the structures, but in the hanging-wall and footwall as well.  These values demonstrate substantial mining widths.  The main portion of Station 19 covers a length of approximately 45 meters in the Las Bolas tunnel, approximately 60 meters below the surface, with a parallel zone 11 meters to the north that is exposed for a length of 20 meters.

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Station 37 is approximately 200 meters further along the Las Bolas workings than Station 19.  The main portion of Station 19 covers a length of approximately 45 meters in the Las Bolas tunnel, and is approximately 60 meters below the surface.

The recent results from stations 19 and 37, along with reverse circulation drill hole B-04-3, clearly show that this is a substantial zone, over 200 meters long, containing much higher gold values.

This new data will be included in the Company’s preliminary resource calculation already underway.  The detailed mapping in these areas revealed very important structural information that will assist with the targeting of the next round of drilling, which is planned to include both surface and underground drilling.

The underground work was augmented with preliminary sampling of old tunnels over 1,000 meters east of the Las Bolas tunnel.  In April 2009, the Company reported the identification of four-old workings located about 1,350 meters northeast of the entrance to the Las Bolas mine tunnel.  These workings have an east-west structural orientation on strike with the dominant mineralization associated in the high-grade areas of the Las Bolas workings.  The alteration zone in this new area is at least 12 meters wide exhibiting structures up to two meters in width in places, with rhyolites coming in contact with conglomerates.  These structures may be part of the Las Bolas-Gambusino mineralized system, which if confirmed, would significantly expand the strike length of this mineralized system.  These new discoveries add significantly to the exploration potential and size of the Las Bolas-Gambusino Gold Silver project, which has already been shown to host high-grade mineralization.   The mineralized structure is hosted in a polymictic conglomerate.  The occurrence of this structure in the polymictic conglomerate will expand the exploration potential, as it was previously believed that the mineralization was hosted in andesite and dacite only.

Other Properties.  During the months of March, April and May 2009, little work was performed by the Company on its other properties.

Fourth Quarter:

During the fourth fiscal quarter, the Company was working on its NI 43-101 technical report and continued underground sampling and mapping at its Las Bolas property as well as surface prospecting and sampling along strike of the known mineralization at Las Bolas.

Las Bolas Property

During Fiscal 2009 the Company ended the drilling program from the previous year on the San Timoteo, La Reforma and Las Bolas properties, but continued extensive underground and surface work on Las Bolas. The drilling ended in November 2008 with encouraging results from San Timoteo and Las Bolas, but with limited success on La Reforma. Exploration work shifted to underground and surface work on Las Bolas with very encouraging results.

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From late 2008 and throughout most of 2009, exploration work was concentrated within the main underground workings of the Las Bolas property, including the Las Bolas tunnel, Frijolar, Providencia, Gambusino and El Corazon.  Very detailed underground mapping and sampling was carried out in these workings resulting in a dramatic improvement in the understanding of the nature and distribution of the mineralization.  This work determined, for example, that the Las Bolas vein actually consists of seven discrete vein structures that are in close proximity to each other, that there are two separate mineralized structures within the Frijolar workings and that there are four separate fracture systems controlling the mineralization.  The detailed sampling returned extremely encouraging results particularly in the Station 37 area in the Las Bolas tunnel.

Surface work and data compilation resulted in the identification of at least eleven mineralized veins or vein systems on the Las Bolas property.  Some of these systems, such as the one on which the Las Bolas tunnel was developed, were found to actually contain numerous closely spaced mineralized veins that increased the potential economic viability of the deposit.

The mineralization was found to fall within three recognized mineral trends that cross the Las Bolas property in a northeast–southwest direction.  These are called the Las Bolas-Gambusino trend, the Frijolar trend and the El Corazon trend.  The strike length of these trends extends for at least 2,500 meters and old workings with known mineralization are present over a vertical interval of 600 meters.  Subsequent work to the west across the Rio Uruachic has uncovered several new showings indicating that the strike length may be closer to 3.000 meters.

In May 2009, an independent consultant, Victor Jaramillo P.Geo of Discover Geological Consultants, was retained to write a 43-101 compliant report on the Las Bolas property.  His work, which overlapped with the Company’s underground mapping and sampling, confirmed the distribution of the mineralization.  The author of the report believes that the Las Bolas-Los Hilos Property hosts an early stage mesothermal system of silver-lead-zinc veins followed by a later low sulphidation epithermal gold-silver phase.  Both systems are structurally controlled and confined mainly along fault zones as veins, silica stockworks and breccias.

Mesothermal vein systems are formed at considerable depths (from 600 meters to 1000 meters or more) by hydrothermal processes in a temperature range of 200°C to 300°C.  The presence of dark gray quartz veins, cutting and brecciating the early silver-base metal mesothermal veins or oxide veins may be related to this later epithermal event.  The report proposes the following mineral characterization:

Type-1 mineralization: Ag + Pb + Zn (Au)

Type-2 mineralization: Au + Ag + As (Cu)

It is the opinion of the author of the NI 43-101 report that “at Las Bolas-Los Hilos Property, the possibility for defining considerable more silver and gold mineralization is excellent.”

The report also provided specific recommendations including the development of a new underground cross cut within the Las Bolas workings in order to provide a new clear section across all of the vein structures which will allow further detailed sampling and understanding of the structures.

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In the Summer 2009, the Company also identified a new mineralized trend on the east side of the Las Bolas property that runs in a near north-south direction, crossing the other three main trends.  The new trend, called Filo do Oro also has old workings and has a higher gold ratio than the most of the mineralization in the workings further west. This cross cutting trend contains gold/silver veins as well as disseminated mineralization, suggesting good potential for a bulk mineable gold/silver deposit with high grade feeder veins running through it.  Filo de Oro is open in all directions and has a higher gold ratio.

Other Properties

During Fiscal 2009, the Company completed the drilling programs on its La Reforma and San Timoteo properties and then concentrated efforts on Las Bolas. Little work was performed by the Company on its other properties.

4.C. Organization Structure

The Company was incorporated in British Columbia under the Company Act (British Columbia) on 6/12/by Certificate of Incorporation under the name 521858 B.C. Ltd. and was granted a certificate of change of name on 9/10/1998 under the name of Golden Goliath Resources Ltd.  The authorized capital of the Company consists of an unlimited number of common shares without par value.

The Company directly or indirectly owns all of the issued and outstanding shares of Minera Delta S.A. de C.V. (“Minera Delta”).  Currently there are 50,000 Class “B” shares issued and outstanding in the capital of Minera Delta, 49,999 of which are held directly by the Company and one Class “B” share is held indirectly through 4247 Investments Ltd. (“4247”).  4247 is a wholly owned subsidiary of the Company, incorporated under the Company Act (British Columbia) on 2/3/1999.

Minera Delta is a Mexican mining company that was incorporated under the laws of Mexico on 7/17/1992.  The business office of Minera Delta is located at Pascual Orozco 909, 3er Piso, Desp. 13, Chihuahua, Chih, Mexico, CP31240.

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4.D.  Property, Plant and Equipment

This section first discloses where Golden Goliath’s office is located in Canada and then describes the mineral properties in which Golden Goliath has an interest.  In the description of the mineral properties, it is disclosed that these properties are only exploration stage properties and that a substantial amount of capital will have to be spent on each property before management will know if they contain commercially viable mineral deposits.

Golden Goliath’s executive offices are located in rented premises of approximately 1,500 sq. ft. at Suite 711, 675 West Hastings Street, Vancouver, British Columbia Canada  V6B1N2.  Golden Goliath began occupying these facilities in January 2001.  Monthly rent is $3,500.

All of the Company’s current mineral exploration properties except two (Chamizal and La Cruz) are located in close proximity to each other within the historic mining district of Uruachic in Chihuahua, Mexico.  Golden Goliath has a 100% interest in 10,000 hectares (25,000 acres) in the district.

Golden Goliath entered into an option/joint venture agreement with Comstock in 2007 on the Company’s Corona and El Chamizal claims. The agreement provides that Comstock can earn up to a 75% interest in these properties through cash and share payments, work expenditures and completing a positive feasibility study.  Since entering the agreement Comstock has completed various work programs spending in excess of $350,000.  The encouraging results have allowed Comstock to complete a transaction to become a publicly traded company. This was done by an amalgamation with Tectonic Minerals Corporation ("Tectonic"). Shareholders can obtain detailed exploration results on sedar under Tectonic’s profile.  Details of the amalgamation were announced by Tectonic on February 3, 2011.  In summary, the transaction has resulted in Tectonic acquiring all of the issued and outstanding shares of Comstock through a "three-cornered" amalgamation, whereby a wholly owned subsidiary of Tectonic amalgamated with Comstock. Through the amalgamation, shareholders of Comstock received 39,213,682 shares of Tectonic (includes shares issued pursuant to a brokered private placement of 8,750,000 units at a price of $0.20 per unit, for gross proceeds of $1.75 million), and the resulting amalgamated company, possessing the assets and business of Comstock, became Tectonic's wholly owned operating subsidiary.  The Company has been advised by Tectonic it will commence the next phase of exploration work on Golden Goliath’s Corona and Chamizal properties this Fall. Their proposed work program includes up to 1,000 metres of diamond drilling on the Corona property.  In order to exercise the El Chamizal Option Tectonic shall spend $200,000 in work expenditures in respect to the El Chamizal Property over a period of three (3) years or less and also issue a total of 150,000 shares of Tectonic to GNG over three (3) years or less. 25,000 shares to be issued on listing on a stock exchange, 50,000 shares on or before the date which is 12 months from the date of listing on a stock exchange and 75,000 shares on or before the date which is 24 months from listing on a stock exchange. Upon Tectonic earning its 60% interest in the El Chamizal Property, Tectonic shall thereafter have the further right and option to earn an additional 15% interest by completing a positive bankable feasibility study, as that term is generally defined in the mining industry, by December 31, 2017.

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On December 13, 2011, the Company announced that it has signed the final Earn-in and Shareholders Agreement with a Mexican subsidiary of Agnico-Eagle Mines Limited (“Agnico”) (NYSE: AEM) (TSX: AEM) for the exploration and development of the Company’s Las Bolas/Los Hilos property.  Under the terms of the agreement, which is subject to conditions, including TSX-V approval, Agnico’s Mexican subsidiary has the right to earn a 51% interest in the property by spending $5,000,000 on the property over a period of five years.  The first year’s work commitment is a firm commitment of $500,000 with expenditure requirements increasing each year thereafter.  Upon exercising its option, Agnico will have the right to earn an additional 20% interest by spending $4 million over another period of four years and completing a feasibility study or by spending $10 million over a longer period of eight years.  Agnico is Golden Goliath’s second largest shareholder, owning just over 9% of the Company’s stock and is also represented on the Company’s Board of Directors. Golden Goliath’s largest shareholder is Sprott Asset Management, which owns more than 19% of the Company’s stock.  The Las Bolas/Los Hilos property is located within the Uruachic mining camp, approximately 65 km south of Agnico’s Pinos Altos mine and about 170 km southeast of Grayd Resources’ India project. Grayd Resources is currently being acquired by Agnico.

Mineral Properties

The Company has a 100% interest in claims grouped into seven properties totaling 20,794 acres within the Uruachic Mining District.  The Company also owns two other significant properties outside of the Uruachic Camp.  One, La Cruz, is a silver property located on the eastern edge of the Sierra Madre Belt.  The other exploration property that Golden Goliath owns is Chamizal; this property differs from the others in that it is a lead, zinc, silver target and it lies outside of the Sierra Madre in central Chihuahua State.

Uruachic Mining Camp Properties

The Company acquired its 100% interest in the seven Uruachic Mining Camp properties and the Chamizal Property, partially as a result of a default on a promissory held by Golden Goliath from Minera Uruachic S.A. de C.V. (“Minera Uruachic”).  Minera Uruachic originally purchased certain claims from local residents.  Minera Uruachic is a related company to Golden Goliath in that it is controlled by J. Paul Sorbara, the President/Director of Golden Goliath and Daniel Nofrietta Fernandez, a Director of Golden Goliath.

The town of Uruachic is located in the northwestern part of Chihuahua State, some 60 kilometers south of the main highway connecting the cities of Chihuahua and Hermosillo, Sonora.  A secondary road leads from the highway to the waterfalls at Basaseachic and then continues south for a further 45 kilometers to Uruachic.  The geographic (Google Earth) coordinates for the town are: 27° 52’ 06” North and 108° 12’ 52” West.

The Uruachic district is located approximately 250 kilometers southwest of the city of Chihuahua.  The town of Uruachic of 1,000 people is located in the approximate center of the project area.  Access to the area is via a paved highway from the city of Chihuahua to Las Estrellas, then via a gravel road to the project area.  Total travel time from Chihuahua is about six hours.  Local services, such as gasoline and food, are available in Uruachic.  Power lines run from Las Estrellas to Uruachic.

The project area is located in the Sierra Madre Occidental mountain range, and elevations in the area are from 1000 meters to 2000 meters.  Topography is moderate to rugged.  During winter from November to January, the temperature can drop below freezing and snow and ice are common at the higher elevations.  During July and August, rain is very common and roads are often washed out.  Vegetation at lower elevations is tropical, while oak and pine forests cover higher elevations.

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The Uruachic mining camp is predominantly underlain by Tertiary volcanic rocks on the Lower Volcanic Complex, cut locally by small intrusive bodies.  These rocks are highly favorable for hosting gold and silver mineralization, with an estimated 90% of the precious metal mines in the Sierra Madre Occidental occurring within this package.  Throughout most of the Sierra Madre, the Lower Volcanic Sequence is covered by a thick layer of rhyolitic tuffaceous rocks of the Upper Volcanic Sequence, which prohibits the exploration of the favorable rocks underlying it.  In the Uruachic area, the Rio Oteros has eroded the overlying rhyolitic rocks and has left exposed a complete section through the Lower Volcanic suite.  It is in these highly altered rocks that the precious metal mineralization of the Uruachic camp is found.

The history of the Uruachic mining camp dates back to 1735 when two Spaniards searching for gold and silver founded the town in order to exploit the areas riches.  At that time the Town was named Real De Minas De Santa Rosa De Uruachic.  The town and the many mines surrounding it became very prosperous, eventually minting their own silver coins.   The prosperity continued until about the time of the Mexican Revolution in the early 1900’s.

Figure No. 3

Uruachic Mining Camp Map

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San Timoteo Property.  The San Timoteo property includes several claims, which total 793 hectares.  These are San Timoteo, San Timoteo II, Oro Leon, Las Trojas and Bufalo B.

La Reforma Property.  The La Reforma property comprises three claims totaling 987.4 hectares.  The claims are La reforma, La Lluvia and Bufalo A.

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Nueva Union Property.  The Nueva Union property has just one claim, called Nueva Union, which covers 211.89 hectares.

Los Hilos/Las Bolas Property.  The Las Bolas property comprises seven claims totaling 656.76 hectares: Los Hilos, Los Hilos II, Los Hilos II Frac.1, Mina de Las Bolas, Don Lazaro, El Manto, Ampliation La Verde.  In December 2011, the Company signed an Option Agreement with Agnico-Eagle Minerals Ltd., whereby they could acquire a 51% interest by expending $5,000,000 on the property over five years.  Upon exercising its option, Agnico will have the right to earn an additional 20% interest by spending $4 million over another period of four years and completing a feasibility study or by spending $10 million over a longer period of eight years.

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Nopalera Property.  The Nopalera property comprises three claims totaling 1,308.65 hectares; Nopalera, Nopalera II and La Flor Del Trigo.

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Oteros Property.  The Oteros property is comprised of three claims totaling 1,130.00 hectares: oteros, Esperanza and Bufalo R2.

Corona Property.  The Corona property consists of six claims that total 850 hectares (2,100 acres): Corona, Corona II, Corona III, Corona Norte, Corona Sur and La Esperanza. Corona along with the El Chamizal property have been optioned to Comstock Capital.  In May 2007 and amended October 2007 and June 2010, the Company optioned the Corona and El Chamizal properties to a company which undertook to spend $500,000 and $200,000 on the respective properties over a period of three years and issue 300,000 and 150,000 shares respectively to the Company over a period of three years from when the company lists its shares on a stock exchange.  Comstock Metals Ltd. listed on the TSX Venture Exchange in August 2011.  Once Comstock Capital has earned its interest a joint venture will be formed.

La Cruz Property

The Company acquired its 100% interest in the seven Uruachic Mining Camp properties and the Chamizal Property as a result of a default on a promissory held by Golden Goliath from Minera Uruachic S.A. de C.V. (“Minera Uruachic”).  Minera Uruachic originally purchased the claims from local residents.  Minera Uruachic is a related company to Golden Goliath in that it is controlled by J. Paul Sorbara, the President/Director of Golden Goliath and Daniel Nofrietta Fernandez, a Director of Golden Goliath.

The La Cruz property has one claim, called La Cruz covering 90.00 hectares which was staked by the Company in 2006.  Preliminary surface mapping was completed by Golden Goliath, along with underground mapping and sampling of some of the several old mine workings on the property.  The property gained the attention Pan American Silver, who conducted at least two property examinations.  La Cruz was then optioned to the Mexican subsidiary of Pan American.  An internal claim, called La Cruzada, was obtained directly by Pan American and was rolled into the agreement.

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Under the terms of the option agreement, Pan American Silver Corp’s Mexican subsidiary, Minera Corner Bay S.A. de C.V., has the right to earn a 60% interest in La Cruz by making cash payments totaling US$300,000 and spending US$450,000 on the property over a period of three years.  The property will consist of: the Company’s La Cruz Property; additional ground staked around the La Cruz Property; and the La Cruzada Property for which Pan American’s subsidiary already has an option.  Golden Goliath will be responsible for 25% of the costs associated with La Cruzada Property.  Upon Minera Corner Bay exercising its option, a 60/40 joint venture would proceed on the La Cruz and newly staked grounds, with Pan American having the right to earn an additional 15% by completing a feasibility study.  This agreement has since been terminated with the La Cruz property being returned to the Company.

The La Cruz Property, which is not in the Uruachic Camp, lies on the extreme eastern edge of the Sierra Madre Occidental.  The property hosts numerous old underground workings and dumps along a 1.5 kilometer trend.  The workings and extensive dumps are associated with two parallel, strongly silicified and brecciated structures separated by a distance of about 200 meters.  The structures strike Az 220º, dip 75º N, and average about two-meters to five-meters in width at the surface.  The workings, mostly shafts, appear to extend from 25-meters to 80-meters and preliminary mapping indicates that the structures widen at depth.  The main working area occurs on a hill that rises about 250 meters above the adjacent plains.  A principal working, adjacent to the mojonera, lies about 75 meters above the base of this hill and appears to be the lowest working level, and the top of the hill lies some 300 meters to the south.

The age of the workings is uncertain, but they are not recent and it appears that no drilling has ever been done on the ground.  A Company director first visited this property about 20 years ago and at that time asked a 70-year-old man who was born in the local village of Tajirachic about the mines.  The local replied that they were already closed down when he was a boy.  Subsequent claim owners (individuals, not companies) only worked the old dumps in a limited way.

Preliminary work by the Company’s geologists included taking 17 chip samples across widths ranging from 1.0 meters to 2.5 meters and averaging 1.75 meters.

Tertiary volcanic rocks underlie the La Cruz claim, with andesites being overlain by rhyolites and ignimbrites.  The rocks are intensely fractured and silicified with fracture fillings of grey quartz.  Silver sulphide mineralization is present along with iron and manganese oxides.  The fractures have predominant trends of north-south, Az 340 and Az 025 with vertical dips and the working following the northeast trend.   A breccia zone that is about 3.5 meters wide on surface characterizes the mineralized trend.  Preliminary examination of the old shafts has been conducted to a depth of 45 meters, but they appear to descend to about 80 meters.

The La Cruz property is located in the central part of Chihuahua State, approximately 1.5 hours drive south-southwest of the city of Cuauhtemoc, and has good road access to within a few kilometers of the property.  The road follows an arroyo for the last few kilometers, but this section can easily be rehabilitated.  Geographic coordinates for the mojonera are Latitude 28º 02’ 52.14” and Longitude 107º 09’ 56.94”.

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Chamizal Property

The Chamizal property consists of two claims, Chamizal Este and Chamizal Oeste, which cover an area of 689.00 hectares.

The Chamizal property, which is outside of the Uruachic camp and the Sierra Madre Occidental, has not had extensive exploration work to date.  Surface and underground mapping, as well as preliminary geochemical sampling has been conducted, but no geophysical surveys have been completed.  Chamizal along with the Corona property have been optioned to Comstock Capital.

In May 2007 and amended April 2011, the Company optioned the Corona and El Chamizal properties to a company which undertook to spend $500,000 and $200,000 on the respective properties over a period of three years and issue 400,000 (150,000 shares received) and 150,000 (25,000 shares received) shares respectively to the Company over a period of two years.  In order to keep the option in good standing, the optionee must also pay $50,000 (received) and issue 200,000 shares to the Company (received).    

The Chamizal Property is not in the Uruachic Camp.  This property is part of a potentially very important massive play located 85 kilometers south-southwest of the city of Chihuahua in central Chihuahua State.  This region hosts the famous Santa Eulalia and Naica mining districts which have carbonate hosted, massive Pb-Zn-Ag mineralization.  The Santa Eulalia district, located 90 kilometres northeast of Chamizal, has a mining history dating back to the late 1500's.  The Chamizal Property is underlain by the same limestone formation that hosts the mineralization at Santa Eulalia and Naica, and has old mine workings in both the northeast and southwest portion of the property.  The southwestern workings comprise two tunnels that total more than 400 meters in length and contain large stopes where replacement style Pb-Zn-Ag mineralization has been mined.  Despite the presence of two sizable adits with stopes and one shaft attesting to past mine production, there is no record of any drilling ever having been done on the Chamizal Property.

The Chamizal Property lies in central Chihuahua, approximately 80 kilometers west of the famous Naica Pb-Zn-Ag mine, and about 80 kilometers southwest of the famous Santa Eulalia Mine.

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ITEM 5.  OPERATING AND FINANCIAL REVIEW AND PROSPECTS

The following discussion for the fiscal years ended 8/31/2011, 8/31/2010, and 8/31/2009 should be read in conjunction with the financial statements of the Company and the notes thereto.

Selected Annual Data

	Year Ended August 31 2011	Year Ended August 31 2010	Year Ended August 31 2009
Sales Revenue	$0	$0	$0
Net Income (loss)	($1,021,160)	($1,412,984)	($2,196,183)
Basic and Diluted (loss) EPS	($0.01)	($0.02)	($0.04)
Weighted Avg. No. Shares Outstanding	85,749,549	72,302,874	60,934,037
Working Capital	$2,713,392	$1,808,507	$712,378
Mineral Property Interests	$8,981,467	$8,089,730	$7,342,303
Shareholders Equity	$11,848,681	$10,029,855	$8,156,342
Total Assets	$12,022,608	$10,232,227	$8,222,221

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Summary of Quarterly Results

Net (Loss)	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Fiscal 2011	($175,537)	($277,529)	($205,464)	($363,630)
Fiscal 2010	($186,412)	($262,720)	($689,696)	($274,156)
Fiscal 2009	($182,506)	($260,255)	($184,103)	($1,569,319)

EPS (Loss)	First Quarter	Second Quarter	Third Quarter	Fourth Quarter
Fiscal 2011	($0.01)	($0.01)	($0.00)	($0.01)
Fiscal 2010	($0.00)	($0.00)	($0.01)	($0.01)
Fiscal 2009	($0.00)	($0.00)	($0.00)	($0.04)

Exploration efforts are conducted year-round and administrative/general expenses are generally not seasonal.  The higher fourth quarter losses in Fiscal 2011 primarily related to year-end write downs of mineral property exploration costs of $118,769 compared to nil in the prior three quarter and $74,298 in 2010.  The higher fourth quarter losses in Fiscal 2009 primarily related to year-end write-downs of mineral properties.

Financings

In February 2010, the Company closed a non-brokered private placement of 7,080,000 units at a price of $0.15 per unit. Each unit consisted of one share and one half of one nontransferable share purchase warrant exercisable for a period of two years at a price of $0.25 for each warrant.  Once resale restrictions on the shares expired and upon the Company’s shares trading at or above a weighted average trading price of $0.40 for 20 consecutive trading days, the Company may give notice that the warrants will expire 30 days from the date of providing such notice.  The Company’s agents received a commission of $51,360 in cash and 342,400 agent’s warrants exercisable at $0.25 per share for two years valued at $36,670 (risk-free interest rate of 2.24%, dividend yield of Nil, volatility factor of 131.22%, an expected life of 2 years).

In January 2010, the Company closed a non-brokered private placement of 12,641,466 units at a price of $0.15 per unit. Each unit consisted of one share and one half of one nontransferable share purchase warrant exercisable for a period of two years at a price of $0.25 for each warrant.  Once resale restrictions on the shares expired and upon the Company’s shares trading at or above a weighted average trading price of $0.40 for 20 consecutive trading days, the Company may give notice that the warrants will expire 30 days from the date of providing such notice.  The Company’s agents received a commission of $112,500 in cash and 742,000 agent’s warrants exercisable at $0.25 per share for two years valued at $78,994 (risk-free interest rate of 2.24%, dividend yield of Nil, volatility factor of 130.38%, an expected life of 2 years).

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Fiscal 2011 Ended August 31, 2011 vs. Fiscal 2010

Golden Goliath is a Canadian listed public company with its shares traded on the TSX Venture Exchange under the symbol “GNG” as a Tier 2 company.

Golden Goliath is a junior exploration company with no revenues from mineral producing operations.  The Company’s properties are all located in the State of Chihuahua, Mexico.  Activities include acquiring mineral properties and conducting exploration programs.  The mineral exploration business is risky and most exploration projects will not become mines.  The Company may offer to a major mining company the opportunity to acquire an interest in a property in return for funding by the major mining company, of all or part of the exploration and development of the property. For the funding of property acquisitions and exploration that the Company conducts, the Company does not use long-term debt.  Rather, it depends on the issue of shares from the treasury to investors.  Such stock issues in turn depend on numerous factors, important among which are a positive mineral exploration climate, positive stock market conditions, a company’s track record and the experience of management.

Results from Operations

For the year ending August 31, 2011, the Company incurred a net loss $1,021,160 compared to $1,412,984 for Fiscal 2010.  In the fourth quarter the Company incurred a net loss of $362,630 compared to a net loss of $205,464 during the third.  The significant differences between these periods include:

a.

A write down of mineral property exploration costs of $118,769 in the fourth quarter of 2011 compared to nil in the prior three quarter and $74,298 in 2010.

b.

Stock based compensation fees were nil in 2011 compared to $492,137 in 2010.  The Company granted no stock options in Fiscal 2011.  While the Company granted the 2010 options at a premium to the market price, these charges are a result of mandatory accounting practices that require a calculation using the Black-Scholes option valuation model to expense stock options.  As volatility is one variable in the calculation of this non cash charge, the large volatility of junior mining stocks has resulted in a large value to be expensed for stock options.

c.

An increase in cash over last year is a result of the exercise of warrants early in Fiscal 2011 bringing in approximately $2.7 million.

d.

Revenue was higher in the fourth quarter of Fiscal 2011 due to the receipt of option payments totaling $55,843 consisting of cash and shares for the Corona and El Chamizal option agreements.

e.

Consulting fees increased $27,313 during this year compared to last year due to the Company retaining corporate development expertise.

f.

Professional fees, transfer agent fees and filing fees were all less this past year as a result of the costs associated with a private placement in Fiscal 2010.

g.

Wages and benefits were higher this year compared to last due to the hiring of local labor in Uruachic.

Liquidity and Capital Resources

As of August 31, 2011, deferred mineral property exploration costs totalled $8,646,694 compared to $7,754,997 at August 31, 2010. During the year, the Company incurred a total of $1,079,756 in exploration expenditures including $217,084 on assaying, $266,099 on drilling and $47,340 doing geology and mapping mainly on its Las Bolas/Los Hilos properties and Nopalera.  $377,349 of facilities and other in deferred exploration costs included such expenses as core boxes, rental of a core shack, water truck and other preparatory work for the drill program.

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The Company has financed its operations almost exclusively through the sale of its common shares to investors and will be required to continue to do so for the foreseeable future.  The Company had working capital of $2,713,392 at August 31, 2011 compared to $1,808,507 at August 31, 2010.  The Company’s cash and short-term investment position at August 31, 2011 was $2,736,606.  During Fiscal 2011, 10,885,942 warrants from a Fiscal 2010 private placement were exercised, raising $2,721,486.

Cash Used by Fiscal 2011 Operating Activities totaled ($886,053), including the ($1,011,785) Net Loss.  Significant adjustments included: $118,769 writedown of mineral properties and ($19,091) in changes in non-cash working capital balances related to operations”.  Cash Used by Fiscal 2011 Investing Activities was ($1,925,203), including: ($3,800,000) paid for “purchase of short-term investments”; $3,000,000 received from “redemption of short-term investments); and ($1,100,965) paid for “expenditures on mineral properties”.  Cash provided from Fiscal 2011 Financing Activities was $2,839,986, primarily from the aforementioned exercise of warrants and stock options.

Fiscal 2010 Ended August 31, 2010 vs. Fiscal 2009

Results from Operations

For Fiscal 2010 ended August 31, 2010, the Company incurred a net loss ($1,412,984) compared to ($2,196,183) for Fiscal 2009.  The significant differences between these periods include:

a.

A write down of mineral property exploration costs of ($74,298) in Fiscal 2010 compared to ($1,435,660) in FY2009 (in the fourth quarter).  A large exploration program in 2008 and into 2009 allowed the Company to better evaluate several of its mineral properties.  Results at Reforma were disappointing and while the Company intends to maintain its interest in Reforma as there are still several interesting untested target areas, the Company wrote down its past exploration expenditures based on these results.  Whereas in 2010, the Company mainly focused on its Las Bolas and Los Hilos properties and with encouraging results and the option and joint venture with Agnico-Eagle, the Company believes significant potential exists for these properties.

b.

Stock based compensation fees were $492,137 in 2010 compared to $57,507 in 2009.  The Company granted a number of options in the third quarter this past year while only a few options were granted for the entire FY2009.  While the Company granted the options at a premium to the market price, these charges are a result of mandatory accounting practices which require a calculation using the Black-Scholes option valuation model to expense stock options.  As volatility is one variable in the calculation of this non cash charge, the large volatility of junior mining stocks has resulted in a large value to be expensed for stock options.

c.

A significant increase in cash over last year is a result of the completion of a private placement during the second quarter raising almost $3 million.

d.

Foreign exchange expenses have been reduced significantly this year from last due to the strengthening value of the Canadian dollar against the Mexican peso.

e.

Consulting fees increased $96,269 during the past year compared to last year due to the Company retaining corporate development expertise. The fees were higher in the first quarter this year also compared to other quarters due to the costs associated with the completion of the Company’s NI 43-101 technical report.

f.

Professional fees, transfer agent fees and filing fees were all higher this past year as a result of the costs associated with the private placement.

g.

Wages and benefits were higher this year compared to last due to a larger exploration program this past year compared to last.

Net Loss per Share for FY2010 was ($0.02) per share compared with ($0.04).

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Liquidity and Capital Resources

As of August 31, 2010, deferred mineral property exploration costs totalled $7,754,997 compared to $7,007,530 at August 31, 2009.  During the year, the Company incurred a total of $821,765 in exploration expenditures including $133,373 on assaying, $135,984 on drilling and $110,343 doing geology and mapping mainly on its Las Bolas/Los Hilos properties. $287,201 of facilities and other in deferred exploration costs included such expenses as core boxes, rental of a core shack and other preparatory work for the drill program.

The Company has financed its operations almost exclusively through the sale of its common shares to investors and will be required to continue to do so for the foreseeable future.  The Company had working capital of $1,808,507 at August 31, 2010 compared to $712,378 at August 31, 2009.  The Company’s cash and short-term investment position at August 31, 2010 was $1,896,644.  In January and February 2010 the Company completed a private placement of 19,721,466 units at a price of $0.15 per unit for gross proceeds of $2,958,220. Each unit consisted of one common share and one half of one share purchase with each whole warrant entitling the holder to purchase one additional common share for a period of two years at a price of $0.25.  Once resale restrictions on the shares have expired and upon the Company’s shares trading at or above a weighted average trading price of $0.40 for 20 consecutive trading days, the Company may give notice that the warrants will expire 30 days from the date of providing such notice (in writing to warrant holders and via a news release). Total finder’s fees of $163,860 were paid and 1,084,400 agent’s warrants having the same terms as the warrants under the units was paid.

Cash Used by Fiscal 2010 Operating Activities totaled ($710,084), including the ($1,412,984) Net Loss.  Significant adjustments included: $74,298 writedown of the Oteros< La Hermosa Las Trojas and La Gloria Properties; $492,137 in stock-based compensation; and $114,449 in changes in non-cash working capital balances related to operations”.  Cash Used by Fiscal 2010 Investing Activities was ($2,007,413), including: ($2,500,000) paid for “purchase of short-term investments”; $1,255,000 received from “redemption of short-term investments); and ($716,037) paid for “expenditures on mineral properties”.  Cash provided from Fiscal 2010 Financing Activities was $2,794,360, primarily from the aforementioned private placements.

Fiscal 2009 Ended August 31, 2009 vs. Fiscal 2008

Results from Operations

For Fiscal 2009, the Company incurred a net loss of ($2,196,183) compared to a net loss of ($821,077) during the prior year.  The significant differences between the two years were:

a.

a writedown of mineral property exploration costs of $1,435,660 in FY2009 compared to nil the prior year.  As a result of the large exploration program in 2008 and into 2009 the Company was better able to evaluate its mineral properties.  Results at La Reforma were disappointing and while the Company intends to maintain its interest in La Reforma as there are still several interesting untested target areas, the Company wrote down its past exploration expenditures based on these results.

b.

a decrease of $191,490 in interest income in FY2009 compared to FY2008 due to both lower interest rates and reduced capital earning interest as the Company financed its exploration activities.

c.

an increase of $52,945 in foreign exchange expense due to the decrease in value of the Canadian dollar against the Mexican peso.

d.

stock-based compensation charge of $57,507 in FY2009 compared to $122,780 in the prior year which are non-cash based charges and are a result of accounting practices which require a calculation using the Black-Scholes option valuation model to expense stock options.  The lower charges the prior year was a result of issuing less options during that year.

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e.

a decrease of $138,575 in investor relations expenses during FY2009 as the Company sought to reduce expenses in FY2009 due to difficult market conditions.

f.

a decrease of $25,948 in transfer agent and filing fees as the Company completed a private placement in the prior year which resulted in various one time fees.

g.

a reduction of $2,130,185 in current assets as the Company was completing an aggressive exploration program during the past year reducing the Company’s cash position.

Net Loss per Share for FY2009 was ($0.04) per share compared with ($0.01).

Liquidity and Capital Resources

As of 8/31/2009, deferred mineral property exploration costs totaled $7,007,530 compared to $7,449,608 at 8/31/2008. During the year, the Company incurred a total of $993,581 in exploration expenditures including $434,750 on drilling, $152,409 on assaying, $92,464 doing geology and mapping and $41,228 on road construction and site preparation, mainly on its Las Bolas property.  $193,175 of facilities and other exploration expenditures in deferred exploration costs included such expenses as core boxes, rental of a core shack and a water truck used during drilling.

At 8/31/2009, the Company had working capital of $712,378 compared to its 8/31/2008 working capital of $2,427,739. There was a reduction in cash and short-term investments as the Company was working on an aggressive exploration program during the past year.  The Company completed no financings during FY2009; but, raised $3.75 million in December 2009.  The Company is able to meet its ongoing financial obligations at this time.

Cash Used by Fiscal 2009 Operating Activities totaled ($721,124), including the ($2,196,183) Net Loss.  Significant adjustments included: $1,435,660 writedown of the La Reforma Property; $57,507 in stock-based compensation; and ($37,570) in changes in non-cash working capital balances related to operations”.  Cash Provided in Fiscal 2009 Investing Activities was $771,074, including: $2,153,945 from “redemption of short-term investments”; and ($1,365,900) for “expenditures on mineral properties”.  Cash provided from Fiscal 2008 Financing Activities was $nil.

5.C.  Research and Development, Patents and Licenses, Trademarks, etc.

5.D.  Trend Information

No Disclosure Necessary.

5.E.  Off-Balance Sheet Arrangements

At 8/31/2011 and 8/31/2010, the Company had no off-balance sheet arrangements.

5.F.  Tabular disclosure of contractual obligations

The Company has no “hard” contractual obligations at 01/31/2012.  However, under certain of its property acquisition agreements, the Company is committed to expend funds on exploration and/or make cash option payments and/or issue common shares to maintain or complete its option arrangements.  The Company is required to pay approximately $60,000 in taxes each year to the Mexican government for its mineral exploration properties.

5.G.  Safe harbor.

      --- No Disclosure Necessary ---

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ITEM 6.  DIRECTORS, SENIOR MANAGEMENT, AND EMPLOYEES

6.A.  Directors and Senior Management

Table No. 3 Directors and Senior Management January 31, 2012
Name	Positions	Age	Date First Elected or Appointed
Ing. Daniel N. Fernandez (2)	Director	70	June 1998
Richard W. Hughes	Director	78	June 1998
Robin Bruce Hutchison	Director	55	December 2000
Marc Legault	Director	51	January 2006
Stephen Pearce (1)(3)	Director/CFO/Secretary	41	December 2000
Andrew Robertson (1)	Director	67	December 1998
Edward K. Sorbara (1)	Director	67	June 1998
J. Paul Sorbara (2)	Director/CEO/President	58	February 1997
(1)  Member of Audit Committee.
(2)  He spends full time on the affairs of the Company.
(3)  He spends about a fourth of his time on the affairs of the Company.

Daniel Nofrietta Fernandez was graduated with a degree in engineering from the Universidad Autonoma De Mexico in 1965.  In 1969, he attended the University of Arizona, studying geology.  He has been the President and a Director of Minera Uruachic S.A. de C.V. since 1999.   He has been Manager and a Director of the Company’s wholly-owned subsidiary, Minera Delta S.A. de C.V. since 1992.  As an independent director of the Company, Mr. Fernandez supervises management and helps to ensure compliance with corporate governance policies and standards.

Richard W. Hughes has been the President of Hastings Management Corp. since 1967; Hastings Management is a private company owned by Mr. Hughes that assists Canadian public companies with capital formation, management and investor relations.  As an independent director, Mr. Hughes supervises management and helps to ensure compliance with corporate governance policies and standards. He currently is associated with the following public companies:

Position	Issuer	Exchange	Since
Director/President	Abitibi Mining Corp.	NEX	1983
Director	Amador Gold Corp.	TSX.V	2002
Director	Fortune River Resources Corp.	TSX.V	2002
Director	Genco Resources Ltd.	TSX.V	2004
Director	Klondike Gold Corp.	TSX.V	1985
Director	Klondike Silver Corp.	TSX.V	2005
Director	Kootenay Gold Inc.	TSX.V	2005
Director	Tiomin Resources Inc.	TSX.V	1997
Director/President	Sedex Mining Corp.	TSX.V	1980
Director/President	Zinccorp Resources Inc.	TSX.V	2008

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Robin Bruce Hutchison was graduated from the University of British Columbia with a Bachelor of Science Degree in 1978. A co-founder of eCharge Corporation (www.echarge.com), he held numerous position within eCharge including, President and Chief Technical Officer.  Prior to co-founding eCharge Corporation, he was President of SNI Corporation, which specialized in the integration of SUN Microsystems UNIX based systems and Internet & Firewall Security.  As an independent director of the Company, Mr. Hutchinson supervises management and helps to ensure compliance with corporate governance policies and standards.

Marc Legault, with Agnico-Eagle Mines Ltd. since 1988, is manager of project evaluations in Toronto.  He is currently managing the exploration and evaluation program at Agnico’s Pinos Altos project in Chihuahua and is also directly involved in evaluating other exploration and mining opportunities in Mexico.  As an independent director of the Company, Mr. Legault supervises management and helps to ensure compliance with corporate governance policies and standards.

Stephen Pearce has been the Corporate Secretary of the Company since 12/11/2000 and CFO and a Director of the Company since 1/26/2006.  He was graduated from York University in 1993 with a degree in Economics.  He received his law degree from the University of British Columbia in 1996.  He is an attorney specializing in junior mining companies. Mr. Pearce serves as a Director and/or Corporate Secretary of the following TSX Venture Exchange listed companies: Neodym Technologies Inc. (since 2001); and Sable Resources Ltd. (since 2003), Sunorca Development Corporation (since 2008).  As a director of the Company, Mr. Pearce participates in management oversight and helps to ensure compliance with our corporate governance policies and standards.

Dr. Andrew Robertson received his Doctorate and Bachelor of Science Degrees from the University of Witwatersrand in the Republic of South Africa.  He holds the designation of Professional Engineer that was awarded to him from both the Association of Professional Engineers & Geoscientists of British Columbia and the Association of Professional Engineers of Ontario.  Since April 1994, Robertson Geoconsultants Inc., a company he owns, has employed him; through this company he provides consulting services to mining companies. Since April 1994, he has been a Director of Gemcom Software International Inc. He has been President/Director of InfoMine Inc. since 1984.  As an independent director of the Company, Mr. Robertson supervises management and helps to ensure compliance with corporate governance policies and standards.

Edward K. Sorbara received his Bachelors Degree in Commerce from the University of Toronto in 1964 and his MBA from the University of Chicago in 1967.  He has been employed by Sorbara Services Ltd. as Principal since 1967. Sorbara Services Ltd. is involved in the real estate industry in Toronto as developers.  As an independent director of the Company, Mr. Sorbara supervises management and helps to ensure compliance with corporate governance policies and standards.

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J. Paul Sorbara has been the President and CEO of the Company since 2/5/1997 and a Director of the Company since 5/10/1998.  He is a graduate of the University of Toronto where he received a Bachelor of Science Degree in 1976 and a Master of Science Degree in 1979.  He received the designation of Professional Geologist in 1991 from the Association of Professional Engineers and Geoscientists in British Columbia; and in 1985 the Geological Association of Canada awarded him the designation of Fellow of the Geological Association of Canada.  He also serves as the President of Minera Delta S.A. de C.V., a wholly owned subsidiary of Golden Goliath.  He owns a consulting firm, Sorbara Geological Consulting Ltd., but devotes very little time to that company. Since January 2004, he has been a Director of Greenlight Resources Inc. Since August 2007, he has been a Director of Jiulian Resources Inc. and a director of New High Ridge Resources since 2010.  He devotes full time to his duties as the President of the Company.  As a director of the Company, Mr. Sorbara participates in management oversight and helps to ensure compliance with our corporate governance policies and standards.

The Directors have served in their respective capacities since their election and/or appointment and will serve until the next Annual General Meeting or until a successor is duly elected, unless the office is vacated in accordance with the Articles of the Company.  Their functions within the Company are detailed in ITEM #1.A.1.

The Senior Management serves at the pleasure of the Board of Directors.  Their functions within the Company are detailed in ITEM #1.A.2.

The Board has adopted a written Code of Business Ethics.  The Board of Directors expects management to operate the business of the Company in a manner that enhances shareholder value and is consistent with the highest level of integrity.  Management is expected to execute the Company’s business plan and to meet performance objectives and goals.  In addition, the Board of Directors must comply with conflict of interest provisions in Canadian corporate law, including relevant securities regulatory instruments, in order to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.

During the last five years, no Director and/or Senior Management has been the subject of any order, judgment, or decree of any governmental agency or administrator or of any court or competent jurisdiction, revoking or suspending for cause any license, permit or other authority of such person or of any corporation of which he is a Director and/or Senior Management, to engage in the securities business or in the sale of a particular security or temporarily or permanently restraining or enjoining any such person or any corporation of which he is an officer or director from engaging in or continuing any conduct/practice/employment in connection with the purchase or sale of securities, or convicting such person of any felony or misdemeanor involving a security or any aspect of the securities business or of theft or of any felony.

Edward Sorbara, Director, is the cousin of J. Paul Sorbara, President/Director of the Company.  There are no other family relationships between any Directors or Senior Management.  There are no arrangements or understandings with major shareholders, customers, suppliers or others, pursuant to which any person referred to above was selected as a Director or member of senior management.

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6.B.  Compensation

Director Compensation

The Company has no formal program for compensating Directors for their service as directors.  There are no Director service contracts with the Company providing for benefits upon termination of employment.  Directors are entitled to reimbursement for reasonable travel and other out-of-pocket expenses incurred in connection with attendance at meetings of the Board of Directors.  The Board of Directors may award special remuneration to any Director undertaking any special services on behalf of the Company other than services ordinarily required of a Director.  The Company’s directors also participate in the Company’s Stock Option Plan; during Fiscal 2011, no stock options were granted to Directors.   No Director received any compensation for his services as a Director, including committee participation and/or special assignments, other than detailed in the following table which details Director (Richard Hughes) compensation paid/accrued for Fiscal 2011.

Senior Management Compensation

Total cash compensation accrued and/or paid (directly and/or indirectly) (refer to ITEM #7B for information regarding indirect payments) to all Senior Management/Directors during Fiscal 2011 was $263,767.  The following table details Senior Management/Director compensation paid/accrued for Fiscal 2011.

Table No. 4
Director and Senior Management Compensation
Name and principal position	Year	Salary	Share-based awards	Option-based awards	Non-equity incentive plan compensation		Pension value	All other compensation	Total compensation(3)
					Annual incentive plans	Long-term incentive plans
J. Paul Sorbara, CEO/ President (1)	2011	$120,000	NA	NA	NA	NA	NA	NA	$120,000
Stephen Pearce, CFO/Secretary	2011	$60,000	NA	NA	NA	NA	NA	NA	$60,000
Daniel Fernandez Manager of Minera Delta S.A.	2011	$41,188	NA	NA	NA	NA	NA	NA	$41,188
Richard Hughes, Director (2)	2011	NA	NA	NA	NA	NA	NA	$42,579	$42,579
(1) Mr. Sorbara’s “salary” is paid to Sorbara Geological Consulting Ltd., private company owned/controlled by him.
(2) Mr. Hughes’s “All Other Compensation” is paid to Hastings Management Corp., a company wholly owned by him; pursuant to administrative services provided to the Company including providing office space, office furniture, boardroom facilities, access to photocopier, fax and such other amenities normally associated with executive offices.
(3) During the Senior Management’s employment, the Company reimburses Senior Management for all travel and other expenses actually, properly and necessarily incurred by the NEO in connection with the Senior Management’s duties in accordance with the policies set from time to time by the Company, in its sole discretion.  The Senior Management is required to furnish such receipts, vouchers or other evidence as are required by the Company to substantiate such expenses.  Such reimbursements are excluded from the “Total Compensation”.

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Options/SARs Granted/Cancelled During The Most Recently Completed Fiscal Year

At the beginning of Fiscal 2011, the most recently completed fiscal year; there were 7,425,000 stock options outstanding.  During Fiscal 2011, no stock options were granted to Senior Management, Directors, and employees/ consultants; all stock options vested upon granting.  During Fiscal 2011, no SARs (stock appreciation rights) were granted.  During Fiscal 2011: 675,000 stock options were exercised; 2,050,000 expired; and none were re-priced.

Table No. 5
Stock Option Grants in Fiscal 2011 Ended 8/31/2011
Name	Number of Options Granted	Percent Of Total Options Granted	Exercise Price per Share	Grant Date	Expiration Date	Mkt. Value of Securities Underlying Options on Date of Grant
Daniel Fernandez	Nil
Richard Hughes	Nil
Robin Hutchison	Nil
Marc Legault	Nil
Stephen Pearce	Nil
Andrew Robertson	Nil
Edward Sorbara	Nil
J. Paul Sorbara	Nil
Management/Directors	Nil
Employees/Consultants	Nil
TOTAL	Nil

- 49 –

Options/SARs Exercised During The Most Recently Completed Fiscal Year

During Fiscal 2011 Ended 8/31/2011, the most recently completed fiscal year, no stock options were exercised by Senior Management and/or Directors.  No SARs (stock appreciation rights) were exercised during this period.

The following table gives certain information concerning stock option exercises during Fiscal 2011 by the Company’s Senior Management and Directors.  It also gives information concerning stock option values.

Table No. 6
Aggregated Stock Options Exercises in Fiscal 2011 Fiscal Yearend Unexercised Stock Options Fiscal Yearend Stock Option Values Senior Management/Directors
Name	Number of Shares Acquired on Exercise	Aggregate Value Realized (1)	Number of Unexercised Options at Fiscal Yearend Exercisable/ Unexercisable	Value of Unexercised In-the-Money Options at Fiscal Yearend (2) Exercisable/ Unexercisable
Ing. Daniel N. Fernandez	50,000	$20,000	400,000/nil	$29,250/$nil
Richard W. Hughes	Nil	Nil	325,000/nil	$36,750/$nil
Robin Hutchison	Nil	Nil	300,000/nil	$29,750/$nil
Marc Legault	Nil	Nil	175,000/nil	$13,500/$nil
Stephen Pearce	Nil	Nil	450,000/nil	$43,750/$nil
Andrew Robertson	Nil	Nil	250,000/nil	$23,250/$nil
Edward K. Sorbara	Nil	Nil	250,000/nil	$30,250/$nil
J. Paul Sorbara	Nil	Nil	1,200,000/nil	$191,000/$nil
(1) Value using the closing price of common shares of the Company on the TSX Venture Exchange on the date of exercise, less the exercise price per share.
(2) The market price for the Company’s common shares on 8/31/2011 was $0.38.   No value has been given to unexercised options that were out-of-the-money on 8/31/2011.

Stock Options.  The Company may grant stock options to Directors, Senior Management and employees.  Refer to ITEM #6.E., “Share Ownership” and Tables No. 4/5/6/7/8 for information about stock options.

Change of Control Remuneration.  The Company has no plans or arrangements in respect of remuneration received or that may be received by Senior Management of the Company in Fiscal 2011 to compensate such officers in the event of termination of employment (as a result of resignation, retirement, change of control) or a change of responsibilities following a change of control, where the value of such compensation exceeds US$100,000 per Senior Management.

Bonus/Profit Sharing/Non-Cash Compensation.  The Company has no Bonus/Profit Sharing/Non-Cash Compensation arrangements.

Pension/Retirement Benefits.  No funds have been set aside or accrued by the Company since incorporation to provide pension, retirement or similar benefits for Directors or Senior Management.

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Other Compensation.  No Senior Management and/or Director received “other compensation” in excess of the lesser of US$25,000 or 10% of such officer's cash compensation, and all Senior Management/Directors as a group did not receive other compensation which exceeded US$25,000 times the number of persons in the group or 10% of the compensation, other than disclosed in Table No. 4/5/6/7/8, ITEM #6B and ITEM #7B.

Written Management Agreements

The Company has retained Mr. Hughes through Hastings Management Corp., a company wholly owned by him. Pursuant to administrative services provided to the Company including providing office space, office furniture, boardroom facilities, access to photocopier, fax and such other amenities normally associated with executive offices. Currently, he is paid approximately $3,500 per month.  The contract is on a month-to-month basis and can be terminated by either party with one month’s written notice.   

6.C.  Board Practices

All directors hold office until the next meeting of the shareholders of the Company unless they resign or are removed in accordance with the Company’s Articles.  Senior Management are appointed to serve at the discretion of the Board of Directors.  The Board of Directors and Committees of the Board schedule regular meetings over the course of the year.

The fundamental objective of the Board is to ensure that it operates in a fashion that maximizes shareholder value over the long term.  The Board’s duties and responsibilities are all carried out in a manner consistent with that fundamental objective.   The principal duty and responsibility of the Board is to oversee the management and operations of the Company, with the day-to-day management of the business and affairs of the Company delegated by the Board to the President/CEO and other Senior Management.

The Board’s responsibilities include overseeing the conduct of the Company’s business, providing leadership and direction to its management, and setting policies.  Strategic direction for the Company is developed through the Board’s annual planning process.  Through this process, the Board adopts the operating plan for the coming year, and monitors management’s progress relative to that plan through a regular reporting and review process.

The Board has delegated to the President/CEO and other Senior Management responsibility for the day-to-day management of the business of the Company.  Matters of policy and issues outside the normal course of business are brought before the Board for its review and approval, along with all matters dictated by statute and legislation requiring Board review and approval.  The President/CEO and other Senior Management review the Company’s progress in relation to the current operating plan at in-person and telephone-conference Board meetings.  The Board meets on a regular basis with and without management present.  Financial, operational and strategic issues facing the Company are reviewed, monitored and approved at the Board meetings.

6.C.1.  Terms of Office.  Refer to ITEM 6.A and ITEM 6.C.

6.C.2.  Directors’ Service Contracts.  No Disclosure Necessary

6.C.3.  Board Independence

The Board of Directors has adopted standards for determining whether a director is independent from management.  The Board reviews, consistent with the Company’s corporate governance guidelines, whether a director has any material relationship with the Company that would impair the director’s independent judgment.  The Board of Directors has affirmatively determined, based on its standards, that the Messrs. Richard Hughes, Robert Hutchinson, Marc Legault, Andrew Robertson, and Edward Sorbara are independent.

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6.C.4.  Board meetings and committees; annual meeting attendance

During Fiscal 2011, the Board of Directors held one scheduled meeting.  For various reasons, Board members may not be able to attend a Board meeting; all Board members are provided information related to each of the agenda items before each meeting, and, therefore, can provide counsel outside the confines of regularly scheduled meetings.  No director attended fewer than 75% of the aggregate of: (1) the total number of meetings of the Board of Directors, while he was a Director; and (2) the total number of meetings of committees of the Board of Directors on which the director served. Directors are encouraged to attend annual meetings of our stockholder; all but Marc Legault, Robin Hutchinson and Andrew Robinson of the directors attended the February 2011 annual shareholders meeting.

The Company has an Audit Committee, which recommends to the Board of Directors the engagement of the independent auditors of the Company and reviews with the independent auditors the scope and results of the Company’s audits, the Company’s internal accounting controls, and the professional services furnished by the independent auditors to the Company.  The Company has an Audit Committee charter, adopted 9/1/2006.  The current members of the Audit Committee are: Stephen Pearce, Andrew Robertson (independent), and Edward Sorbara (independent).  The Audit Committee met once during Fiscal 2011 and has met once during Fiscal 2012-to-date but regularly communicate informally throughout the year.

The Company does not have an “audit committee financial expert” serving on its Audit Committee.  The Company’s Audit Committee consists of two independent directors and the CFO/Secretary/Director, all of whom are both financially literate and very knowledgeable about the Company’s affairs.  Because the Company’s structure and operations are straightforward, the Company does not find it necessary to augment its Board with a financial expert.

6.C.5.  Code of Ethics

The Board has not adopted a written Code of Business Ethics.  However, the Board of Directors expects management to operate the business of the Company in a manner that enhances shareholder value and is consistent with the highest level of integrity.  Management is expected to execute the Company’s business plan and to meet performance objectives and goals.  In addition, the Board of Directors must comply with conflict of interest provisions in Canadian corporate law, including relevant securities regulatory instruments, in order to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.  During Fiscal 2009 and Fiscal 2010-to-date, there are no material change reports relating to the conduct of any Directors or executive officers of the Company.

6.D.  Employees

As of 01/31/2012, the Company had fourteen full-time employees and several part-time employees/consultants, including the Senior Management; ten of these employees are directly engaged in mineral exploration/development.  As of 8/31/2011 and 8/31/2010, the Company had fourteen and eight employees, respectively, including the Senior Management. None of the Company's employees are covered by collective bargaining agreements.

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6.E.  Share Ownership

The following table lists Directors and Senior Management who beneficially own the Company's voting securities, consisting solely of common shares, and the amount of the Company's voting securities owned by the Directors and Senior Management as a group.  The table also includes all persons/companies where the Company is aware that they have 5% or greater beneficial interest in the Company’s voting securities.

Table No. 7 Shareholdings of Directors and Senior Management Shareholdings of 5% Shareholders January 31, 2012
Title of Class	Name of Beneficial Owner	Amount and Nature of Beneficial Ownership	Percent of Class
Common	Sprott Asset Management (1)	11,329,878	12.3%
Common	Agnico Eagle Mines Limited (2)	6,762,000	7.3%
	5% Shareholder Subtotal	18,091,878	19.6%
Common	J. Paul Sorbara (3)	2,599,970	2.8%
Common	Daniel Fernandez (4)	2,067,000	2.2%
Common	Edward Sorbara (5)	861,625	0.9%
Common	Richard Hughes (6)	765,000	0.8%
Common	Andrew Robertson (7)	701,000	0.8%
Common	Stephen Pearce (8)	1,050,000	1.1%
Common	Robin Hutchison (9)	500,000	0.5%
Common	Marc Legault (10)	500,000	0.5%
	Directors and Senior Management Subtotal	9,044,595	9.6%
	TOTAL	27,136,473	29.2%

(1)

Sprott Asset Management is a financial institution.

Their address is:  200 Bay Street, Toronto, Ontario, Canada  M5J 2J1

The contact person is: Eric Sprott.

(2)

Agnico Eagle Mines Limited is a Canadian mining company publicly traded on the NYSE and TSX Exchange.  

Their address is: 145 King Street East, Toronto, Ontario, M5C 2Y7.  The contact person is:

David Smith; VP, Investor Relations.

(3)  

1,700,000 represent currently exercisable stock options.

855,500 common shares and 750,000 stock options are held indirectly through

Sorbara Geological Consulting Limited, a private company controlled by Mr. Sorbara.

(4)

1,000,000 represent currently exercisable stock options.

(5)

500,000 represent currently exercisable stock options.

(6)

500,000 represent currently exercisable stock options.

(7)

500,000 represent currently exercisable stock options.

500,000 common shares are registered in the name of

A. MacG. Robertson & Associates Inc. and A. MacG. Holdings Inc., of which

Andrew MacG. Robertson is the sole owner of all issued voting shares.

(8)

1,000,000 represent currently exercisable stock options.

(9)

500,000 represent currently exercisable stock options.

(10)

500,000 represent currently exercisable stock options.

#  Based on 92,216,445 common shares outstanding at 01/31/2012, and warrants and stock options held by each beneficial holder exercisable within sixty days.

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Stock Options

Incentive stock options are granted by the Company in accordance with the rules and policies of the TSX Venture Exchange, the Business Corporations Act (British Columbia), including the number of common shares under option, the exercise price and expiry date of such options, and any amendments thereto.  The Company adopted its current formal written stock option plan (the “Stock Option Plan”) on 2/5/2006 and it is renewed annually at the Company’s shareholder meeting each year.

The principal purposes of the Company’s stock option program are to (a) promote a proprietary interest in the Company among the officers, directors and employees of the Company and its affiliates, (b) retain and attract the qualified officers, directors and employees the Company requires, (c) provide a long-term incentive element in overall compensation, and (d) promote the long-term profitability of the Company.

Under the Stock Option Plan, the Company’s board of directors (the “Board”) may, from time to time, designate a director or other senior officer or employee of the Company as administrator (the “Administrator”) for the purposes of administering the Plan.  Currently, the Administrator is the Corporate Secretary.

The principal purposes of the Company’s stock option program are to (a) promote a proprietary interest in the Company among the officers, directors and employees of the Company and its affiliates, (b) retain and attract the qualified officers, directors and employees the Company requires, (c) provide a long-term incentive element in overall compensation, and (d) promote the long-term profitability of the Company.

The Stock Option Plan provides that stock options may be granted to directors, senior officers, employees and consultants of the Company (and any subsidiary of the Company) and management-company employees.  For the purposes of the Stock Option Plan, the terms “employees”, “consultants” and “management company employees” have the meanings set out in TSX Venture Exchange Policy 4.4.  In addition, the term “director” is defined in TSX Venture Exchange Policy Manual section 4.4 to include directors, senior officers and management company employees.

The Stock Option Plan provides for the issuance of stock options to acquire at any time up to a maximum of 10% of the issued and outstanding common shares of the Company (subject to standard anti-dilution adjustments).  If a stock option expires or otherwise terminates for any reason without having been exercised in full, the number of common shares reserved for issuance under that expired or terminated stock option shall again be available for the purposes of the Stock Option Plan.  Any stock option outstanding when the Stock Option Plan is terminated will remain in effect until it is exercised or it expires.  The Stock Option Plan provides that it is solely within the discretion of the Board to determine who should receive stock options and in what amounts, subject to the following conditions:

(a)

options will be non-assignable and non-transferable except that they will be exercisable by the personal representative of the option holder in the event of the option holder’s death;

(b)

options may be exercisable for a maximum of five years from grant date;

(c)

options to acquire no more than 5% of the issued shares of the Company may be granted to any one individual in any twelve-month period;

(d)

options to acquire no more than 2% of the issued shares of the Company may be granted to any one consultant in any twelve-month period;

(e)

options to acquire no more than an aggregate of 2% of the issued shares of the Company may be granted to an employee conducting investor relations activities (as defined in TSX Venture Exchange Policy 1.1), in any twelve-month period;

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(f)

options held by an option holder who is a director, employee, consultant or management company employee must expire within 90 days after the option holder ceases to be a director, employee, consultant or management company employee;

(g)

options held by an option holder who is engaged in investor relations activities must expire within 30 days after the option holder ceases to be employed by the Company to provide investor relations activities; and

(h)

in the event of an option holder’s death, the option holder’s personal representative may exercise any portion of the option holder’s vested outstanding options for one year following the option holder’s death.

The names and titles of the Directors/Senior Management of the Company to whom outstanding stock options have been granted and the number of common shares subject to such options are set forth in following table, as well as the number of options granted to Directors/Senior Management, and all employees and consultants as a group.

Table No. 8 Stock Options Outstanding January 31, 2012
	Number of Options	Exercise Price	Date Granted	Expiration Date
J. Paul Sorbara	450,000	$0.10	12/8/2008	12/7/2013
	250,000	$0.40	7/16/2006	7/16/2012
	500,000	$0.25	5/7/2010	5/7/2015
	500,000	$0.25	12/21/2011	12/21/2016
Stephen Pearce	75,000	$0.10	12/8/2008	12/7/2013
	150,000	$0.40	7/16/2006	7/16/2012
	225,000	$0.25	5/7/2010	5/7/2015
	550,000	$0.25	12/21/2011	12/21/2016
Daniel Fernandez	50,000	$0.10	12/8/2008	12/7/2013
	175,000	$0.40	7/16/2006	7/16/2012
	225,000	$0.25	5/7/2010	5/7/2015
	600,000	$0.25	12/21/2011	12/21/2016
Richard Hughes	50,000	$0.10	12/8/2008	12/7/2013
	100,000	$0.40	7/16/2006	7/16/2012
	125,000	$0.36	6/29/2006	6/29/2011
	175,000	$0.25	5/7/2010	5/7/2015
	175,000	$0.25	12/21/2011	12/21/2016
Robin Hutchison	25,000	$0.10	12/8/2008	12/7/2013
	100,000	$0.40	7/16/2006	7/16/2012
	175,000	$0.25	5/7/2010	5/7/2015
	200,000	$0.25	12/21/2011	12/21/2016
Marc Legault	100,000	$0.40	7/16/2006	7/16/2012
	25,000	$0.10	12/8/2008	12/7/2013
	50,000	$0.25	5/7/2010	5/7/2015
	325,000	$0.25	12/21/2011	12/21/2016
Andrew Robertson	25,000	$0.10	12/8/2008	12/7/2013
	100,000	$0.40	7/16/2006	7/16/2012
	125,000	$0.25	5/7/2010	5/7/2015
	250,000	$0.25	12/21/2011	12/21/2016
Edward Sorbara	50,000	$0.10	12/8/2008	12/7/2013
	100,000	$0.40	7/16/2006	7/16/2012
	125,000	$0.25	5/7/2010	5/7/2015
	225,000	$0.25	12/21/2011	12/21/2016
Total Officers/Directors	6,375,000
Employees/Consultants/etc.	175,000	$0.10	12/8/2008	12/7/2013
	190,000	$0.35	11/26/2007	11/25/2012
	225,000	$0.40	7/16/2006	7/16/2012
	1,100,000	$0.25	5/7/2010	5/7/2015
	1,215,000	$0.25	12/21/2011	12/21/2016
TOTAL	9,280,000

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ITEM 7.  MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

7.A.  Major Shareholders.

7.A.1.a.  Holdings By Major Shareholders.

Refer to ITEM #6.E, and Tables No. 4/5/6/7/8/9/10/11, for details regarding securities held by 5% Shareholders, Senior Management, Directors, and others.

7.A.1.b.  Significant Changes in Major Shareholders’ Holdings.

The participation in private placements of equity by the Company and exercise of stock options/share purchase warrants has lead over the last several years to some significant changes in the holdings of major shareholders (five percent) direct/indirect holdings of common shares.  Refer to ITEM #6E and Table No. 4/5/6/7/8 for additional information.

	Common Shares Owned at 01/31/2012	Common Shares Owned at 8/31/2010	Common Shares Owned at 8/31/2009
Sprott Asset Management	11,329,878	16,043,010	8,934,868
Agnico Eagle Mines Limited	6,762,000	6,762,000	5,362,000

7.A.1.c.  Different Voting Rights.  The Company’s major shareholders do not have different voting rights.

7.A.2.  Canadian Share Ownership.  On 01/31/2012, the Company’s shareholders’ list showed 92,216,445 common shares outstanding, with 39 registered shareholders.  12 of these shareholders were resident in Canada, holding 86,978,106 common shares (representing about 94.3% of the issued/outstanding shares); 24 registered shareholders were resident in the United States, holding 3,828,339 common shares (representing about 4.1%); and 3 registered shareholder was resident in other countries, holding 1,410,000 common shares.

The Company has researched the indirect holding by depository institutions and other financial institutions; based on this research and other research into the indirect holdings of other institutions, the Company estimates that it has about 800 “holders of record” in Canada, holding approximately 85% of the outstanding shares of the Company, and over 1,000 beneficial owners that own 100% of its common shares.

7.A.3.  Control of Company.  The Company is a publicly owned Canadian corporation, the shares of which are owned by Canadian residents, United States’ residents, and other foreign residents.  The Company is not controlled by any foreign government or other person(s) except as described in ITEM #4.A., “History and Growth of the Company”; and ITEM #6.E., “Share Ownership”.

7.A.4.  Change of Control of Company Arrangements.

        No Disclosure Necessary

- 56 –

7.B.  Related Party Transactions

The Company has an administrative services agreement with Hastings Management Corp. whereby Hastings provides services to the Company including providing office space, office furniture, boardroom facilities, access to photocopier, fax and such other amenities normally associated with office needs; and providing such other additional instructions and directions as the Company may require. These costs to Hastings Management are divided between several public and private companies and not all the costs of each category is paid by any one company. As such, while most companies charge these expenses individually to the income statement the Company reduces these costs by sharing them with other companies. Hastings Management estimates the percentage of time spent on any one company in any given period and it is charged proportionately.  Richard Hughes, a Director of Golden Goliath, owns Hastings Management.  During the Fiscal 2011 Ended August 31, 2011, Hastings Management charged the Company $42,579 (2010 = $47,689) for these services.

J.Paul Sorbara’s “annual compensation” is paid to Sorbara Geological Consulting Ltd., private company owned and controlled by him.  During Fiscal 2011/2010/2009, this firm was paid $120,000, $120,000 and $120,000.

Due from Related Parties at 8/31/2011 included $90 (2010 = $21,108) due from a company controlled by a director.

During Fiscal 2011 ended August 31, 2011, the Company paid $41,188 (2010 = $40,993) in wages and benefits to DanielFernandez, Manager of Minera Delta S.A. and a director.

During Fiscal 2011 ended August 31, 2011, the Company paid $60,000 (2009 = $60,000) in consulting fees to Stephen Pearce, CFO/Secretary/Director.

Other than as disclosed above and in the MD&A in ITEM #5, there have been no transactions since 8/31/2010, or proposed transactions, which have materially affected or will materially affect the Company in which any director, executive officer, or beneficial holder of more than 10% of the outstanding common shares, or any of their respective relatives, spouses, associates or affiliates has had or will have any direct or material indirect interest.  Management believes the transactions referenced above were on terms at least as favorable to the Company as the Company could have obtained from unaffiliated parties.

7.C.  Interests of Experts and Counsel

--- No Disclosure Necessary ---

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ITEM 8.  FINANCIAL INFORMATION

8.A.  Statements and Other Financial Information

The Company's financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the financial statements.

The financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report.  The audit reports of Morgan & Company LLP, Chartered Accountants are included herein immediately preceding the financial statements.

Audited Financial Statements

Fiscal 2011/2010/2009 Ended August 31st

8.A.7.  Legal/Arbitration Proceedings

The Directors and the Senior Management of the Company do not know of any material, active or pending, legal proceedings against them; nor is the Company involved as a plaintiff in any material proceeding or pending litigation.

The Directors and the Senior Management of the Company know of no active or pending proceedings against anyone that might materially adversely affect an interest of the Company.

8.B.  Significant Changes

No undisclosed significant change has occurred since the date of the annual financial statements and/or since the date of the most recent interim financial statements.

ITEM 9.  THE OFFER AND LISTING

9.A.  Common Share Trading Information

The Company's common shares began public trading on 10/16/2001.  The current stock symbol on the TSX Venture Exchange in Canada is “GNG”.  The CUSIP number is 381059104.

The following table lists the volume of trading and high, low and closing sales prices on the TSX Venture Exchange for the Company's common shares for: the last six months, the last nine fiscal quarters, and the last five fiscal years.

- 58 –

Table No. 9 TSX Venture Exchange Common Shares Trading Activity Canadian Dollars
Period Ended	Volume	High	Low	Closing
Monthly
01/31/2012	2,828,281	$0.27	$0.18	$0.27
12/31/2011	2,059,800	$0.23	$0.18	$0.20
11/30/2011	1,366,400	$0.27	$0.19	$0.19
10/31/2011	2,388,500	$0.35	$0.18	$0.28
9/30/2011	1,960,900	$0.38	$0.22	$0.23
8/31/2011	2,686,700	$0.41	$0.27	$0.38
7/31/2011	2,931,600	$0.47	$0.27	$0.38
Quarterly
11/30/2011	5,738,100	$0.38	$0.18	$0.19
8/31/2011	8,132,900	$0.47	$0.24	$0.38
5/31/2011	17,866,700	$0.59	$0.30	$0.33
2/28/2011	30,317,200	$0.75	$0.21	$0.53
11/30/2010	9,458,400	$0.29	$0.19	$0.22
8/31/2010	4,679,000	$0.25	$0.15	$0.21
5/31/2010	5,617,700	$0.28	$0.16	$0.20
2/28/2010	5,600,900	$0.29	$0.14	$0.22
11/30/2009	9,052,100	$0.32	$0.14	$0.16
Yearly
8/31/2011	62,054,900	$0.75	$0.18	$0.38
8/31/2010	24,849,700	$0.32	$0.14	$0.21
8/31/2009	19,670,900	$0.18	$0.04	$0.13
8/31/2008	12,113,700	$0.45	$0.13	$0.15
8/31/2007	13,298,900	$0.49	$0.24	$0.29

The Company’s common shares began trading on the Berlin Stock Exchange on 4/23/2004, with the trading symbol of “GGZ.BE”.  Total volume through 01/31/2012 was 127,500.  Prices ranged from euro$0.02 to euro$0.51; the closing price on 01/31/2012 was euro$0.14; no trades during FY2010-FY2011.

The Company’s common shares began trading on the Frankfurt Stock Exchange on 1/14/2004, with the trading symbol of “GGZ.F”.  Total volume through 01/31/2012 was 12,493,500.  Prices ranged from euro$0.01 to euro$0.50; the closing price on 01/31/2012 was euro$0.12.

The Company’s common shares began trading on the Munich-Stock Exchange on 1/17/2006, with the trading symbol of “GGZ.MU”.  Total volume through 01/31/2012 was 2,830,300.  Prices ranged from euro$0.01 to euro$0.47; the closing price on 01/31/2012 was euro$0.15.

The Company’s common shares began trading on the Stuggart Stock Exchange in Europe on 1/18/2011, with the trading symbol of “GGZ.SG”.  Total volume through 01/31/2012 was 533,800.  Prices ranged from euro$0.12 o euro$0.48; the closing price on 01/31/2012 was euro$0.14.

- 59 –

9.A.5.  Common Share Description

Registrar/Common Shares Outstanding/Shareholders

The Company's common shares are issued in registered form and the following information is taken from the records of Computershare Investor Services Inc. [located at 510 Burrard Street, Vancouver, British Columbia Canada  V5K 1A1], the registrar and transfer agent for the common shares.

The authorized capital of Golden Goliath consists of an unlimited number of common shares without par value.

Common Share Description

All of the authorized common shares of the Company are of the same class and, once issued, rank equally as to dividends, voting powers, and participation in assets.  Holders of common stock are entitled to one vote for each share held of record on all matters to be acted upon by the shareholders.  Holders of common stock are entitled to receive such dividends as may be declared from time to time by the Board of Directors, in its discretion, out of funds legally available therefore.

Upon liquidation, dissolution or winding up of the Company, holders of common stock are entitled to receive pro rata the assets of Company, if any, remaining after payments of all debts and liabilities.  No shares have been issued subject to call or assessment.  There are no pre-emptive or conversion rights and no provisions for redemption or purchase for cancellation, surrender, or sinking or purchase funds.

Provisions as to the modification, amendment or variation of such shareholder rights or provisions are contained in the British Columbia Business Corporations Act.  Unless the British Columbia Business Corporations Act or the Company's Articles otherwise provide, any action to be taken by a resolution of the shareholders may be taken by an ordinary resolution or by a vote of a majority or more of the shares represented at the shareholders' meeting.

The Company's Articles and the British Columbia Business Corporations Act contain provisions, which require a “special resolution” for effecting certain corporate actions.  Such a “special resolution” requires a two-third vote of shareholders rather than a simple majority for passage.  The principle corporate actions that require a “special resolution” include:

a.  Transferring the Company's jurisdiction from British Columbia to

    another jurisdiction;

b.  Giving financial assistance under certain circumstances;

c.  Certain conflicts of interest by Directors;

d.  Disposing of all/substantially all of Company's undertakings;

e.  Removing Director before expiration of his term in office;

f.  Certain alterations of share capital;

g.  Changing the Company name; and

h.  Certain reorganizations of the Company.

There are no restrictions on the repurchase or redemption of common shares of the Company while there is any arrearage in the payment of dividends or sinking fund installments.

Stock Options

Refer to ITEM #6E and Tables No. 4/5/6/7/8 for additional information.

Warrants

As of 01/31/2012, no share purchase warrants were outstanding.

- 60 –

9.A.6.    Differing Rights

9.A.7.a.  Subscription Warrants/Right

9.A.7.b.  Convertible Securities/Warrants

The Company has no convertible securities.

Refer to ITEM #9.4.5. “Warrants” above for information about warrants.

9.C.  Stock Exchanges Identified

The common shares trade on the TSX Venture Exchange in Canada and in Europe on the Berlin Stock Exchange, the Frankfurt Stock Exchange, the Munich Stock Exchange, and the XETRA Exchange.

ITEM 10.  ADDITIONAL INFORMATION

10.A.  Share Capital

       --- Not Applicable ---

10.B.  Memorandum and Articles of Association

Refer to discussion in Form-20-FR Registration Statement and amendments for more information about the Company’s articles.

10.C.  Material Contracts

a.

Earn-In and Shareholders Agreement with Agnico-Eagle Mines Limited, for the exploration and development of the Company’s Las Bolas and Los Hilos properties, dated 12/8/2011.

10.D.  Exchange Controls

Canada has no system of exchange controls.  There are no Canadian restrictions on the repatriation of capital or earnings of a Canadian public company to non-resident investors.  There are no laws in Canada or exchange restrictions affecting the remittance of dividends, profits, interest, royalties and other payments to non-resident holders of the Company's securities, except as discussed in ITEM 10.E., “Taxation” below.

Restrictions on Share Ownership by Non-Canadians

There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require review and approval by the Minister of Industry (Canada) of certain acquisitions of “control” of the Company by a “non-Canadian”.  The threshold for acquisitions of control is generally defined as being one-third or more of the voting shares of the Company.  “Non-Canadian” generally means an individual who is not a Canadian citizen, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

10.E  Taxation

The Company believes the following is a brief summary of all material principal Canadian federal income tax consequences to a holder of common shares of the Company (a “U.S. Holder”) who deals at arm's length with the Company, holds the shares as capital property and who, for the purposes of the Income Tax Act (Canada) (the “Act”) and the Canada – United States Income Tax Convention (the “Treaty”), is at all relevant times resident in the United States, is not and is not deemed to be resident in Canada and does not use or hold and is not deemed to use or hold the shares in carrying on a business in Canada. Special rules, which are not discussed below, may apply to a U.S. Holder that is an insurer that carries on business in Canada and elsewhere.

U.S. Holders are urged to consult their own tax advisors with respect to their particular circumstances.

- 61 –

Under the Act and the Treaty, a U.S. Holder of common shares will generally be subject to a 15% withholding tax on dividends paid or credited or deemed by the Act to have been paid or credited on such shares.  The withholding tax rate is 5% where the U.S. Holder is a corporation that beneficially owns at least 10% of the voting shares of the Company and the dividends may be exempt from such withholding in the case of some U.S. Holders such as qualifying pension funds and charities.

In general, a U.S. Holder will not be subject to Canadian income tax on capital gains arising on the disposition of shares of the Company unless (i) at any time in the five-year period immediately preceding the disposition, 25% or more of the shares of any class or series of the Company’s capital stock was owned by (or was under option of or subject to an interest of) the U.S. holder or persons with whom the U.S. holder did not deal at arm's length, and (ii) the value of the Company’s common shares at the time of the disposition derives principally from real property (as defined in the Treaty) situated in Canada.  For this purpose, the Treaty defines real property situated in Canada to include rights to explore for or exploit mineral deposits situated in Canada, rights to amounts computed by reference to the amount or value of production from such mineralization, certain other rights in respect of properties situated in Canada and shares of a corporation the value of whose shares is derived principally from real property situated in Canada.

The US Internal Revenue Code provides special anti-deferral rules regarding certain distributions received by US persons with respect to, and sales and other dispositions (including pledges) of stock of, a passive foreign investment company.  A foreign corporation, such as the Company, will be treated as a passive foreign investment company if 75% or more of its gross income is passive income for a taxable year or if the average percentage of its assets (by value) that produce, or are held for the production of, passive income is at least 50% for a taxable year.  If a U.S. Holder holds shares in any year in which the Company is a PFIC, that holder might be required to file Internal Revenue Service Form 8621.

This summary does not address potential tax effects relevant to our Company or those tax considerations that depend upon circumstances specific to each investor.  In addition, this discussion does not address the tax consequences that may be relevant to particular investors subject to special treatment under certain U.S. Federal income tax laws, such as dealers in securities, tax-exempt entities, banks, insurance companies and non-U.S. Holders.  Accordingly, holders and prospective holders of our common shares should consult with their own tax advisors with respect to the income tax consequences to them of purchasing, owning and disposing of common shares in our Company

10.F.  Dividends and Paying Agents

The Company has not declared any dividends on its common shares for the last five years and does not anticipate that it will do so in the foreseeable future.  The present policy of the Company is to retain future earnings for use in its operations and the expansion of its business.

Notwithstanding the aforementioned: the Company is unaware of any dividend restrictions; has no specific procedure for the setting of the date of dividend entitlement; but might expect to set a record date for stock ownership to determine entitlement; has no specific procedures for non-resident holders to claim dividends, but might expect to mail their dividends in the same manner as resident holders.  The Company has not nominated any financial institutions to be the potential paying agents for dividends in the United States.

10.G.  Statement by Experts

       --- Not Applicable ---

- 62 –

10.H.  Documents on Display

The Company’s documents can be viewed at its Canadian office, located at:

 675 West Hastings Street, #711, Vancouver, British Columbia, Canada  V6B 1N2.

The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended, and files reports, registration statements and other information with the Securities and Exchange Commission (the “SEC”).  The Company’s reports, registration statements and other information can be inspected on the SEC’s website at www.sec.gov and such information can also be inspected and copies ordered at the public reference facilities maintained by the SEC at the following location: Judiciary Plaza, 100 F Street NE, Washington, D.C.  20549.  Further, we file reports under Canadian regulatory requirements on SEDAR; you may access our reports filed on SEDAR by accessing their website at www.sedar.com.  Finally, corporate information may be found at the Company’s website: goldengoliath.com.

ITEM 11.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a small business issuer, as defined in Section 240.12b-2; and thus, Item #11 is not applicable.

ITEM 12.  DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

12.A.  Debt Securities            --- No Disclosure Necessary ---

12.B.  Warrants and Rights        --- Refer to ITEM #9, “Warrants”

12.C.  Other Securities           --- No Disclosure Necessary ---

12.D.  American Depository Shares  -- No Disclosure Necessary ---

PART II

ITEM 13.  DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES

ITEM 14.  MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY

          HOLDERS AND USE OF PROCEEDS

          --- No Disclosure Necessary ---

ITEM 15.  CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

The Company’s management is responsible for establishing and maintaining disclosure controls and procedures to provide reasonable assurance that material information related to the Company, including its consolidated subsidiaries, is made known to senior management, including Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”), by others within those entities on a timely basis so that appropriate decisions can be made regarding public disclosure.

We carried out an evaluation, under the supervision and with the participation of our management, including our Principal Executive Officer and our Principal Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e)) under the Securities and Exchange Act of 1934, as amended) as November 30, 2011.  The Chief Executive Officer and Chief Financial Officer concluded that the disclosure controls and procedures as of August 31, 2011, were effective to give reasonable assurance that the information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and (ii) accumulated and communicated to management, including the Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

- 63 –

Management’s Annual Report on Internal Control over Financial Reporting

The Company’s management is responsible for designing, establishing and maintaining a system of internal controls over financial reporting (as defined in Exchange Act Rule 13a-15(f)) to provide reasonable assurance that the financial information prepared by the Company for external purposes is reliable and has been recorded, processed and reported in an accurate and timely manner in accordance with GAAP.  The Board of Directors is responsible for ensuring that management fulfills its responsibilities.  The Audit Committee fulfills its role of ensuring the integrity of the reported information through its review of the interim and annual financial statements.  Management reviewed the results of their assessment with the Company’s Audit Committee.

Because of its inherent limitations, the Company’s internal control over financial reporting may not prevent or detect all possible misstatements or frauds.  Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

To evaluate the effectiveness of the Company’s internal control over financial reporting, Management has used the Internal Control - Integrated Framework, which is a suitable, recognized control framework established by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).  Management has assessed the effectiveness of the Company’s internal control over financial reporting and concluded that such internal control over financial reporting is effective as of November 30, 2011.

Limitations on the Effectiveness of Controls

The Company's management, including the CEO and CFO, does not expect that our Disclosure Controls or our Internal Controls will prevent all error and all fraud.  A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.  Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs.  Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within the Company have been detected.  These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake.  Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the control.  The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed achieving its stated goals under all potential future conditions; over time, control may become inadequate because of changes in conditions, or the degree of compliance with the policies or procedures may deteriorate.  Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Attestation Report of the Registered Accounting Firm

This annual report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the Securities and Exchange Commission that require the Company to provide only management’s report in this Form 20-F Annual Report.

Changes in Internal Control over Financial Reporting

There were no changes in the Company’s internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

ITEM 16.  RESERVED

ITEM 16A.  AUDIT COMMITTEE FINANCIAL EXPERT

The Company does not have an “audit committee financial expert” serving on its audit committee.  The Company’s Audit Committee consists of two independent directors and the CFO/Secretary, all of whom are both financially literate and very knowledgeable about the Company’s affairs.  Because the Company’s structure and operations are straightforward, the Company does not find it necessary to augment its Board with a financial expert.

- 64 –

ITEM 16B.  CODE OF ETHICS

The Company has not adopted a written ”code of ethics” that meets the new United States' Sarbanes-Oxley standards; the Board of Directors believes that existing Canadian standards and procedures is adequate for its purposes.  The Company has not seen any need to adopt a written code of ethics on the basis that its corporate culture effectively deters wrongdoing and promotes honest and ethical conduct, full, fair and accurate, timely, and understandable disclosure in reports and documents, the compliance with applicable governmental laws, rules and regulations; the prompt internal reporting of violations of the code; and accountability for adherence to the code.

ITEM 16C. PRINCIPAL ACCOUNTIING FEES AND SERVICES

The audit committee is directly responsible for the appointment, compensation and oversight of auditors; the audit committee has in place procedures for receiving complaints and concerns about accounting and auditing matters; and has the authority and the funding to engage independent counsel and other outside advisors.

The Audit Committee may delegate to one or more designated members of the Audit Committee the authority to grant pre-approvals required by this policy / procedure.  The decisions of any Audit Committee member to whom authority is delegated to pre-approve a service shall be presented to the full Audit Committee at its next scheduled meeting.

In accordance with the requirements of the US Sarbanes-Oxley Act of 2002 and rules issued by the Securities and Exchange Commission, we introduced a procedure for the review and pre-approval of any services performed by Morgan & Company, including audit services, audit related services, tax services and other services.  The procedure requires that all proposed engagements of Morgan & Company for audit and permitted non-audit services are submitted to the finance and audit committee for approval prior to the beginning of any such services.

Fees, including reimbursements for expenses, for professional services rendered by Morgan & Company to the Company are detailed below.

Principal Accountant Fees and Services	Fiscal 2011 Ended 8/31/2011	Fiscal 2010 Ended 8/31/2010
Audit Fees	$32,900	$33,000
Audit-Related Fees	$nil	$nil
Tax Fees	$1,250	$7,650
All Other Fees	$nil	$nil
TOTAL	$34,150	$40,600

ITEM 16D.  EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES

ITEM 16E.  PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS

ITEM 16F.  CHANGE IN REGISTRANTS’S CEERTIFYING ACCOUNTANT

ITEM 16G.  CORPORTE GOVERNANCE

           --- No Disclosure Necessary ---

- 65 –

PART III

ITEM 17.  FINANCIAL STATEMENTS

The Company's consolidated financial statements are stated in Canadian Dollars (CDN$) and are prepared in accordance with Canadian Generally Accepted Accounting Principles (GAAP), the application of which, in the case of the Company, conforms in all material respects for the periods presented with United States GAAP, except as discussed in footnotes to the consolidated financial statements.

The consolidated financial statements as required under ITEM #17 are attached hereto and found immediately following the text of this Annual Report.  The audit reports of Morgan & Company, Chartered Accountants included herein immediately preceding the audited consolidated financial statements.

Audited Financial

    Auditor's Report, dated 12/14/2011

    Consolidated Balance Sheets at 8/31/2011 and 8/31/2010

    Consolidated Statements of Operations and Deficit

      for the years ended 8/31/2011, 8/31/2010, and 8/31/2009

    Consolidated Statements of Cash Flows

      for the years ended 8/31/2011, 8/31/2010, and 8/31/2009

    Notes to Consolidated Financial Statements

ITEM 18.  FINANCIAL STATEMENTS

The Company has elected to provide financial statements pursuant to ITEM #17.

ITEM 19.  EXHIBITS

1.  Notice of Articles and Articles of Incorporation as currently in effect:

    Incorporated by reference to Form 20-FR Registration Statement, as amended

2.  Instruments defining the rights of holders of equity or debt securities

 being registered.    --- Refer to Exhibit No. 1 ---

3.  Voting Trust Agreements:  No Disclosure Necessary

4.  Material Contracts:

    Incorporated by reference to Form 20-FR Registration Statement, as amended;

    Form 20-F Annual Reports; and Form 6-K’s

a. Letter Agreement regarding the Corona and El Chamizal Properties, dated May 14, 2007;

Filed 7-22-2009 with Form 20-FA for Fiscal 2008 Ended 8/31/2008

b.

Letter Agreement regarding the Corona and El Chamizal Properties, dated October 10, 2007;

Filed 7-22-2009 with Form 20-FA for Fiscal 2008 Ended 8/31/2008

c.

Earn-in and Shareholders Agreement with Agnico-Eagle Mines Limited, dated 12-8-2011

5.  Foreign Patents:                     No Disclosure Necessary

6.  Earnings Per Share Calculation:      No Disclosure Necessary

7.  Ratio of Earnings To Fixed Charges:  No Disclosure Necessary

8.  List of Subsidiaries:                              Refer to ITEM #4.C.

9.   Statement Regarding Date of Financial Statements: No Disclosure Necessary

10.  Notice Required by Rul3e 104 of Regulation BTR:   No Disclosure Necessary

11.  Code of Ethics as required by ITEM No. 16B:       No Disclosure Necessary

12.1  Certifications required by Rule 13a-14(a) or Rule 15d-14(a)

12.2  Certifications required by Rule 13a-14(a) or Rule 15d-14(a)

13.1  Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and

      Section 1350 of Chapter 63 of Title 18 of the United States Code

13.2  Certifications required by Rule 13a-14(b) or Rule 15d-14(b) and

      Section 1350 of Chapter 63 of Title 18 of the United States Code

14.  Legal Opinion required by Instruction 3 of ITEM 7B: No Disclosure Necessary

15.  (a) Any additional exhibits you wish to file as part of the registration statement or report, clearly marked to indicate their subject matter:

         --- No Disclosure Necessary---

     (b) any document or part of a document incorporated by reference in this filing if it is not otherwise required Additional Exhibits:

         ---Incorporated by reference to Form 20-FR Registration Statement,

            as amended and Form 6-K’s ---

- 66 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

CONSOLIDATED FINANCIAL STATEMENTS

(Expressed in Canadian Dollars)

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

- 67 –

INDEPENDENT AUDITOR'S REPORT

To the Shareholders of

Golden Goliath Resources Ltd.

Report on the consolidated financial statements

We have audited the accompanying consolidated financial statements of Golden Goliath Resources Ltd., which comprise the consolidated balance sheets as at August 31, 2011 and 2010 and the consolidated statements of loss and comprehensive loss, cash flows, and shareholders’ equity for each of the years in the three-year period ended August 31, 2011, and a summary of significant accounting policies and other explanatory information.  

Management’s responsibility for the consolidated financial statements

Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with Canadian generally accepted accounting principles, and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.  We conducted our audits in accordance with Canadian generally accepted auditing standards and the standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements.  The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error.  In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control.  An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.  

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, these consolidated financial statements present fairly, in all material respects, the financial position of Golden Goliath Resources Ltd. as at August 31, 2011 and 2010, and the results of its operations and its cash flows for each of the years in the three-year period ended August 31, 2011 in accordance with Canadian generally accepted accounting principles.

Emphasis of matter

Without qualifying our opinion, we draw attention to Note 1 in the consolidated financial statements which describes matters and conditions that indicate the existence of a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern.  

Vancouver, Canada	“Morgan & Company”
December 14, 2011	Chartered Accountants

Tel: (604) 687 – 5841 Fax: (604) 687 – 0075 www.morgan-cas.com MEMBER OF P.O. Box 10007 Pacific Centre Suite 1488 – 700 West Georgia Street Vancouver, BC V7Y 1A1

- 68 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

CONSOLIDATED BALANCE SHEETS

(Expressed in Canadian Dollars)

		AUGUST 31
		2011		2010
ASSETS
Current
Cash		$	275,374	$	246,644
Short term investments (Note 3)			2,461,232		1,650,000
Marketable securities (Note 4)			65,625		-
Accounts receivable (Note 5)			17,257		34,042
Due from related parties (Note 11)			90		21,108
Prepaid expenses			9,741		22,085
			2,829,319		1,973,879
VAT Recoverable			70,574		40,018
Exploration Advances			-		35,496
Mineral Property Acquisition Costs (Note 6)			334,773		334,773
Mineral Property Exploration Costs (Note 6)			8,646,694		7,754,997
Property and Equipment (Note 7)			141,248		93,064
		$	12,022,608	$	10,232,227
LIABILITIES
Current
Accounts payable and accrued liabilities		$	115,927	$	165,372
Employment Benefit Obligations			58,000		37,000
			173,927		202,372
SHAREHOLDERS’ EQUITY
Share Capital (Note 8)			24,848,652		21,928,143
Contributed Surplus (Note 8)			1,980,798		2,061,321
Accumulated Other Comprehensive Loss			(9,375)		-
Deficit			(14,971,394)		(13,959,609)
			11,848,681		10,029,855
		$	12,022,608	$	10,232,227
Approved on behalf of the Board of Directors:
“J. Paul Sorbara”	“Stephen W. Pearce”
Director	Director

The accompanying notes are an integral part of these financial statements.

- 69 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF LOSS

AND COMPREHENSIVE LOSS

 (Expressed in Canadian Dollars)

	YEARS ENDED AUGUST 31
	2011		2010		2009
Expenses
Amortization	$	26,054	$	22,016	$	23,800
Automobile		2,823		3,121		3,288
Consulting (Note 11(d))		191,928		164,615		68,346
Foreign exchange loss		22,130		14,584		36,485
Investor relations		38,242		46,972		34,050
Management fees (Note 11(a))		120,000		120,000		120,000
Office and general (Note 11(c))		111,504		74,159		61,417
Professional fees		64,958		73,550		72,433
Rent and utilities		44,595		56,666		59,013
Transfer agent and filing fees		16,747		34,758		15,043
Travel		34,314		17,308		43,260
Stock based compensation		-		492,137		57,507
Wages and benefits (Note 11(b))		293,195		231,240		189,846
Loss Before Other Income (Expense)		(966,490)		(1,351,126)		(784,488)
Other Income (Expense)
Gain on sale of equipment		-		-		2,302
Property option payments received		55,843		-		-
Write down of mineral property exploration costs		(118,769)		(74,298)		(1,435,660)
Sales taxes recovery		-		-		3,469
Interest income		17,631		12,440		18,194
Net Loss For The Year		(1,011,785)		(1,412,984)		(2,196,183)
Other Comprehensive Loss
Unrealized loss on marketable securities		(9,375)		-		-
Comprehensive Loss For The Year	$	(1,021,160)	$	(1,412,984)	$	(2,196,183)
Loss Per Share – Basic and Diluted	$	(0.01)	$	(0.02)	$	(0.04)
Weighted Average Number Of Shares Outstanding – Basic and diluted		85,749,549		72,302,874		60,934,037

The accompanying notes are an integral part of these financial statements.

- 70 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

 (Expressed in Canadian Dollars)

	COMMON SHARES WITHOUT PAR VALUE
	SHARES	AMOUNT		CONTRIBUTED SURPLUS		DEFICIT		ACCUMULATED OTHER COMPREHENSIVE LOSS		SHAREHOLDERS’  EQUITY
Balance, August 31, 2008	60,934,037	$	19,133,783	$	1,511,677	$	(10,350,442)	$	-	$	10,295,018
Stock options granted	-		-		57,507		-		-		57,507
Loss for the year	-		-		-		(2,196,183)		-		(2,196,183)
Balance, August 31, 2009	60,934,037		19,133,783		1,569,184		(12,546,625)		-		8,156,342
Shares issue for Private placement	19,721,466		2,958,220		-		-		-		2,958,220
Share issue cost	-		(279,524)		-		-		-		(279,524)
Fair value of agent’s warrants	-		115,664		-		-		-		115,664
Stock options granted	-		-		492,137		-		-		492,137
Loss for the year	-		-		-		(1,412,984)		-		(1,412,984)
Balance, August 31, 2010	80,655,503		21,928,143		2,061,321		(13,959,609)		-		10,029,855
Stock options exercised	675,000		118,500		-		-		-		118,500
Fair value of options allocated to shares on exercise	-		80,523		(80,523)		-		--		-
Warrants exercised	10,885,942		2,721,486		-		-		-		2,721,486
Other comprehensive loss	-		-		-		-		(9,375)		(9,375)
Loss for the year	-		-		-		(1,011,785)		-		(1,011,785)
Balance, August 31, 2011	92,216,445	$	24,848,652	$	1,980,798	$	(14,971,394)	$	(9,375)	$	11,848,681

The accompanying notes are an integral part of these financial statements.

- 71 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in Canadian Dollars)

	YEARS ENDED AUGUST 31
	2011		2010		2009
Cash Provided By (Used For)
Operating Activities
Net loss for the year	$	(1,011,785)	$	(1,412,984)	$	(2,196,183)
Items not affecting cash:
Amortization		26,054		22,016		23,800
Gain on sale of equipment		-		-		(2,302)
Stock based compensation		-		492,137		57,507
Unrealized foreign exchange loss		-		-		(2,036)
Write down of mineral property exploration costs		118,769		74,298		1,435,660
Change in non-cash operating assets and liabilities:
Accounts receivable and VAT recoverable		(25,003)		90,267		12,849
Due from related parties		21,018		(21,108)		-
Prepaid expenses		12,344		(8,936)		13,341
Accounts payable and accrued liabilities		(48,450)		43,226		(43,760)
Employment benefit obligations		21,000		11,000		(20,000)
		(886,053)		(710,084)		(721,124)
Investing Activities
Exploration advances		-		(35,496)		-
Expenditures on mineral properties		(1,100,965)		(716,037)		(1,365,900)
Purchase of short term investments		(3,800,000)		(2,500,000)		-
Proceeds from redemption of short term investments		3,000,000		1,255,000		2,153,945
Purchase of property and equipment		(74,238)		(10,880)		(22,247)
Mineral property option payments received		50,000		-		-
Proceeds from sale of equipment		-		-		5,276
		(1,925,203)		(2,007,413)		771,074
Financing Activities
Share issuances for cash		2,839,986		2,958,220		-
Share issue costs		-		(163,860)		-
		2,839,986		2,794,360		-
Increase In Cash		28,730		76,863		49,950
Cash, Beginning of Year		246,644		169,781		119,831
Cash, End Of Year	$	275,374	$	246,644	$	169,781
Supplementary Cash Flow Disclosure And Non-Cash Investing and Financing Activities:
Interest paid	$	-	$	-	$	-
Income taxes paid	$	-	$	-	$	-
Shares received for mineral property interest	$	75,000	$	-	$	-
Warrants issued for agent’s commission	$	-	$	115,664	$	-

The accompanying notes are an integral part of these financial statements.

- 72 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

1.

NATURE OF OPERATIONS AND GOING CONCERN

Golden Goliath Resources Ltd. (the “Company”) is incorporated under the Business Corporations Act of British Columbia.  The Company is a public company listed on the TSX Venture Exchange (the “TSX.V”), trading under the symbol “GNG”.    

The Company is in the process of exploring and developing its Mexican resource properties and has not yet determined whether these properties contain reserves that are economically recoverable.  The recoverability of amounts shown for mineral properties and related deferred exploration expenditures are dependent upon the discovery of economically recoverable reserves, confirmation of the Company’s interest in the underlying mineral claims, the ability of the Company to obtain necessary financing to complete the development of the properties and upon future profitable production or proceeds from the disposition thereof.  Managements’ plan in this regard is to secure additional funds through future equity financings, which either may not be available or may not be available on reasonable terms.

These financial statements have been prepared in accordance with Canadian generally accepted accounting principles on a going concern basis, which presume the realization of assets and discharge of liabilities in the normal course of business for the foreseeable future. The Company’s ability to continue as a going concern is dependent upon achieving profitable operations and upon obtaining additional financing. Management is confident that the outcome of these matters will be positive. These financial statements do not include any adjustments to the amounts and classification of assets and liabilities that might be necessary should the Company be unable to continue in business.  

2.

SIGNIFICANT ACCOUNTING POLICIES

These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles (“GAAP”) as prescribed by The Canadian Institute of Chartered Accountants (“CICA”) and are stated in Canadian dollars unless otherwise noted.

a)

Basis of Consolidation

The consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Minera Delta S.A. de C.V. of Mexico, and 4247 Investments Ltd. (inactive) of British Columbia. Significant inter-company balances and transactions have been eliminated on consolidation.

b)

Variable Interest Entities

The CICA issued Accounting Guideline 15, “Consolidation of Variable Interest Entities”, to provide accounting guidance related to variable interest entities (“VIE”).  A VIE is an entity in which equity investors do not have the characteristics of a “controlling financial interest” or there is not sufficient equity at risk for the entity to finance its activities without additional subordinated financial support.  The Company has determined that it does not have a primary beneficiary interest in a VIE.

c)

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying disclosures.  Although these estimates are based on management’s knowledge of current events and actions the Company may undertake in the future, actual results ultimately may differ from the estimates.

Significant areas requiring the use of management estimates relate to the identification and capitalization of exploration costs, determination of impairment in the carrying values for long-lived assets, the existence of contingent assets and liabilities, amounts recorded for related party transactions and balances, asset retirement obligations and stock-based compensation valuations.  Management reviews significant estimates on a periodic basis and, when changes in estimates are necessary, makes adjustments prospectively.

- 74 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

2.    SIGNIFICANT ACCOUNTING POLICIES (continued)

d)

Financial Instruments

The Company follows CICA Handbook Sections 1530, “Comprehensive Income”, Section 3251, “Equity”, Section 3855, “Financial Instruments – Recognition and Measurement”, Section 3862, Financial Instruments – Disclosures, and Handbook Section 3863, Financial Instruments – Presentation, and Section 3865, “Hedges”.  Section 1530 establishes standards for reporting and presenting comprehensive income, which is defined as the change in equity from transactions and other events from non-owner sources.  Other comprehensive income refers to items recognized in comprehensive income that are excluded from net income calculated in accordance with Canadian generally accepted accounting principles.

Sections 3862 and 3863 establish standards for disclosure and presentation of financial instruments and non-financial derivatives and identifies the information that should be disclosed about them (Note 9).  Section 3865 describes when and how hedge accounting can be applied as well as the disclosure requirements.  Hedge accounting enables the recording of gains, losses, revenues and expenses from derivative financial instruments in the same period as for those related to the hedged item. The Company does not have any hedge transactions.  

Section 3855 prescribes when a financial asset, financial liability or non-financial derivative is to be recognized on the balance sheet and at what amount, requiring fair value or cost-based measures under different circumstances.  Under Section 3855, financial instruments must be classified into one of these five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets or other financial liabilities.  All financial instruments, including derivatives, are measured in the balance sheet at fair value except for loans and receivables, held-to-maturity investments and other financial liabilities which are measured at amortized cost.  Subsequent measurement and changes in fair value will depend on their initial classification, as follows: held-for-trading financial assets are measured at fair value and changes in fair value are recognized in net earnings; available-for-sale financial instruments are measured at fair value with changes in fair value recorded in other comprehensive income until the investment is derecognized or impaired at which time the amounts would be recorded in net earnings.

The Company has made the following designations of its financial instruments:  cash and short-term investments as held-for-trading; marketable securities as available for sale (Level 1); accounts receivable, amounts due from related parties and exploration advances as loans and receivables and accounts payable and accrued liabilities and employee benefits obligations as other financial liabilities.  The carrying values of the Company’s financial investments, other than its available for sale securities, were a reasonable approximation of fair value.  The Company has determined that no adjustments are currently required for transaction costs related to the acquisition of financial assets and financial liabilities that are classified as other than held-for-trading.

Disclosures about the inputs to financial instrument fair value measurements are made within a hierarchy that prioritizes the inputs to fair value measurement.

The three levels of the fair value hierarchy are:

Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

Level 3 – Inputs that are not based on observable market data

- 75 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

e)

Foreign Currency Translation

The Company’s reporting currency is the Canadian dollar.  Transactions in United States (“US”) and Mexican (“MXN”) foreign currencies have been translated into Canadian dollars using the temporal method as follows:

i)

Monetary items at the rate prevailing at the balance sheet date;

ii)

Non-monetary items at the historical exchange rate;

iii)

Revenues and expenses at the average rate in effect during the applicable accounting period; and

iv)

Gains or losses arising on foreign currency translation are included in the statements of loss and deficit.

f)

Cash and Cash Equivalents

Cash includes cash on hand, cash held in trust and demand deposits.  Cash equivalents include short-term, highly liquid investments that are readily convertible to known amounts of cash which are subject to insignificant risk of change and have maturities of three month or less from the date of acquisition, held for the purpose of meeting short-term cash commitments rather than for investing or other purposes.  

g)

Mineral Property Costs

The Company records its interest in mineral properties at cost, less option income realized. The cost of mineral properties and related exploration costs are deferred and capitalized until the properties are brought into production, sold or abandoned. These deferred costs will be amortized on the unit-of-production basis over the estimated useful life of the properties following the commencement of production or are written-off if the properties are sold, allowed to lapse or abandoned. Amounts shown for the mineral property acquisition exploration costs represent costs incurred and are not intended to reflect present or future values. Capitalized costs are subject to measurement uncertainty and it is reasonably possible, based on existing knowledge that changes in future conditions could require a material change in the recorded amounts.

Title to mineral properties involves certain inherent risks due to the difficulties of determining the validity of permits and the potential for problems arising from government conveyance accuracy, prior unregistered agreements or transfers, indigenous land claims, confirmation of physical boundaries, and title may be affected by undetected defects.  The Company does not carry title insurance.  The Company has evaluated title to all of its mineral properties and believes, to the best of its knowledge, that evidence of title is adequate and acceptable given the current stage of exploration.

h)

Equipment

Equipment is recorded at cost and amortized on a straight-line basis over their estimated useful lives at the following rates:

Equipment	10% - 30%
Vehicles	25%

i)

Employee Future Benefits

The Company is subject to Mexican statutory laws and regulations governing employee termination benefits and accrues for employee future benefits based on management’s estimates of the expected payments.

These benefits consist of a one-time payment equivalent to 12 days wages for each year of service (at the employee’s most recent salary, but not to exceed twice the legal minimum wage), payable to all employees with 15 or more years of service, as well as to certain employees terminated involuntarily prior to the vesting of their seniority premium benefit.

- 76 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

2.

SIGNIFICANT ACCOUNTING POLICIES (Continued)

i)     Employee Future Benefits (Continued)

Under Mexican Labour Law, the Company also provides statutorily mandated severance benefits to its employees terminated under certain circumstances. Such benefits consist of a one-time payment of three months wages plus 20 days wages for each year of service payable upon involuntary termination without just cause.

Employee future benefits are unfunded.

j)      Impairment of Long-Lived Assets

The Company periodically evaluates the recoverability of its long-lived assets whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An impairment loss is recognized when estimated future cash flows resulting from the use of an asset and its eventual disposition is less than its carrying amount.

A mining enterprise in the exploration stage is not obliged to conclude that capitalized costs have been impaired due to the absence of a projected estimated future net cash flow from the mining enterprise. Mineral properties in the exploration stage do not have established mineral reserves and a basis for the preparation of a projection of the estimated future net cash flow from the properties does not exist. However, a mining enterprise is required to consider the conditions for impairment write-down. The conditions include significant unfavourable economic, legal, regulatory, environmental, political and other factors. In addition management’s development activities towards its planned principal operations are a key factor considered as part of the ongoing assessment of the recoverability of the carrying amount of mineral properties. Whenever events or changes in circumstances indicate that the carrying amount of a mineral property in the exploration stage may be impaired the capitalized costs is written down to the estimated recoverable amount.

k)

Asset Retirement Obligations

The Company applies CICA accounting standard 3110 – “Asset Retirement Obligations” to account for the obligations to reclaim and remediate the mineral properties.  Under the standard, the estimated fair value of the legal obligations are recognized in the period incurred, at the net present value of the cash flows required to settle the future obligations. A corresponding amount is capitalized to the related asset.  Asset retirement obligations are subject to accretion over time for increases in the fair value of the liabilities.

As of August 31, 2011, the Company had determined that there were no significant legal obligations for reclamation and remediation costs.  The Company’s estimates of its ultimate asset retirement obligations could change as a result of changes in regulations, the extent of environmental remediation required, and the means of reclamation or cost estimates.  Changes in estimates are accounted for prospectively from the period estimates are revised.  

l)

Share Capital

i)

Non-monetary consideration – The fair value of the shares issued is based on the trading price of those shares on the TSX.V on the grant date determined by the Board of Directors. Agent’s warrants, stock options and other equity instruments issued in non-monetary transactions are recorded at fair value determined by management using the Black-Scholes option pricing model. Proceeds from unit placements are allocated between shares and warrants using the residual method.

ii)

Stock based compensation – Compensatory stock option transactions with directors, officers, employees and outside consultants are charged to operations or capitalized to mineral properties with an offsetting credit to contributed surplus. Stock options which vest immediately are recorded at the date of grant. Stock options issued to directors, officers and employees that vest over time are valued at the grant date and recorded using the straight line method over the vesting period. Stock options issued to consultants that vest over time are valued at each vesting date as services are rendered. Consideration received on the exercise of stock options together with the related portion previously recorded in contributed surplus is credited to share capital.

- 77 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

2.     SIGNIFICANT ACCOUNTING POLICIES (Continued)

i)

Share Capital (Continued)

iii)

Share issuance costs – Costs directly identifiable with the raising of share capital financing are charged against share capital.  Share issuance costs incurred in advance of share subscriptions are recorded as non-current deferred assets.  Share issuance costs related to uncompleted share subscriptions are charged to operations.

(m)

Earnings (Loss) Per Share

Earnings (loss) per share are calculated based on the weighted average number of shares outstanding. The Company uses the treasury stock method to compute the dilutive effect of options, warrants and other similar instruments. Under this method, the dilutive effect on earnings per share is calculated to reflect the use of the proceeds that could be obtained upon the exercise of options and warrants. It assumes that the proceeds would be used to purchase common shares at the average market price during the period. Basic and diluted losses per share are equal as the assumed conversion of outstanding options and warrants would be anti-dilutive.

n)

Income Taxes

Income taxes are calculated using the liability method of accounting.  Temporary differences arising from the difference between the tax basis of an asset or liability and its carrying amount on the balance sheet are used to calculate future income tax liabilities or assets.  Future tax assets are recognized to the extent that they are considered more likely than not to be realized.  Future income tax liabilities or assets are calculated using the tax rates anticipated to apply in the periods that the temporary differences are expected to reverse.  Valuation allowances are provided when unrecognized net future income tax assets are not more likely than not to be realized.

o)

Future Accounting Pronouncements Not Yet Adopted

i)   Consolidated Financial Statements

In January 2009, the CICA issued Handbook Section 1601, Consolidated Financial Statements, and Handbook Section 1602, Non-Controlling Interests, which together replace Handbook Section 1600, Consolidated Financial Statements.  These two sections are equivalent to the corresponding provisions of International Accounting Standard 27, Consolidated and Separate Financial Statements (January 2008).  Handbook Section 1602 applies to the accounting for non-controlling interests and transactions with non-controlling interest holders in consolidated financial statement.  The new sections require that, for each business combination, the acquirer measure any non-controlling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s identifiable net assets.  The new sections also require non-controlling interests to be presented as a separate component of shareholders’ equity.

Under Handbook Section 1602, non-controlling interest income is not deducted in arriving at consolidated net income or other comprehensive income.  Rather, net income and each component of other comprehensive income are allocated to the controlling and non-controlling interest based on relative ownership interests.  These Sections apply to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011, and should be adopted concurrently with Section 1582.  

- 78 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

2.      SIGNIFICANT ACCOUNTING POLICIES (Continued)

o)

Future Accounting Pronouncements Not Yet Adopted (Continued)

ii)   Business Combinations

In January 2009, the CICA issued Handbook Section 1582, Business Combinations, which replaces Section 1581, Business Combinations, and provides the equivalent to International Financial Reporting Standards (“IFRS”) 3R, Business Combinations (January 2008).  The new section expands the definition of a business subject to an acquisition and establishes significant new guidance on the measurement of consideration given, and the recognition and measurement of assets acquired and liabilities assumed in a business combination.  The new section requires that all business acquisitions be measured at the full fair value of the acquired entity at the acquisition date even if the business combination is achieved in stages, or if less than 100% of the equity interest in the acquiree is owned at the acquisition date.

The measurement of equity consideration given in a business combination will no longer be based on the average of the fair value of the shares a few days before and after the day the terms and conditions have been agreed to and the acquisition announced, but rather at the acquisition date. Subsequent changes in the fair value of contingent consideration classified as a liability will be recognized in earnings and not as an adjustment to the purchase price.  Restructuring and other direct costs of a business combination are no longer considered part of the acquisition accounting.  Instead, such costs will be expensed as incurred, unless they constitute the costs associated with issuing debt or equity securities.  

These sections apply prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011.  Earlier adoption is permitted.  This new section will only have an impact on consolidated financial statements for future acquisitions that may be made in periods subsequent to the date of adoption.

iii)

International Financial Reporting Standards (“IFRS”)

Canada’s Accounting Standards Board ratified a plan that will result in Canadian GAAP being converged with International Financial Reporting Standards (“IFRS”) by 2011.  Management has performed a preliminary analysis and highlighted areas where its current Canadian accounting practices differ from IFRS.  No significant impact to the Company’s financial statements is expected.

p)

Comparative Figures

Certain of the prior year’s comparative figures have been reclassified to conform to the current year’s presentation.

3.

SHORT-TERM INVESTMENTS

As at August 31, 2011, short–term investments in the amount of $2,461,232 (2010 - $1,650,000) were comprised of investments in Canadian guaranteed investment certificates maturing $1,850,000 on April 4, 2012 and $600,000 on May 14, 2012 with accrued interest of $11,232 and effective interest rates of 1.2% (2010 – 0.8%).   

4.

MARKETABLE SECURITIES

Available for sale securities consist of 375,000 common shares of Comstock Metals Ltd., a publicly traded company, with a fair value of $65,625.

Available-for-sale securities are measured at fair value with changes in fair value recorded in other comprehensive income (loss) until the investment is derecognized or impaired at which time the gain (loss) would be recorded in net income.

- 79 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

5.

ACCOUNTS RECEIVABLE

Accounts receivable consist of the following:

	2011	2010
Sales taxes recoverable	$     16,183	$     13,248
Interest receivable	-	6,582
Other receivable	1,074	14,212
	$     17,257	$     34,042

6.

MINERAL PROPERTY ACQUISITION AND EXPLORATION COSTS

Detailed exploration expenditures incurred in respect to the Company’s mineral property interests owned, leased or held under option are disclosed in Note 16. Property payments made on the Company’s mineral property interests during the years ended August 31, 2011, 2010 and 2009 are included in the property descriptions below.

San Timoteo, Oro Leon, Nueva Union, La Reforma	$	69,257
Oteros, La Esperanza, La Hermosa		-
Bufalo, La Barranca		-
Los Hilos, Las Bolas, El Manto, Don Lazaro, La Verde		187,123
Nopalera, Flor de Trigo		78,393
Corona, Beck, El Chamizal, El Canario, La Cruz		-
Las Trojas, La Gloria, Todos los Santos, Los Cantiles		-
	$	334,773

The Company has an extensive property portfolio of mining concessions, acquired mainly through staking, in the Uruachic District of Mexico covering approximately 10,000 hectares. The Company has various net smelter returns on specific claims forming a part of the Company’s properties. The net smelter returns range from 1% to 3%, which have buyouts ranging from US$250,000 to US$2,000,000.

In April 2007, the Company signed an agreement to acquire the Todos los Santos 50 hectare mining concession for approximately $25,000. As of August 31, 2011 the Company had paid $9,754 to bring the property into good standing with the Mexican authorities, a total of $15,000 to complete the acquisition and incurred $7,921 in expenditures on the property.

In May 2007 and amended April 2011, the Company optioned the Corona and El Chamizal properties to a company which undertook to spend $500,000 and $200,000 on the respective properties over a period of three years and issue 400,000 (150,000 shares received) and 150,000 (25,000 shares received) shares respectively to the Company over a period of two years. In order to keep the option in good standing, the optionee must also pay $50,000 (received) and issue 200,000 shares to the company (received).

During the year ended August 31, 2011, $118,769 (2010 - $74,298; 2009 - $1,435,660) in deferred expenditures related to certain mineral claims were written off.  While the Company will continue to hold these claims, management currently do not view them as priorities and intends to conduct limited exploration activities on these claims in the next year.

- 80 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

7.     PROPERTY AND EQUIPMENT

	2011
			ACCUMULATED
	COST		AMORTIZATION	NET
Equipment	$	146,041	54,823	91,218
Vehicles		101,610	70,497	31,113
Land		18,917	-	18,917
	$	266,568	125,320	141,248

	2010
			ACCUMULATED
	COST		AMORTIZATION	NET
Equipment	$	81,996	42,187	39,809
Vehicles		91,416	57,078	34,338
Land		18,917	-	18,917
	$	192,329	99,265	93,064

8.

SHARE CAPITAL

Authorized

The authorized share capital of the Company consists of an unlimited number of common shares without par value.

Issued and Fully Paid

As at August 31, 2011, the Company had 92,216,445 (2010 – 80,655,503) common shares issued and fully paid.

During the year ended August 31, 2010, the Company completed:

a)  a non-brokered private placement of 12,641,466 units at a price of $0.15 per unit. Each unit consisted of one share and one half of one non-transferable share purchase warrant exercisable for a period of two years at a price of $0.25 for each warrant.

Once resale restrictions on the shares expire and upon the Company’s shares trading at or above a weighted average trading price of $0.40 for 20 consecutive trading days, the Company may give notice that the warrants will expire 30 days from the date of providing such notice. The Company’s agents received a commission of $112,500 in cash and 742,000 agent’s warrants exercisable at $0.25 per share for two years valued at $78,994 (risk-free interest rate of 2.24%, dividend yield of Nil, volatility factor of 130.38%, an expected life of 2 years).

b)  a non-brokered private placement of 7,080,000 units at a price of $0.15 per unit. Each unit consisted of one share and one half of one non-transferable share purchase warrant exercisable for a period of two years at a price of $0.25 for each warrant.

Once resale restrictions on the shares expire and upon the Company’s shares trading at or above a weighted average trading price of $0.40 for 20 consecutive trading days, the Company may give notice that the warrants will expire 30 days from the date of providing such notice. The Company’s agents received a commission of $51,360 in cash and 342,400 agent’s warrants exercisable at $0.25 per share for two years valued at $36,670 (risk-free interest rate of 2.24%, dividend yield of Nil, volatility factor of 131.22%, an expected life of 2 years).

Warrants

As at August 31, 2011, there were NIL (2010 – 10,945,133) share purchase warrants outstanding.

- 81 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

8.

SHARE CAPITAL (Continued)

Warrants (Continued)

A summary of changes in share purchase warrants is presented below:

	NUMBER OF	EXERCISE
	WARRANTS	PRICE
Outstanding and exercisable at August 31, 2009	-	-
Warrants granted	10,945,133	$0.25
Outstanding and exercisable at August 31, 2010	10,945,133	$0.25
Warrants exercised	(10,885,942)	$0.25
Warrants expired	(59,191)	$0.25
Outstanding and exercisable at August 31, 2011	-	-

Stock Options

During the year ended on August 31, 2011, no stock options were granted to directors and employees of the Company.

On May 7, 2010, the Company granted 2,325,000 incentive stock options to directors and employees of the Company and 375,000 incentive stock options to consultants of the Company, at a price of $0.25 per share, exercisable for a period of five years.

In December 2008, the Company granted 925,000 incentive stock options to directors and employees of the Company, at a price of $0.10 per share, exercisable for a period of five years.

On April 24, 2009, the Company granted 225,000 incentive stock options to Consultants of the Company, 75,000 at a price of $0.10 per share and 150,000 at a price of $0.12 per share, exercisable for a period of five years.

Stock based compensation on options granted during the year ended August 31, 2010 amounted to $492,137 (2009 - $57,507). The fair value for options was estimated at the date of grant using a Black-Scholes option pricing model with the following weighted average assumptions: risk-free interest rate of 2.55%  (2009 – 1.60%) dividend yield of nil, volatility factor of 103% (2009 – 107%), and a weighted average expected life of the options of 5 years.

A summary of changes in stock options is presented below:

		WEIGHTED
	NUMBER	AVERAGE
	OF	EXERCISE
	SHARES	PRICE
Balance, August 31, 2009	5,470,000	$  0.31
Expired	(515,000)	0.30
Granted	2,700,000	0.25
Cancelled	(230,000)	0.35
Balance, August 31, 2010	7,425,000	$  0.29
Expired	(2,050,000)	0.36
Exercised	(675,000)	0.18
Balance, August 31, 2011	4,700,000	$  0.27

- 82 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

8.

SHARE CAPITAL (Continued)

Stock Options (Continued)

The following summarizes information about stock options outstanding at August 31, 2011:

OPTIONS OUTSTANDING				OPTIONS EXERCISABLE
	WEIGHTED				WEIGHTED
	AVERAGE	WEIGHTED			AVERAGE	WEIGHTED
NUMBER	REMAINING	AVERAGE	NUMBER		REMAINING	AVERAGE
OF	CONTRACTUAL	EXERCISE	OF		CONTRACTUAL	EXERCISE
OPTIONS	LIFE	PRICE	OPTIONS		LIFE	PRICE
4,700,000	2.63 years	$ 0.27	4,700,000		2.63 years	$ 0.27

9.

FINANCIAL INSTRUMENTS

A financial instrument is any contract that gives rise to a financial asset of one party and a financial liability or equity instrument of another party.  A financial asset is any asset that is i) cash; ii) a contractual right to receive cash or another financial asset from another party; iii) a contractual right to exchange financial instruments with another party under conditions that are potentially favourable to the entity; or iv) an equity instrument of another entity.  A financial liability is any liability that is a contractual obligation to i) deliver cash or another financial asset to another party; or ii) exchange financial instruments with another party under conditions that are potentially unfavourable to the entity.  An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities.

Financial Instrument Risk Exposure and Risk Management

The Company is exposed in varying degrees to a variety of financial instrument related risks.  The Board of Directors approves and monitors the risk management process.  The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Company’s competitiveness and flexibility. The types of risk exposure and the way in which such exposure is managed is provided as follows:

Credit Risk

The Company is primarily exposed to credit risk on its bank accounts.  Credit risk exposure is limited by placing its cash with high-credit quality financial institutions in Canada.

Liquidity Risk

The Company ensures that there is sufficient capital in order to meet short term business requirements, after taking into account the Company’s holdings of cash.  The Company believes that these sources will be sufficient to cover the expected short and long term cash requirements.  

Market Risk

The significant market risk exposures to which the Company is exposed are foreign exchange risk, interest rate risk, and commodity price risk.

Foreign Currency Risk

The Company has operations in Canada and Mexico subject to foreign currency fluctuations.  The Company’s operating expenses are incurred in Canadian dollars and Mexican pesos, and the fluctuation of the Canadian dollar in relation to the Mexican peso will have an impact upon the results of operations of the Company and may also affect the value of the Company’s assets and the amount of shareholders’ equity.  The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks.

- 83 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

9.

FINANCIAL INSTRUMENTS (Continued)

       Foreign Currency Risk (continued)

Financial assets and liabilities denominated in currencies other than the Canadian dollar were as follows:

	AUGUST 31, 2011
	Financial	Financial
	Assets	Liabilities
Mexican Peso	$   129,865	$  114,233

Based on the above net exposures at August 31, 2011, and assuming that all other variables remain constant a 10% appreciation or depreciation of the Canadian Dollar against the Mexican Peso would have resulted in an increase/decrease of $1,500 in the Company’s loss from operations.

Interest Rate Risk

As at August 31, 2011, the Company has no significant exposure to interest rate risk through its financial instruments.

10.

CAPITAL DISCLOSURES

The Company was formed for the purpose of acquiring exploration and development stage natural resource properties.  The directors determine the Company’s capital structure and make adjustments to it based on funds available to the Company, in order to support the acquisition, exploration and development of mineral properties.  The directors have not established quantitative return on capital criteria for capital management.

The Company is dependent upon external financing to fund future exploration programs and its administrative costs. The Company will spend existing working capital and raise additional amounts as needed.  The Company will continue to assess new properties and to seek to acquire an interest in additional properties if management feels there is sufficient geologic or economic potential provided it has adequate financial resources to do so.

The directors review the Company’s capital management approach on an ongoing basis and believe that this approach, given the relative size of the Company, is reasonable. The Company’s objective when managing capital is to safeguard the Company’s ability to continue as a going concern.

The Company considers the items included on the balance sheet in shareholders’ equity as capital.  The Company manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of the underlying assets.  In order to maintain or adjust the capital structure, the Company may issue new shares through private placements, sell assets to reduce debt or return capital to shareholders.  The Company is not subject to externally imposed capital requirements.

11.    RELATED PARTY TRANSACTIONS

a)

During the year ended August 31, 2011, the Company paid $120,000 (2010 and 2009 - $120,000) as management fees for geological and management services to a company controlled by a director.

b)

During the year ended August 31, 2011, the Company paid $41,188 (2010 - $40,993, 2009 - $44,020) in wages and benefits to a director.

- 84 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

11.    RELATED PARTY TRANSACTIONS

c)

During the year ended August 31, 2011, the Company paid $42,579 (2010 - $47,689, 2009 - $53,330) in respect of corporate office and administration and other costs to a management company controlled by a director of the Company.

d)

During the year ended August 31, 2011, the Company paid $60,000 (2010 and 2009 - $60,000) in consulting fees to a director of the Company.

e)

Due from related parties consist of $90 (2010 - $21,108, 2009 - $Nil) due from companies controlled by a director. Accounts receivable include $86 (2010 - $575) due from a director. Accounts payable and accrued liabilities include $4,084 (2010 - $Nil) due to a director and officer.

12.  INCOME TAXES

The Company is subject to income taxes on its unconsolidated financial statements in Canada and Mexico.  The consolidated provision for income taxes varies from the amount that would be computed from applying the combined statutory income tax rates to the net loss before taxes were approximately as follows:

	2011	2010
Combined statutory tax rate	27%		29%
Expected income tax recovery	$      (273,000)	$	(410,000)
Non-deductible differences	-		143,000
Future Income tax expense resulting from change in tax rate	68,000		(141,000)
Effect of changes in tax rate	(13,000)		(3,000)
Tax benefits not recognized	218,000		411,000
Income tax provision	$                  -	$	-

The significant components of the Company’s future income tax assets were approximately as follows:

	2011	2010
Capital assets	$         27,000	$	19,000
Mineral properties	642,000		770,000
Losses available for future periods	2,597,000		2,440,000
Share issue costs	25,000		39,000
Valuation allowance	(3,291,000)		(3,268,000)
Net future income tax asset	$                  -	$	-

The Company has Canadian and Mexican non-capital losses of approximately $9,921,000 which may be carried forward and applied against taxable income in future years.  These losses expire as follows:

CANADA			MEXICO
2014	$	354,000	2012	$	1,030,000
2015		362,000	2013		1,074,000
2026		404,000	2014		424,000
2027		535,000	2015		124,000
2028		530,000	2016		219,000
2029		515,000	2017		1,512,000
2030		667,000	2018		192,000
2031		610,000	2019		215,000
			2020		241,000
			2021		313,000
	$	3,977,000		$	5,344,000

- 85 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

13.    SEGMENTED INFORMATION

The Company has one operating segment, which is mineral exploration.  All mineral properties are located in Mexico.  All option proceeds are attributable to the Mexican mineral properties. Assets by geographic segment, at cost, are as follows:

	CANADA		MEXICO		TOTAL
August 31, 2011
Current assets	$	2,774,028	$	55,291	$	2,829,319
Equipment	$	64,236	$	77,012	$	141,248
Mineral property costs	$	-	$	8,981,467	$	8,981,467
Total assets	$	2,838,264	$	9,184,344	$	12,022,608
Interest income	$	17,625	$	6	$	17,631
Net loss	$	562,286	$	449,499	$	1,011,785
August 31, 2010
Current assets	$	1,942,553	$	31,326	$	1,973,879
Equipment	$	10,656	$	82,407	$	93,064
Exploration advances	$	-	$	35,496	$	35,496
Mineral property costs	$	-	$	8,089,770	$	8,089,770
Total assets	$	1,953,210	$	8,279,017	$	10,232,227
Interest income	$	12,440	$	-	$	12,440
Net loss	$	1,077,853	$	323,756	$	1,412,984

14.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP

The consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in Canada (“Canadian GAAP”) that differ in certain material respects from accounting principles generally accepted in the United States (“US GAAP”).  The major differences between Canadian and US GAAP, which affects the Company’s financial statements, are described below and the effect on the financial statements is summarized as follows:

CONSOLIDATED BALANCE SHEETS

		2011		2010		2009
				(restated – Note 14a)		(restated – Note 14a)
ASSETS
Total Assets, Canadian GAAP	$	12,022,608	$	10,232,227	$	8,222,221
Deferred Mineral Property Exploration Costs		(8,646,694)		(7,754,997)		(7,007,530)
Total Assets, US GAAP	$	3,375,914	$	2,477,230	$	1,214,691
LIABILITIES
Total Liabilities, Canadian and US GAAP	$	173,927	$	202,372	$	65,879
SHAREHOLDERS’ EQUITY
Share Capital and Contributed Surplus, Canadian and US GAAP	$	26,829,450	$	23,989,464	$	20,702,967
Deficit and Accumulated Other Comprehensive Income, US GAAP		(23,627,463)		(21,714,606)		(19,554,155)
Shareholders’ Equity, US GAAP	$	3,201,987	$	2,274,858	$	1,148,812
	$	3,375,914	$	2,477,230	$	1,214,691

- 86 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

14.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP (Continued)

CONSOLIDATED STATEMENTS OF LOSS

		2011		2010		2009
				(restated - Note 14a)		(restated – Note 14a)
Loss for the year under Canadian GAAP	$	(1,011,785)	$	(1,412,984)	$	(2,196,183)
Mineral exploration expenditures		(1,010,466)		(821,765)		(993,581)
Write down of mineral property exploration costs		118,769		74,298		1,435,660
Loss under US GAAP		(1,903,482)		(2,160,451)		(1,754,104)
Weighted average number of common shares outstanding under US GAAP		85,749,549		72,302,874		60,934,037
Loss per share under US GAAP	$	(0.02)	$	(0.03)	$	(0.03)

       CONSOLIDATED STATEMENTS OF CASH FLOWS

	2011		2010		2009
				(restated – Note 14a)		(restated – Note 14a)
Cash flows used in operating activities
Under Canadian GAAP	$	(886,053)	$	(710,084)	$	(721,124)
Mineral exploration expenditures		(1,100,965)		(739,498)		(1,365,900)
Cash used for operating activities under US GAAP	$	(1,987 ,018)	$	(1,449,582)	$	(2,087,024)
Cash flows from financing activities
Under Canadian and US GAAP	$	2,839,986	$	2,794,360	$	-
Cash flows (used in) from investing activities
Under Canadian GAAP	$	(1,925,203)	$	(2,077,413)	$	771,074
Mineral exploration expenditures		1,100,965		739,498		1,365,900
Cash (used in) from investing activities under US GAAP	$	(824,238)	$	(1,337,915)	$	2,136,974

a)   

Acquisition of Mineral Properties and Capitalized Exploration Costs

Under Canadian GAAP both acquisition and exploration expenditures are capitalized. Under US GAAP in accordance with Emerging Issues Task Force (“EITF”) No. 04-02 – “Whether Mineral Rights are Tangible or Intangible Assets”, mineral property acquisition costs are capitalized and mineral property exploration expenditures are expensed for periods ending after April 1, 2004. For US GAAP, the Company has expensed all mineral property exploration expenditures.  The accounts for 2010 and 2009 have been restated for acquisition costs of $334,773 previously reported as a difference between Canadian and US GAAP.  

- 87 –

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

14.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP (Continued)

b)   

Cumulative Since Inception Disclosure

The Company is not required and has opted to not report such information for Canadian reporting and for US GAAP purposes; the Company is considered an exploration stage company.  Statement of Financial Accounting Standards No. 7 – “Accounting and Reporting by Development Stage Enterprises” requires the disclosure of cumulative-to-date information for each line item on the statements of operations and cash flow plus annual summaries of each component of shareholders’ equity since inception.  Under Canadian GAAP, Accounting Guideline “AcG 11 – Enterprises in the Development Stage”, issued by the Canadian Institute of Chartered Accountants, does not require reporting of this information.  Had the consolidated financial statements been prepared in accordance with US GAAP such information would have been disclosed.

c)   

Recent United States Accounting Pronouncements

In June 2009, the Financial Accounting Standards Board ("FASB") issued new accounting standards related to its accounting standards codification of the hierarchy of generally accepted accounting principles. The new standard is the sole source of authoritative generally accepted accounting principles of the United States (“U.S. GAAP”) to be applied by nongovernmental entities. Rules and interpretive releases of the Securities and Exchange Commission (“SEC”) under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. The Codification superseded non-SEC accounting and reporting standards. All accounting literature that is not in the Codification, not issued by the SEC and not otherwise grandfathered is non-authoritative. The new standard is effective for the Company’s interim quarterly period beginning September 1, 2009.  

In June 2009, the FASB issued new accounting standards to address the elimination of the concept of a qualifying special purpose entity which also replaces the quantitative-based risks and rewards calculation for determining which enterprise has a controlling financial interest in a variable interest entity with an approach focused on identifying which enterprise has the power to direct the activities of a variable interest entity and the obligation to absorb losses of the entity or the right to receive benefits from the entity. Additionally, this standard provides more timely and useful information about an enterprise’s involvement with a variable interest entity. The standard will become effective in the first quarter of the Company’s fiscal 2010. We are currently evaluating the impact of this standard on our consolidated financial statements.

In May 2009, FASB issued new accounting standards on subsequent events that established general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. Specifically, it provides (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements, and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. The new standard is effective for interim or annual periods ending after June 15, 2009.  The Company has evaluated all subsequent events through December 22, 2009. The adoption of this standard did not have a material effect on the Company’s financial statements.

In January 2010, FASB issued an amendment that requires new disclosures for fair value measurements made within fair value measurement hierarchy and provides clarification of existing disclosure requirements.  This update requires (a) an entity to dispose separately the amounts of significant transfers in and out of Levels 1 and 2 fair value measurements and to describe the reasons for transfers; and (b) information about purchases, sales, issuance and settlements to be presented separately (that is on a gross basis rather than net) in the reconciliation of fair value measurement using significant unobservable inputs (Level 3 inputs).  This update clarifies existing disclosure requirements for the level of disaggregation of classes of assets and liabilities measured at fair value, and it requires disclosure about inputs and valuation techniques used to measure fair value for both recurring fair value measurement using Level 2 and Level 3 inputs.  This application of this standard had no impact on the Company’s financial statements.  

- 88 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

14.    DIFFERENCES BETWEEN CANADIAN AND UNITED STATES GAAP (Continued)

c)   

Recent United States Accounting Pronouncements (Continued)

In July 2011, FASB issued amendments to the reporting comprehensive income (loss) that all non-owner changes in stockholders’ equity be presented either in a single continuous statement of comprehensive income (loss) or in two separate but consecutive statements.  In the two-statement approach, the first statement should present total net income (loss) and its components followed consecutively by a second statement that should present total other comprehensive income (loss), the components of the other comprehensive income (loss), and the total of comprehensive income (loss).  The amendments un this update should be applied retrospectively.  For public entities, the amendments are effective for fiscal years, and interim periods within those years, beginning after December 15, 2011.  The Company adopted this accounting policy with no impact on its financial statements.  

15.   SUBSEQUENT EVENTS

a)

The Company signed the final Earn-in and Shareholders Agreement with a Mexican subsidiary of Agnico-Eagle Mines Limited (“Agnico”) for the exploration and development of the Company’s Las Bolas/Los Hilos property.  Under the terms of the agreement, which is subject to conditions, including TSX-V approval, Agnico’s Mexican subsidiary has the right to earn a 51% interest in the property by spending $5,000,000 on the property over a period of 5 years. The first year’s work commitment is a firm commitment of $500,000 with expenditure requirements increasing each year thereafter. Upon exercising its option, Agnico will have the right to earn an additional 20% interest by spending $4 million over another period of four years and completing a feasibility study or by spending $10 million over a longer period of eight years

b)

The Company signed an agreement for the sale of its interest in the Beck mining concession to a Mexican company for proceeds of US$50,000 and a 0.25% NSR on the mining concession.

- 89 -

GOLDEN GOLIATH RESOURCES LTD.

(An Exploration Stage Company)

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

YEARS ENDED AUGUST 31, 2011, 2010 AND 2009

(Expressed in Canadian Dollars)

16.    MINERAL PROPERTY EXPLORATION EXPENSES

	San Timoteo Oro Leon Nueva Union La Reforma		Oteros La Esperanza La Hermosa		Bufalo La Barranca		Los Hilos   Las Bolas El Manto Don Lazaro La Verde		­ Nopalera Flor de Trigo		Corona El Chamizal Beck El Canario La Cruz		Las Trojas La Gloria Todos los Santos Los Cantiles		Total
Balance, August 31, 2009	$	3,679,972	$	15,549	$	39,982	$	2,866,997	$	277,671	$	65,181	$	62,178	$	7,007,530
Incurred during the year
Assaying		--		--		--		132,869		504		--		--		133,373
Drilling		--		--		--		135,984		--		--		--		135,984
Geology and mapping		220		--		--		109,609		--		--		514		110,343
Property taxes and passage rights		12,928		2,506		20,380		3,156		7,146		10,876		1,839		58,831
Travel		12,318		--		--		13,459		850		1,586		825		29,038
Road construction and site preparation		3,637		--		--		53,902		9,456		--		--		66,995
Facilities and other		41,619		--		--		170,754		33,428		29,981		11,419		287,201
		70,722		2,506		20,380		619,733		51,384		42,443		14,597		821,765
Write down		--		(18,055)		--		(5,202)		--		--		(51,041)		(74,298)
Balance, August 31, 2010		3,750,694		--		60,362		3,481,528		329,055		107,624		25,734		7,754,997
Incurred during the year
Assaying		--		--		--		104,137		112,947		--		--		217,084
Drilling		--		--		--		266,099		--		--		--		266,099
Geology and mapping		652		--		--		17,907		28,781		--				47,340
Property taxes and passage rights		15,024		4,974		21,366		5,270		8,024		707		3,363		58,728
Travel		9,714		--		--		6,787		9,518		2,117		121		28,257
Road construction and site preparation		--		--		--		42,316		38,835		649		3,099		84,899
Facilities and other		40,750		--		--		123,781		158,697		35,676		18,445		377,349
Option payment received		--		--		--		--		--		(69,290)		--		(69,290)
		66,140		4,974		21,366		566,297		356,802		(30,141)		25,028		1,010,466
Write down		(82,279)		(4,974)		--		(15,913)		--		--		(15,603)		(118,769)
Balance, August 31, 2011	$	3,734,555	$	--	$	81,728	$	4,031,912	$	685,857	$	77,483	$	35,159	$	8,646,694

- 90 -

SIGNATURE PAGE

Pursuant to the requirements of Section 12g of the Securities Exchange Act of 1934, the Registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Second Amendment to the Annual Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Golden Goliath Resources Ltd.; SEC File Number 0-31204

Registrant

Dated: August 10, 2012    By /s/ J. Paul Sorbara____________________________

                                   J. Paul Sorbara, President/Director

- 91 -

EX-4

EARN-IN AND SHAREHOLDERS AGREEMENT

THIS AGREEMENT is made as of the 8th day of December, 2011,

BETWEEN:

AGNICO-EAGLE MINES LIMITED,an Ontario corporation

(hereinafter called “AEM”)

AND:

GOLDEN GOLIATH RESOURCES LTD., a British Columbia corporation

(hereinafter called “GGR”).

WHEREAS:

A.

GGR, through its wholly owned subsidiary Minera Delta, holds the Properties (as hereinafter defined) constituting the Los Hilos Project in Chihuahua, Mexico;

B.

AEM will incorporate OpCo and GGR will procure the transfer of title to the Properties to it;

C.

AEM and GGR have incorporated the Company to hold, directly and indirectly, 100% of the issued and outstanding shares of OpCo; and

D.

AEM and GGR are or will be the Shareholders of the Company and have agreed to enter into this Agreement to, amongst other things, govern their rights and responsibilities as such and the management and governance of the Company.

NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the covenants and conditions contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged and intending to be legally bound, the parties hereto agree as follows:

1.

INTERPRETATION; CONDITIONS

1.1

Definitions

In this Agreement the following terms shall have the meanings respectively:

(a)

“Accepting Assignee” is defined in Section 19.4.

(b)

“Accounting Procedure” means the procedure set forth in Schedule B.

(c)

“Adopted Program and Budget” means each Program and Budget that is adopted or deemed adopted by the Board pursuant to Section 10.4.

(d)

“Affiliate” means any person, partnership, limited liability company, joint venture, corporation, or other form of enterprise which directly or indirectly Controls, or is Controlled by or is under common Control with, a Party, but does not include the Company as an Affiliate of any Shareholder unless specifically provided in the applicable reference.

(e)

“Agreement” means this Earn-In and Shareholders Agreement, together with all Schedules hereto, which are incorporated by this reference, and all amendments hereto and modifications hereof.

(f)

“Applicable Accounting Standards” means the International Financial Reporting Standards as issued and amended from time to time by the International Accounting Standards Board and interpretations thereof of the International Financial Reporting Interpretations Committee.

(g)

“Area of Interest” has the meaning assigned to it in Section 19.1 and 19.2.

(h)

“Assets” means the Concessions and all Products, Existing Data, and all other real and personal property, tangible and intangible, including existing or after-acquired properties and all contract rights held by OpCo or held by the Company or a Shareholder for the benefit of OpCo hereunder.

(i)

“Board” means the board of directors of the Company.

(j)

“Budget” means a reasonably detailed estimate of all costs to be incurred by the Company with respect to a Program and a schedule of contributions of additional equity (or, if authorized by the Board, loans) to be made by the Shareholders.

(k)

“Budget Period” means the annual period commencing on January 1 each year, unless the Board establishes a different period.

(l)

“Business” means the conduct of the business of the Company in furtherance of the purposes set forth in Section 2.1 and in accordance with this Agreement.

(m)

“Business Account” means the account maintained by the General Manager for the Business in accordance with Schedule B.

(n)

“Cash Available for Distribution” has the meaning assigned to it in Section 12.4.

(o)

“Company” means 0923144 B.C. Ltd., a corporation incorporated under the Laws of British Columbia to hold the shares of OpCo.

(p)

“Concessions” means the mining concessions located at the Municipality of Uruachi, Chihuahua, and registered in favor of Minera Delta at the Public Registry of Mines more particularly described in Part 1 of Schedule A.

(q)

“Control” used as a verb means, when used with respect to an entity, the ability, directly or indirectly through one or more intermediaries, to direct or cause the direction of the management and policies of such entity through (i) the legal or beneficial ownership of voting securities or Ownership Interests; (ii) the right to appoint managers, directors or corporate management; (iii) contract or agreement; (iv) voting trust; or otherwise; and, when used with respect to a person, means the actual or legal ability to control the actions of another, through family relationship, agency, contract or otherwise; and “Control” used as a noun means an interest which gives the holder the ability to exercise any of the foregoing powers.

(r)

“Default Loan” means a loan made by one Shareholder to another Shareholder pursuant to Section 11.1(a).

(s)

“Development” means all preparation for the removal and recovery of Products from the Properties, including the construction or installation of a mill (if any), processing plant, crushers, leach pads, pipelines, roads, power and water lines, stations and facilities, camps, waste dumps, tunnels, access ways, adits, shafts, haulage ways, and other facilities and improvements, both surface and underground, to be used for the mining, handling, crushing, milling, processing, treating, haulage, leaching, or other beneficiation of Products or needed for the construction or operation of the Properties, regardless of the methods of mining and processing employed.

(t)

“Diluting Shareholder” means a Shareholder who elects not to participate in an Adopted Program and Budget to the full extent of its Ownership Interest as described in Section 10.6.

(u)

“Effective Date” means the later of:

(i)

the TSX-V Approval Date;

(ii)

the date on which the actions described in Sections 1.7(a)(i) and 1.7(a)(ii) (but for greater certainty not Section 1.7(a)(iii)) have been completed.

(v)

“Effective Interest Rate” means a rate per annum, determined from time to time, equal to the LIBOR in effect on the first business day of each calendar month, plus two percent.  The Effective Interest Rate shall be determined for each full or partial calendar month in which interest accrues under any obligation to which it applies pursuant to this Agreement or any note or other instrument executed pursuant hereto, and shall apply to all interest obligations accruing in such month.  As used in this definition, “business day” means a day on which the London and New York banks are open for business and on which a quotation of the LIBOR may be obtained.

(w)

“Encumbrance” or “Encumbrances” means any and all mortgages, charges, deeds of trust, security interests, pledges, liens, royalties, net profits interests or overriding royalty interests, other payments out of production, or other encumbrances of any nature.  The term shall not, however, include any statutory lien for taxes, payments to workers, material suppliers or the like, for payments not yet due or which are being contested in good faith, conditions of any permit obtained in compliance with Laws, or Laws of general applicability, including without limitation any zoning or similar Laws.

(x)

“Environmental Laws” means all applicable civil and criminal foreign (including Mexico), federal, state or local laws, statutes, ordinances, common law, rule, regulations or Mexican Official Norms relating to pollution or protection of the environment, human health and safety, and natural resources, including those relating to releases of Hazardous Materials or otherwise relating to the use, manufacture, processing, distribution, generation, treatment, storage, disposal, transport or handling of Hazardous Materials. The term Environmental Laws shall include, but will not be limited to, Mexico’s Ley General del Equilibrio Ecológico y la Protección al Ambiente, Mexico´s Ley de Aguas Nacionales, Mexico’s Ley General para la Prevención y Gestión Integral de los Residuos, Mexico´s Ley General de Desarrollo Forestal Sustentable, the regulations to each of such laws, Mexican Oficial Norms NOM-052-SEMARNAT-2005, NOM-053-SEMARNAT-1993, NOM-120-SEMARNAT-1997, NOM-138-SEMARNAT/SS-2003, NOM-141-SEMARNAT-2003, NOM-147-SEMARNAT/SSA1-2004, Mexico’s Ley General de Salud, Mexico’s Reglamento Federal de Seguridad, Higiene y Medio Ambiente en el Trabajo and Mexican Official Norm NOM-010-STPS-1999.

(y)

“Environmental Liability” means, with respect to any Person, any and all losses, liabilities, obligations, penalties, claims, lawsuits, criminal charges, claims, defenses, costs, judgments, trials, proceedings, damages, loss of profits, disbursements or expenses of any nature (including legal fees and the fees of consultants and experts and the expenses incurred in the investigation, defense or follow-up of any lawsuit, claim or proceeding, including any environmental claim) that may, on any date, be imposed on, incurred by or determined or ruled against, such Person or any of its Affiliates, shareholders, directors, officers, employees and/or agents, to the extent derived from or related to: (i) the compliance with the terms and conditions set forth in the Permits; (ii) the performance of the works and activities as set forth in the Permits; (iii) the exposure to any Hazardous Material; (iv) the release, presence, production, use, handling, emission, transportation, storage, treatment, discharge or disposal of any Hazardous Material; (v) the infringement or alleged infringement of any Environmental Law; and (vi) the infringement or alleged infringement of the terms and conditions set forth in the Permits.

(z)

“Equity Account” means the account established for each Shareholder as reflected on the books and records of the Company. The Equity Account for each Shareholder shall be deemed to be nil on the Effective Date and until amounts are credited to the Equity Accounts of the Shareholders pursuant to Section 7.1(c). The Equity Account for each Shareholder shall be credited with subsequent deemed and actual contributions (net of liabilities assumed by the Shareholders and liabilities to which such contributed property is subject) and each Shareholder’s distributive share of income and gain (or item thereof).  Each Shareholder’s Equity Account shall likewise be charged with the cash and the fair market value of property distributed to such Shareholder (net of liabilities assumed by such Shareholder and liabilities to which such distributed property is subject), and such Shareholder’s distributive share of loss and deduction (or item thereof).  Prior to any distribution of Assets (in-kind or otherwise), the Equity Account shall be adjusted for the gain or loss which would be allocable to each Shareholder upon a disposition of such Assets for fair market value.  Contributions and distributions shall include all cash contributions or distributions plus the deemed value (expressed in dollars) of all in-kind contributions or distributions. All calculations of income, expense, gain, loss, depletion, depreciation and amortization shall be based on Applicable Accounting Standards.

(aa)

“Existing Data” means maps, plans, exploration data, drill logs and other drilling data, core tests, samples, pulps, reports, photographs, surveys, assays, analyses, production reports, operations, technical, accounting and financial records, and other material information and data developed in operations on, or in any way related to, the Properties, including information and data in digital form, prior to the Effective Date.

(bb)

“Expenditures” means all amounts that the General Manager is permitted to charge to the Company pursuant to Section 2 of the Accounting Procedure. Expenditures shall also include any amounts described in the Accounting Procedure which the General Manager incurs after the date of this Agreement but before the Effective Date.

(cc)

“Exploration” means all activities directed principally toward ascertaining the existence, location, quantity, quality, or commercial value of deposits of Products, but shall not include condemnation or ore control drilling associated with Development or Mining.

(dd)

“Feasibility Study” means a technical report prepared by or for the Company, its successors or assigns, in respect of all or a portion of the Properties that meets in all material respects the definition of a “feasibility study” in National Instrument 43-101 – Standards of Disclosure for Mineral Projects, effective December 30, 2005.  

(ee)

“First Option” has the meaning assigned to it in Section 7.1(a).

(ff)

“Force Majeure” means any cause beyond a Party’s reasonable control, whether foreseeable or unforeseeable, including, without limitation:

(i)

acts of God; Laws, regulations, orders, proclamations, instructions or requests of any Governmental Authorities; judgments or orders of any court; inability to obtain on reasonably acceptable terms any public or private license, permit or other authorization; curtailment or suspension of activities to remedy or avoid an actual or alleged, present or prospective violation of federal, state or local environmental standards; acts of war or conditions arising out of or attributable to war, whether declared or undeclared; terrorism, riot, civil strife, insurrection or rebellion; fire, explosion, earthquake, mudslide, flood, storm, avalanche, sink holes, volcanic eruption or drought;

(ii)

interference by environmentalists, artisan miners, natives or native rights groups or other activists; adverse weather conditions not referred to in the preceding paragraph; labour disputes; material adverse change in metal commodity prices or in financial markets that makes the completion of Expenditures as contemplated in this Agreement in such circumstances inadvisable or inappropriate as a result of such market conditions; and

(iii)

delay or failure by suppliers or transporters of materials, parts, supplies, services or equipment or by contractors’ or subcontractors’ shortage of, or inability to obtain, labour, transportation, materials, machinery, equipment, supplies, utilities or services; accidents; breakdown of equipment, machinery or facilities.

Without limiting the generality of the foregoing, Force Majeure includes any apprehension by the General Manager, in its sole unlimited discretion, that Operations may not be conducted safely and securely or the conduct of Operations may put individuals at risk for their health, safety or security or property at risk of loss, theft or destruction.

(gg)

“General Manager” means the person appointed under Section 5.1 to manage Operations, or any successor General Manager.

(hh)

“Governmental Authorities” means any domestic or foreign governments, whether federal, provincial, state or municipal, and any branch, department or ministry thereof, or any governmental agency, authority, board, tribunal or commission of any kind whatsoever.

(ii)

“Hazardous Materials” means all materials, wastes or substances defined by, or regulated under, any Environmental Laws as a hazardous waste, hazardous material, hazardous substance, extremely hazardous waste, restricted hazardous waste, special waste, industrial substance or waste, contaminant, pollutant, toxic waste, or toxic substance, including petroleum, petroleum-derived products or wastes, asbestos, radioactive materials or wastes and polychlorinated biphenyls. The term Hazardous Materials shall include: (i)  the designations of “hazardous material” and/or “hazardous waste” pursuant to Mexico’s Ley General del Equilibrio Ecológico y la Protección al Ambiente, (ii) the lists or characterizations as “hazardous” under Mexican Official Norms NOM-052-SEMARNAT-2005 and NOM-053-SEMARNAT-1993, (iii) the designation of “hazardous waste” under Mexico’s Ley General para la Prevención y Gestión Integral de los Residuos and its Regulations, and/or (iv) in general any other waste, material or substance that is of a corrosive, reactive, explosive, toxic, flammable or infectious nature pursuant to the Environmental Laws, including but not limited to radon gas, asbestos, friable asbestos, asbestos containing materials, lead and lead based paint, mold, polychlorinated biphenyls, urea formaldehyde foam insulation, underground or above-ground storage tanks, whether empty or containing any substance and “jales”.

(jj)

“Law” or “Laws” means all applicable domestic and foreign national, federal, state and local Laws (statutory or common), rules, ordinances, regulations, grants, concessions, franchises, licenses, orders, directives, judgments, decrees, and other governmental restrictions, including permits and other similar requirements, whether legislative, municipal, administrative or judicial in nature.

(kk)

“Liabilities” means: (i) any and all penalties, costs, Losses, damages, judgments, settlements, disbursements, expenses, fees, obligations, debts, duties, judgments and other liabilities howsoever characterized, whether known or unknown, accrued or unaccrued, actual, contingent or otherwise, and any and all actions, claims, contests, suits, proceedings, demands and other judicial or administrative actions seeking to impose any of the foregoing; and (ii) Environmental Liabilities.

(ll)

“LIBOR” means for any month the London Inter-Bank Offered Rate for the 90 day period as published in the London Financial Times on the first day of that month.

(mm)

“Losses” means any and all costs and expenses (including, without limitation, attorneys’ fees, expert witness fees, court costs, penalties and fines) actually incurred by OpCo, the Company or a Shareholder, and including, without limitation, costs and expenses actually incurred by OpCo, the Company or a Shareholder with respect to Liabilities.

(nn)

“Minera Delta” means Minera Delta S.A. de C.V.

(oo)

“Mining” means the mining, exploiting, extracting, producing, handling, beneficiating, concentrating, treating, heap leaching, milling, smelting, refining or other processing of Products, regardless of the method, and includes the production of refinable concentrates and the sale and marketing or other distribution thereof, and all related compliance with Environmental Laws, including all reclamation after cessation of extracting operations.

(pp)

“Net Smelter Returns Royalty” means a net smelter returns royalty calculated as provided in Schedule C, which may be payable to a Royalty Holder as provided by Sections 10.10 or 11.1.

(qq)

“Non-Diluting Shareholder” means a Shareholder other than the Diluting Shareholder as described in Section 10.6.

(rr)

“Notices” has the meaning assigned to it in Section 18.1.

(ss)

“Offeree” is defined in Section 15.3 of this Agreement.

(tt)

“Offeror” is defined in Section 15.3 of this Agreement.

(uu)

“OpCo” means the Mexican corporation which will be incorporated and organized in accordance with Section 1.6, which shall be, directly and indirectly, a wholly owned subsidiary of the Company and shall hold 100% of all right, title and interest in and to the Properties.

(vv)

“Operations” means all activities carried out by OpCo, the Company or the Shareholders in respect of the Properties, including Exploration, Development and Mining and includes without limiting the foregoing the preparation or obtaining of pre-feasibility, feasibility, engineering or other studies or reports on or with respect to the Properties.

(ww)

“Ownership Interest” means the percentage interest representing the ownership interest of a Shareholder in the Company as evidenced by the Shareholder’s equity in the Company and any loans by the Shareholder to the Company, as such interest may from time to time be adjusted hereunder.  The Shares of the Company will be owned by each Shareholder in accordance with and in proportion to its Ownership Interest, as provided in Section 6.1. Ownership Interests shall be calculated to five decimal places and rounded to four (e.g., 1.51119% rounded to 1.5112%).  Decimals of .00005 or more shall be rounded up to .0001; decimals of less than .00005 shall be rounded down.  The initial Ownership Interests of the Shareholders are set out in Section 6.1.

(xx)

“Party” means a party to this Agreement.

(yy)

“Penõles Claim” means exploration claim named Aguila 16, title number 227658 convering 27.9769 hectares located in Urachi, Chihuahua, Mexico registered to Minera La Parrena, S.A. de C.V.

(zz)

“Permits” is defined in Section 16.2(g).

(aaa)

“Person” means any individual, firm, partnership, joint venture, trust, corporation, limited liability company, unincorporated organization, estate or other business entity (including a Governmental Authority).

(bbb)

“Production Decision” means a decision by the Board to commence Development of a mine for the Properties in accordance with the Feasibility Study.

(ccc)

“Products” means all ores, minerals, concentrates and mineral resources produced from the Properties under this Agreement.

(ddd)

“Program” means a description in reasonable detail of Operations to be conducted and objectives to be accomplished during a Budget Period.

(eee)

“Properties” means the Concessions and any extensions or renewals thereof, and any and all surface, water, access and other non-mineral rights of and to any lands wholly or partially within the Area of Interest held by or for OpCo including surface and access rights, water rights or other rights of any kind, subject to such additions or reductions from time to time as contemplated in Sections 19.3 and 19.4 respectively; Existing Data; and all associated machinery, equipment and infrastructure.

(fff)

“Project Financing” means any financing approved by the Board and obtained by the Company or OpCo for the purpose of placing a deposit of Products situated on the Properties or Area of Interest into commercial production, but shall not include any such financing obtained individually by either Shareholder to finance payment or performance of its obligations under this Agreement.

(ggg)

“Royalty Holder” has the meaning assigned to it in Schedule C.

(hhh)

“Second Option” has the meaning assigned to it in Section 7.2(a).

(iii)

“Shareholder” and “Shareholders” means AEM or GGR or any permitted successor or assign of AEM or GGR (and for the avoidance of doubt includes AEM prior to the acquisition of an Ownership Interest pursuant to Section 7.1).

(jjj)

“Shares” means common shares in the capital of the Company.

(kkk)

“Sole Funding Period” means the period beginning on the date of this Agreement and ending on the date of exercise of the Second Option or such earlier date on which AEM gives Notice under Section 8.6 to terminate sole funding.

(lll)

“Taxes” means taxes and governmental assessments of any nature, including without limitation, income taxes, ad valorem taxes, stamp taxes, transfer taxes, VAT, withholding taxes, imposts, duties, levies, charges and other payments to any Governmental Authorities, whether domestic or foreign and otherwise.

(mmm) “Transfer” means, when used as a verb, to sell, grant, assign, encumber, pledge, dispose of or to commit to do any of the preceding; and when used as a noun, a sale, grant, assignment, encumbrance, pledge, disposal or a commitment to do any of the preceding.

(nnn)

“TSX-V” means the TSX-Venture Exchange.

(ooo)

“TSX-V Approval” means the approval of this Agreement by the TSX-V as required pursuant to its policies for one or more of the transactions contemplated by this Agreement.

(ppp)

“TSX-V Approval Date” means the date on which the TSX-V Approval has been obtained.

(qqq)

“$” means United States dollars.

1.2

Schedules

Attached to and forming part of this Agreement are the following Schedules:

Schedule A

-

Concessions

Schedule B

-

Accounting Procedure

Schedule C

-

Net Smelter Returns Royalty

1.3

Captions and Gender of Terms

The captions and headings of this Agreement are for convenience only and do not affect, limit or amplify the provisions hereof. Words of one gender shall include the other gender.

1.4

Control Over other Persons

Where any obligation in this Agreement is expressed to be undertaken or assumed by any Party, that obligation is to be construed as requiring the Party concerned to exercise all rights and powers of Control over the affairs of any other Person over whom it is able to exercise such Control (whether directly or indirectly) in order to secure performance of the obligation.

1.5

TSX-V Approval

(a)

This Agreement is subject to TSX-V Approval.

(b)

GGR shall submit this Agreement to the TSX-V for approval forthwith, and shall copy AEM with a copy of its submission and a copy of the TSX-V Approval when obtained.

(c)

If the TSX-V Approval is not obtained within four weeks of the date of this Agreement, either Party may terminate this Agreement in which event AEM will be released from all obligations under this Agreement and GGR will also be so released unless GGR was reasonably capable of causing such condition to be fulfilled or has breached any of its covenants or obligations in or under this Agreement.

1.6

Incorporation of OpCo

(a)

AEM will use reasonable commercial efforts to procure the incorporation and organization of OpCo as a corporation (S.A. de C.V.) under the laws of Mexico in accordance with the following:

(i)

the bylaws and other constating documents shall not be inconsistent with the provisions of this Agreement;

(ii)

initially 1,000 shares shall be issued, 999 to and in the name of the Company and one to and in the name of an individual nominated by the Company; such individual will hold the share in trust for the Company and a copy of the document evidencing such shall be provided to each Shareholder; and

(iii)

the board of directors shall consist of one individual, a sole administrator, nominated by the Board.

(b)

If in spite of AEM’s reasonable commercial efforts OpCo has not been incorporated and organized in accordance with Section 1.6(a) within 45 days of the date of this Agreement, this Agreement will automatically terminate unless extended in writing by the Parties in which event:

(i)

both Parties will be released from their respective obligations under this Agreement; and

(ii)

AEM will perform its obligations provided in Section 8.7.

(c)

AEM shall be responsible for all costs and expenses incurred to incorporate and organize OpCo in accordance with the foregoing.

1.7

Title to Properties

(a)

GGR shall:

(i)

upon the incorporation of OpCo, cause Minera Delta to execute all assignments, transfers and other documentation necessary to assign and transfer the Concessions to OpCo;

(ii)

within ten days after Minera Delta has executed the documents required by Section 1.7(a)(i) cause such assignments, transfers and other documentation to be submitted for registration in the appropriate Public Registry of Mining in Mexico; and

(iii)

use commercially reasonable efforts at its expense to procure within 180 days of submission for registration the registration of all such assignments, transfers and other documentation.

GGR may at AEM’s expense utilize AEM’s Mexican counsel for these purposes.

(b)

If in spite of GGR’s commercially reasonable efforts the assignments, transfers and other documentation referred to in Section 1.7(a) have not been registered in the appropriate Public Registry of Mining in Mexico within 180 days of the date they are submitted for registration, AEM may by giving Notice to GGR terminate this Agreement in which event:

(i)

AEM will be released from all obligations under this Agreement and GGR will also be so released unless GGR has breached any of its covenants or obligations in or under this Agreement; and

(ii)

GGR will reimburse AEM for all Expenditures which it incurs between the date of execution of this Agreement and the date of termination.

(c)

If and when from time to time requested by AEM, GGR shall also procure the assignment and transfer to OpCo of any licences or permits held by GGR or Minera Delta which may be required by OpCo to carry out Operations.

2.

COMPANY’S PURPOSES

2.1

Purposes

The Company is formed for the following purposes and shall serve as the exclusive means by which such purposes are accomplished by the Company and the Shareholders:

(a)

to cause OpCo to conduct Exploration of the Properties and within the Area of Interest;

(b)

to oversee and manage OpCo’s conduct of Operations;

(c)

to acquire additional properties within the Area of Interest;

(d)

to evaluate the possible Development and Mining of the Properties;

(e)

to cause OpCo to engage in Development and Mining of the Properties; and

(f)

to perform any other activity necessary, appropriate, or incidental to any of the foregoing.

The Company shall serve as the exclusive means by which the Shareholders and their respective Affiliates shall accomplish any of the purposes of the Company as set forth herein. Notwithstanding the foregoing provisions of this Section 2.1, neither Shareholder nor their respective Affiliates will engage in mineral exploration or exploitation activities or acquire directly or indirectly any rights to or interests in minerals or water or other property within the Area of Interest or interfere with, hinder or take any action outside the Properties inconsistent with the exercise of access rights by the Company.

2.2

Limitation

Unless the Shareholders otherwise agree in writing, the Business of the Company shall be limited to the purposes described in Section 2.1, and nothing in this Agreement shall be construed to enlarge such purposes.

2.3

Status of OpCo

OpCo is and shall be the holder of all rights and the obligor to all obligations imposed on it by the Mining Law of Mexico and the regulations thereunder, as the sole legal and beneficial recorded owner of the Concessions.

2.4

Action by Directors Consistent with Agreement

AEM and GGR shall each cause the directors of the Company that it elects to cast all votes and take all other actions in their capacities as directors in a manner consistent with this Agreement and so as to implement its terms and intent. AEM and GGR will each immediately remove or cause the removal of any director who acts in any manner that is inconsistent with the terms and conditions of this Agreement.  Any action or failure to act by a director, that would be a breach of this Agreement if taken by a Shareholder, shall be deemed a breach of this Agreement by the Shareholder that elected the director.

2.5

Controlling Terms

In the event of any inconsistency between the terms and conditions of the articles of the Company and the terms and conditions of this Agreement, the terms and conditions of this Agreement shall be determinative.

3.

RELATIONSHIP OF THE SHAREHOLDERS OF THE COMPANY

3.1

No Agency

Nothing contained in this Agreement shall be deemed to constitute any Shareholder the partner or joint venturer of the other, to create any fiduciary relationship between them, nor, except as otherwise herein expressly provided, to constitute any Shareholder the agent or legal representative of any other.  No Shareholder shall have any authority to act for or to assume any obligation or responsibility on behalf of any other Shareholder in its individual capacity, except as otherwise expressly provided herein.  Each Shareholder shall indemnify, defend and hold harmless the General Manager, the other Shareholder and its Affiliates, their directors, managers, officers, employees, agents, attorneys (acting under power of attorney), and the directors of the Company elected by the indemnified Shareholder from and against any and all Liabilities arising out of any act or assumption of liability by the indemnifying Shareholder, or any of its directors, managers, officers, employees, agents or attorneys (acting under power of attorney) or the managers of the Company elected by it done or undertaken, or apparently done or undertaken, on behalf of the other Shareholder, except pursuant to authority expressly granted in this Agreement.  Nothing in this Section 3.1 shall be deemed to lessen any power or authority, express or implied, of the General Manager or of any manager, officer or committee of the Company.

3.2

Other Business Opportunities

Except with respect to the Properties or as expressly provided in this Agreement and except that no Shareholder shall interfere with, or create access or infrastructure impediments or Encumbrances on any access or infrastructure needed by the Company to conduct the Business under this Agreement, each Shareholder and its Affiliates shall have the right independently to engage in and receive full benefits from business activities, whether or not competitive with the Company, without consulting the other.  The doctrines of “corporate opportunity” or “business opportunity” shall not be applied to the Business nor to any other activity, venture, or operation of any Shareholder.  Except for the foregoing, no Shareholder shall have any obligation to the Company or any other Shareholder with respect to any opportunity to acquire any property or water rights outside the Properties or the Area of Interest at any time, or, except as provided in Section 14.2, within the Properties or the Area of Interest after the termination or liquidation of the Company.  Unless otherwise agreed in writing, neither the General Manager nor any Shareholder shall have any obligation to mill, beneficiate or otherwise treat any Products or the other Shareholder’s share of Products in any facility owned or controlled by the General Manager or such Shareholder.

3.3

Transactions with Affiliates

The Company or the General Manager may contract with an Affiliate of a Shareholder to provide services, supplies, equipment or machinery hereunder, provided that it shall do so on terms no less favourable than would be the case with unrelated persons in arm’s length transactions. The Company or the General Manager, as the case may be, shall forthwith give Notice to the other Shareholder of any contract with an Affiliate of a Shareholder.  The Notice shall include copies of any written agreements, the total cost of the contract, and all other applicable details with respect to the contract ensuring full disclosure of the nature of the transaction to the other Shareholder.

3.4

Financial Matters

The General Manager shall be responsible for preparing and filing tax returns for the Company and OpCo and shall provide to the Shareholders copies of any tax filings made. Each Shareholder shall be responsible for preparing and filing its own tax returns. At the end of the Sole Funding Period the General Manager shall, if AEM does not exercise the First Option, provide audited consolidated financial statements of the Company to the Shareholders.

3.5

Waiver of Rights to Partition

The Shareholders hereby waive and release all rights of partition, or of sale in lieu thereof, or other division of Assets, including a full waiver of any such rights provided by Law or in equity.

3.6

Bankruptcy of a Shareholder

A Shareholder shall cease to have any power as a Shareholder or Manager or any voting rights or rights of approval hereunder upon bankruptcy, insolvency, dissolution or assignment for the benefit of creditors of such Shareholder, and its successor upon the occurrence of any such event shall have only the rights, powers and privileges of a transferee enumerated in Article 15, and shall be liable for all obligations of the Shareholder under this Agreement. In no event, however, shall a personal representative or successor become a substitute Shareholder unless the requirements of Article 15 are satisfied.

3.7

Implied Covenants

There are no implied covenants contained in this Agreement, or in any other document executed pursuant to this Agreement.

3.8

No Hedging

No hedging transaction shall be entered into by or on behalf of the Company or OpCo except as otherwise agreed to by the Shareholders or required by lenders pursuant to Project Financing and any so agreed or required shall comply with the policies and procedures approved by the Board.

3.9

Limitation of Liability

The Shareholders shall not be required to make any contribution to the Liabilities or the capital of the Company or otherwise except as otherwise provided in this Agreement as a Program and Budget, nor shall the Shareholders in their capacity as Shareholders or General Manager be bound by, or liable for, any debt, Liability or obligation of the Company whether arising in contract, tort, or otherwise, except as expressly provided by this Agreement with respect to its pro rata share of an adopted Program and Budget, or as specifically agreed in writing by such Shareholder.

3.10

Indemnities

The Company may, and shall have the power to, indemnify and hold harmless any Shareholder or General Manager or other person from and against any and all Liabilities arising from or related to the Business or otherwise to the full extent permitted by Law.

3.11

No Third Party Beneficiary Rights

This Agreement shall be construed to benefit the Shareholders and their respective successors and assigns only, and shall not be construed to create third party beneficiary rights in any other private or public Person including without limitation, any governmental organization or agency.

3.12

Liability Several

The rights, duties, obligations, and liabilities of each Shareholder under this Agreement shall be several and not joint or collective.

3.13

No Fiduciary Duties

The directors of the Company are responsible to, and bound to represent the interests of, the Shareholder of the Ownership Interest that caused their election.  Subject to Section 2.4, it shall not be a breach of fiduciary duty or of any term or condition of this Agreement for a director of the Company in discharging his or her responsibilities under this Agreement to place the interests of the Shareholder that elected him or her above the interests of the other Shareholder.

3.14

Labour Responsibilities

Under no circumstance shall AEM be considered as an Affiliate, mandatory or agent, or in any way related to GGR or any employee or personnel hired by GGR.  Additionally, GGR will not be considered as an Affiliate, mandatory or agent, or in any way related to AEM with respect to the personnel or any employee hired by AEM.

3.15

Incorporation of Company

AEM shall be responsible for all costs and expenses incurred to incorporate and organize the Company.

4.

BOARD OF DIRECTORS

4.1

Organization and Composition

The Company shall be managed by a Board consisting of three directors.  During the Sole Funding Period, all of the directors shall be nominees of and appointed by AEM. After the Sole Funding Period two directors shall be appointed by the Shareholder with the majority Ownership Interest and one director shall be appointed by the Shareholder with the minority Ownership Interest. Each Shareholder may each also appoint one or more alternate directors to the Board to act in the absence of one or more of its elected regular directors.  Any alternate when so acting shall be deemed a member of the Board.  Each Shareholder shall give Notice to the other of the appointment of its directors and alternates.  If a Shareholder’s Ownership Interest is reduced from a majority position to a minority position hereunder, that Shareholder will immediately cause one of its two appointed directors to resign.   If a Shareholder’s Ownership Interest is reduced to 10% or less, that Shareholder will immediately cause all of its then appointed directors to resign.   The other Shareholder whose Ownership Interest is increased to a majority position will be entitled to appoint a replacement director for the resigning director such that its appointees reflect a majority of the Board. The Shareholder appointing the majority of the directors shall appoint the Chairman of the Board. The Chairman of the Board, or in his absence, his alternate, shall conduct all Board meetings. The procedures for Board meetings shall be as determined by the Board.

4.2

Powers

The Board shall have power and authority over the business and affairs of the Company as provided in this Agreement and will have the responsibility, subject to the terms and conditions of this Agreement, to determine overall policies, objectives, procedures, methods, Operations and actions for the Company. The Board shall also have power and authority, but not the obligation, to raise Project Financing in the name of the Company or OpCo and to authorize the Company to mortgage the Assets for that purpose.

4.3

Decisions

Each director shall have one vote. All decisions of the Board shall be by simple majority including without limitation the following:

(a)

the approval of Programs and Budgets;

(b)

the appointment of officers of the Company;

(c)

the declaration, form, manner and timing of any distributions by the Company to the Shareholders;

(d)

the form in which additional contributions shall be made by the Shareholders pursuant to Section 12.2;

(e)

the exercise of the votes attached to the shares of OpCo held by the Company;

(f)

any and all other actions which may be taken by OpCo; and

(g)

any other matter referred to in this Agreement as requiring a decision by the Board.

4.4

Situations in which Directors Must Abstain from Voting.  

Notwithstanding any other provision in this Agreement and the actual Ownership Interests of the Shareholders if a Shareholder defaults:

(a)

in making a contribution to an Adopted Program and Budget in which, pursuant to Section 10.5 of this Agreement it has elected to participate or is deemed to have elected to participate;

(b)

in repaying a Default Loan upon demand pursuant to Section 11.1;

(c)

in making a contribution in the manner and amount and at the times specified in Section 12.2; or

(d)

under any other material provision of this Agreement or a Default Loan,

the directors appointed by the defaulting Shareholder shall abstain from all voting and the presence of the directors appointed by the non-defaulting Shareholder shall constitute a quorum of any meeting of the Board if notice was given as provided in Section 4.5, unless and until such default is cured to the reasonable satisfaction of the non-defaulting Shareholder (at which time the Board voting shall revert back).  

4.5

Meetings of Board

During the Sole Funding Period meetings of the Board are not required and thereafter shall be held quarterly on a date to be determined by the Board and specified in the Notice of such meeting.  Special meetings of the Board may be called by any director on seven days prior Notice.  In case of emergency, reasonable notice of a special meeting shall suffice.  There shall be a quorum if Notice was given as provided in this Section 4.5 and at least one director representing the Shareholder with the majority of the Board Votes is present.  Subject to the provisions of this Section 4.5, meetings of the Board may be held at such place or places as shall from time to time be determined by the Board and designated in the Notice of meeting.  The Chairman of the Board, or his or her alternate, shall act as chairman and secretary of the meeting of the Board.  The director calling a special meeting, and the Chairman of the Board with respect to regularly scheduled meetings, shall prepare a reasonably detailed agenda, which shall specifically identify any major proposed changes to operating procedures.  The agenda shall accompany the Notice of the Board meetings and be sent to the directors at least seven days prior to a special meeting and at least 15 days prior to a regularly scheduled quarterly meeting, but any matters may be considered with the consent of all Shareholders.

4.6

Action without Meeting in Person

In lieu of meetings in person, the Board may conduct meetings by conference telephone where all participants can hear each other and/or video conference.  The Board may also take actions in writing signed by all of the directors of the Board in which case meetings of the Board will not be required.

4.7

Board of Directors of OpCo

The board of directors of OpCo shall consist of one director, a sole administrator, selected by the Board and appointed by the Company.

5.

GENERAL MANAGER

5.1

Appointment of the General Manager

AEM is hereby appointed as the General Manager with overall responsibility to manage and carry out Operations.  AEM hereby agrees to serve as General Manager until it resigns as provided in Section 5.5 or is replaced pursuant to Section 5.6.

5.2

Delegation of Authority to the General Manager

At the first meeting of the Board and at the first meeting of the board of directors of OpCo, the powers and duties prescribed in Section 5.3 shall be formally delegated to the General Manager by the execution of such powers of attorney as may be requisite.

5.3

Rights and Duties of General Manager

Subject to the terms and provisions of this Agreement, the General Manager shall have the following rights and duties which shall be discharged in accordance with Adopted Programs and Budgets and under the general guidance of the Board:

(a)

The General Manager shall manage, direct and carry out Operations, and shall prepare and present to the Board proposed Programs and Budgets as provided in Article 10.

(b)

The General Manager shall, through the Company, implement the decisions of the Board and shall make all expenditures necessary to carry out Adopted Programs and Budgets, and shall promptly advise the Board if it lacks sufficient funds to carry out its responsibilities under this Agreement and of any change in Operations which the General Manager considers material.

(c)

The General Manager shall:

(i)

purchase or otherwise acquire for the Company and/or OpCo all material, supplies, equipment, water, utility and transportation services required for Operations, such purchases and acquisitions to be made on the best terms available, taking into account all of the circumstances;

(ii)

obtain such customary warranties and guarantees as are available in connection with such purchases and acquisitions; and

(iii)

keep the Assets free and clear of all Encumbrances, except for those existing at the time of, or created concurrently with, the acquisition of such Assets, or mechanic’s or materialmen’s liens which shall be contested, released or discharged in a diligent manner, or Encumbrances specifically approved by the Board.

(d)

The General Manager shall conduct such title examinations and cure such title defects as may be advisable in the reasonable judgment of the General Manager.

(e)

The General Manager shall:

(i)

make or arrange for all payments required by leases, licenses, permits, contracts and other agreements related to the Assets; and

(ii)

pay all Taxes, assessments and like charges on Operations and Assets except Taxes determined or measured by the Shareholders’ sales revenue or income.

If authorized by the Board, the General Manager shall have the right to contest in the courts or otherwise, the validity or amount of any Taxes, assessments or charges if the General Manager deems them to be unlawful, unjust, unequal or excessive, or to undertake such other steps or proceedings as the General Manager may deem reasonably necessary to secure a cancellation, reduction, readjustment or equalization thereof before the General Manager shall be required to pay them, but in no event shall the General Manager permit or allow title to the Assets to be lost as the result of the non-payment of any Taxes, assessments or like charges.

(f)

The General Manager shall:

(i)

apply for all necessary permits, licenses and approvals to carry out Operations;

(ii)

comply with applicable Laws in all substantial respects;

(iii)

notify promptly the Board of any allegations of substantial violation thereof; and

(iv)

prepare and file all reports or notices required for Operations.

The General Manager shall not be in breach of this Section 5.3(f) if a violation has occurred and the General Manager in a timely fashion takes such steps as might be available to remedy the violation or to prevent its recurrence or disposes of the same through payment of fines or penalties imposed in accordance with the Law and the cost thereof shall be charged to the Business Account.

(g)

The General Manager shall prosecute and defend as it considers appropriate, but shall not initiate without consent of the Board, all litigation or administrative proceedings arising out of Operations.  The Board shall approve in advance any settlement involving payments (except for fines or penalties), commitments or obligations in excess of $100,000 in cash or value.

(h)

The General Manager shall obtain and maintain for itself, OpCo and the Company such insurance, with such limits and deductibles, as would normally be maintained by a reasonably prudent operator in the circumstances, either by way of a separate policy or the extension of coverage under a “blanket” policy maintained by an Affiliate of the General Manager, and the cost thereof shall be charged to the Business Account.

(i)

The General Manager shall have the right, subject to Section 5.9 below, to carry out its responsibilities hereunder through agents, Affiliates or independent contractors.  Notice of any responsibility to be carried out by any Affiliate shall be provided to the other Shareholder.  The Notice shall include copies of any written agreements, cost, and all other applicable details with respect to the responsibility ensuring full disclosure of the nature of the transaction to the other Shareholder.

(j)

The General Manager shall keep and maintain all required accounting and financial records pursuant to the Accounting Procedure and in accordance with Applicable Accounting Standards.

(k)

The General Manager shall keep the Shareholders advised of all Operations by submitting in writing to each Shareholder a brief monthly report during active Operations and a detailed report within 90 days after completion of each Program and Budget.  The detailed report shall include comparisons between actual and budgeted expenditures and comparisons between the objectives and results of Programs. At all reasonable times the General Manager shall provide the Board or the representatives of each Shareholder access to, and the right to inspect and copy all maps, drill logs, core tests, reports, surveys, assays, analyses, production reports, operations, technical, accounting and financial records, and other information acquired in Operations.  Such material and information concerning or derived from the Operations shall be kept confidential and, except to the extent required by applicable Law or the rules of any stock exchange, shall not be disclosed to any person other than an Affiliate without the prior consent of all Shareholders, which consent shall not unreasonably be withheld. Each Shareholder agrees that its use of or reliance on such material and information shall be at its sole risk and further agrees to indemnify, defend and hold harmless the General Manager and its Affiliates (including without limitation direct and indirect parent companies), and its or their respective directors, managers, officers, shareholders, employees, agents and attorneys (acting under power of attorney), from and against any and all Liabilities, including reasonable legal fees, which may be imposed upon, asserted against or incurred by any of them and which arise out of or result from use of or reliance on such material and information by the receiving Shareholder, or any third party to whom the receiving Shareholder discloses such material and information.  The General Manager makes no representation or warranty as to the completeness or accuracy of any material or information disclosed hereunder.

(l)

The General Manager shall allow each Shareholder, at such Shareholder’s sole risk and expense, and subject to the General Manager’s safety regulations, to inspect the Assets and Operations at all reasonable times, so long as such Shareholder does not unreasonably interfere with Operations.  Such Shareholder agrees to indemnify, defend and hold harmless the General Manager and its Affiliates (including without limitation direct and indirect parent companies), and its or their respective directors, managers, officers, shareholders, employees, agents and attorneys (acting under power of attorney), from and against any and all Liabilities, including reasonable legal fees, which may be imposed upon, asserted against or incurred by any of them and which arise out of or result from the entry of, presence or activities of such Shareholder and/or its agents and representatives on the Properties, including without limitation bodily injury or death at any time resulting therefrom and damage to property sustained by any person or persons, unless the Liabilities are caused by the gross negligence or wilful misconduct of the General Manager.

(m)

The General Manager shall undertake all other activities reasonably necessary to fulfil the foregoing.

The General Manager shall not be in default of any duty under this Section 5.3 if its failure to perform results from the failure of the other Shareholder to perform acts or to contribute or pay amounts required of it by this Agreement.

5.4

Standard of Care

The General Manager shall conduct all Operations in a good, workmanlike and efficient manner, in substantial accordance with sound mining and other applicable industry standards and practices, and in substantial accordance with the terms and provisions of leases, licenses, permits, contracts and other agreements pertaining to Assets.  The General Manager shall not be liable to the Company or the other Shareholder for any act or omission resulting in damage or loss unless the same is a result of the General Manager’s, or any Affiliate’s, wilful misconduct or negligence.

5.5

Resignation of General Manager

The General Manager may resign upon one month’s prior Notice to the Shareholders, in which case the Board will appoint a new General Manager.

5.6

Replacement of General Manager

After the Sole Funding Period, the Board may, upon majority approval of the Shareholders which are not Affiliates of the General Manager and giving notice to the General Manager, remove the General Manager, effective the date designated by the Board, if:

(a)

The General Manager is in material default under this Agreement and fails to cure such default, or to commence bona fide curative measures, within 30 days of receiving notice of the default from a Shareholder.

(b)

The Ownership Interest of the General Manager and its Affiliates is reduced so that it is not the single largest Ownership Interest.

(c)

The General Manager makes an assignment for the benefit of its creditors, or consents to the appointment of a receiver for all or substantially all of its property, or files a petition in bankruptcy or for a reorganization under the appropriate bankruptcy legislation, or is adjudicated bankrupt or insolvent.

(d)

A court order is entered, without the consent of the General Manager, appointing a receiver or trustee for all or substantially all of its property or approving a petition in bankruptcy or for a re-organization pursuant to the appropriate bankruptcy legislation or for any other judicial modification or alteration of the rights of creditors.

5.7

Transition to new General Manager

Upon ceasing to be General Manager, the former General Manager shall forthwith deliver to the new General Manager:

(a)

Custody of the Assets and any books and records pertaining to the Assets, which it prepared or maintained in its capacity as General Manager.

(b)

Such documents as may be necessary to transfer the operating authority of all bank accounts used for the conduct of the Operations.

(c)

Such other documents and instruments relating to OpCo, the Company or otherwise related to this Agreement as are reasonably necessary to transfer all of the rights, responsibilities, duties and status as General Manager held by the previous General Manager.

The new General Manager shall assume all of the rights, responsibilities, duties, and status of the previous General Manager as provided in this Agreement.  The new General Manager shall have no obligation to hire any person employed by the former General Manager in connection with the Operations at the date it resigns or is removed.

5.8

Payments to General Manager

The Company will compensate the General Manager for its services and reimburse the General Manager for its costs hereunder in accordance with the Accounting Procedure.

5.9

Transaction with Affiliates

The General Manager may engage Affiliates to provide services, supplies, equipment or machinery hereunder, provided that it shall do so on terms no less favourable than would be the case with unrelated persons in arm’s length transactions.  The General Manager shall forthwith give Notice to Shareholders if it engages an Affiliate to provide services, supplies, equipment or machinery.  The Notice shall include copies of any written agreements, the total cost of the engagement, and all other applicable details with respect to the engagement ensuring full disclosure of the nature of the transaction to the Shareholders

5.10

Activities Absent Approved Plan and Budget

If the Board for any reason fails to adopt a Program and Budget, then subject to the contrary direction of the Board and to the receipt of necessary funds, the General Manager shall continue Operations at levels necessary to maintain and protect the Assets and to comply with all contractual and regulatory obligations related thereto.  The Shareholders shall be obligated to fund such Operations until a new Program and Budget has been adopted.  For purposes of determining the required contributions of the Shareholders and their respective Ownership Interests, the last adopted Program and Budget shall be deemed to have been extended.

5.11

Independent Contractor

After the Sole Funding Period, the General Manager is and shall act as an independent contractor and not as the agent of the other Shareholder.  The General Manager shall maintain complete control over its employees and all of its subcontractors with respect to performance of the Operations.  Nothing contained in this Agreement or any subcontract awarded by the General Manager shall create any contractual relationship between any subcontractor and the other Shareholder.  The General Manager shall have complete control over and supervision of Operations and shall direct and supervise the same so as to ensure their conformity with this Agreement.

6.

OWNERSHIP INTERESTS

6.1

Ownership Interests of Shareholders

The Ownership Interest of each Shareholder is the equitable and beneficial ownership right and interest of the Shareholder in the Company, including but not limited to the Company’s profits and capital.  The Shares of the Company shall be held by each of the Shareholders in proportion to its Ownership Interest. The Ownership Interests of the Shareholders shall be adjusted as provided in this Agreement.  On the Effective Date AEM has a 0% Ownership Interest and GGR has a 100% Ownership Interest.

6.2

Changes in Ownership Interests

A Shareholder’s Ownership Interest shall be changed as follows:

(a)

as provided in Article 7;

(b)

upon an election by a Shareholder pursuant to Section 10.6 to contribute less to an Adopted Program and Budget than the amount corresponding to its Ownership Interest;

(c)

as provided in Section 10.10 or Section 11.1;

(d)

by transfer by a Shareholder of less than all of its Ownership Interest in accordance with Article 15; or

(e)

by acquisition of the Ownership Interest of the other Shareholder, however arising.

Upon any change in the Shareholder’s Ownership Interests, the Shareholder’s respective Equity Account balance shall be adjusted to the extent necessary such that each Shareholder’s Equity Account balance equals the same percentage of the aggregate Equity Account balances of all Shareholders as their respective Ownership Interests after such change.

6.3

Changes in Ownership of Shares.  

If the Ownership Interests of the Shareholders are changed, the ownership of the Shares of the Company and the right to repayment of any loans by Shareholders to the Company shall also be changed in the manner set forth in Section 10.11 to correspond to the changed Ownership Interests.

6.4

Additional Cash Contributions

After the Sole Funding Period, any further contributions to the Company shall be contributed by the Shareholders in proportion to their then respective Ownership Interests, as provided in Articles 10, 11 and 12.

7.

OPTIONS FOR AEM TO ACQUIRE OWNERSHIP INTERESTS

7.1

Option to acquire 51%

(a)

GGR hereby grants to AEM the irrevocable, sole and exclusive right and option (the “First Option”) exercisable in the manner described in Section 7.1(b) to acquire from GGR a 51% Ownership Interest in the Company.  Upon exercise of the First Option, GGR’s Ownership Interest in the Company will be reduced to 49%.

(b)

In order to exercise the First Option AEM must:

(i)

incur Expenditures of not less than $500,000 before the first anniversary of the Effective Date;

(ii)

incur Expenditures of an additional $750,000 before the second anniversary of the Effective Date;

(iii)

incur Expenditures of an additional $1,000,000 before the third anniversary of the Effective Date;

(iv)

incur Expenditures of an additional $1,250,000 before the fourth anniversary of the Effective Date;

(v)

incur Expenditures of an additional $1,500,000 before the fifth anniversary of the Effective Date;

for total Expenditures of not less than $5,000,000.

(c)

Upon AEM satisfying the requirements in Section 7.1(b) and, within six months after doing so, giving GGR Notice of exercise of the First Option, AEM shall without any further payment or action be deemed to have exercised the First Option and it will thereupon acquire and be deemed to have acquired and be vested with a 51% Ownership Interest in the Company. GGR shall be deemed to transfer sufficient Ownership Interest held by it to achieve the foregoing or, at the election of AEM, the Company shall issue to AEM for no additional consideration sufficient Ownership Interests to achieve the foregoing. The Equity Account of AEM shall be credited with the amount of its Expenditures under this Section 7.1 and the Equity Account of GGR shall be adjusted accordingly such that each Shareholder’s Equity Account balance equals the same percentage of the aggregate Equity Account balances of all Shareholders as their respective Ownership Interests after such change.

(d)

AEM may at any time let the First Option lapse by not exercising it in accordance with Section 7.1(c) or by not satisfying the requirements in Section 7.1(b), whereupon the First Option and this Agreement will terminate and AEM will not acquire or retain any Ownership Interest.

7.2

Option to acquire Additional 20%

(a)

GGR hereby grants to AEM the irrevocable, sole and exclusive right and option (the “Second Option”) exercisable in the manner described in Section 7.2(b), to acquire an additional 20% interest in the Company, in addition to the 51% Ownership Interest that may be acquired on the exercise of the First Option (for an aggregate 71% Ownership Interest). Upon exercise of the Second Option, GGR’s Ownership Interest in the Company will be reduced to 29%.

(b)

In order to exercise the Second Option AEM must:

(i)

have exercised the First Option;

(ii)

incur Expenditures of not less than:

A.

$1,500,000 before the sixth anniversary of the Effective Date;

B.

an additional $1,500,000 before the seventh anniversary of the Effective Date;

C.

an additional $1,500,000 before the eighth anniversary of the Effective Date; and

D.

an additional $1,500,000 before the ninth anniversary of the Effective Date;

for total Expenditures under this Section 7.2(b)(ii) of not less than $6,000,000; and

(iii)

either prepare a Feasibility Study on or before the ninth anniversary of the Effective Date or incur Expenditures of not less than:

A.

an additional $1,000,000 before the tenth anniversary of the Effective Date;

B.

an additional $1,000,000 before the eleventh anniversary of the Effective Date;

C.

an additional $1,000,000 before the twelfth anniversary of the Effective Date; and

D.

an additional $1,000,000 before the thirteenth anniversary of the Effective Date;

for total Expenditures under this Section 7.2(b)(iii) of not less than $4,000,000 (and total Expenditures under Section 7.2(b)(ii) and this Section 7.2(b)(iii) of not less than $10,000,000).

(c)

Upon AEM complying with the provisions of Section 7.2(b) and, within six months of doing so, giving GGR Notice of exercise of the Second Option, AEM shall without any further payment or action be deemed to have exercised the Second Option and it will thereupon acquire and be deemed to have acquired and be vested with a an additional 20% interest in the Company, in addition to the 51% Ownership Interest acquired on the exercise of the First Option for an aggregate 71% Ownership Interest. GGR shall be deemed to transfer sufficient Ownership Interest held by it to achieve the foregoing or, at the election of AEM, the Company shall issue to AEM for no additional consideration sufficient Ownership Interests to achieve the foregoing. The Equity Account of AEM shall be credited with the amount of its Expenditures under this Section 7.2 and the Equity Account of GGR shall be adjusted accordingly such that each Shareholder’s Equity Account balance equals the same percentage of the aggregate Equity Account balances of all Shareholders as their respective Ownership Interests after such change.

(d)

AEM may terminate the Second Option at any time by giving Notice to GGR or by not satisfying any of the requirements in Section 7.2(b) whereupon the Second Option will terminate and the Ownership Interests of AEM and GGR will be 51% and 49% respectively and the Equity Accounts of each Shareholder will be adjusted accordingly.

7.3

Mandatory Expenditures

Subject to the provisions of Article 9, AEM is obligated to incur the Expenditures referred to in Section 7.1(b)(i).

7.4

Manner of Expenditure

AEM may incur Expenditures pursuant to this Article 7 directly or through the Company or OpCo.

8.

SOLE FUNDING PERIOD

8.1

Sole Funding by AEM

During the Sole Funding Period, AEM will sole fund all Approved Programs, Budgets and Expenditures.

8.2

Force Majeure

If from time to time AEM is prevented by Force Majeure from incurring Expenditures in the amounts and times provided in Sections 7.1 and 7.2 or from preparing a Feasibility Study within the time provided in Section 7.2(b)(iii) then AEM shall have such additional time as is reasonable in the circumstances to incur the Expenditures or to prepare the Feasibility Study.

8.3

Conduct of Operations by GGR

If during the Sole Funding Period:

(a)

AEM apprehends that Operations may not be conducted safely and securely or the conduct of Operations may put individuals at risk for their health, safety or security or property at risk of loss, theft or destruction and AEM anticipates that such Force Majeure will prevent it from incurring Expenditures in the amounts and times provided in Sections 7.1 and 7.2 or from preparing a Feasibility Study within the time provided in Section 7.2(b)(iii);

(b)

at the same time GGR owns mining concessions in the vicinity of the Properties on which the conduct of similar operations are subject to the same risks and, notwithstanding such risks, GGR is itself conducting on those concessions continuous and uninterrupted operations which are similar to the operations which AEM would otherwise be conducting on the Properties; and

(c)

GGR has not previously been in material default under any of the provisions in Section 8.4; GGR is not insolvent; and GGR has the legal right and authorization and the capacity in terms of personnel and expertise to carry out the intended operations on the Properties;

AEM will give Notice to GGR and GGR will have the right, exercisable by Notice to AEM within 30 days of the receipt by GGR of the Notice from AEM, to assume temporarily the conduct of Operations on and subject to the terms in Section 8.4.

8.4

In respect of Operations carried out by GGR pursuant to Section 8.3:

(a)

AEM will notify GGR of the amount of Expenditures and tentative program which it wishes GGR to incur and carry out on its behalf in any ensuing period. GGR will within 30 days provide to AEM, in consultation with AEM, a budget based on such program with a detailed break-down of the costs thereof. AEM will make any revisions to the budget and program which it considers desirable and approve it or request GGR to make revisions to the budget and resubmit it for approval, which GGR will do within 15 days. Once AEM notifies GGR in writing of its agreement to a proposed program and budget, it will be deemed to be adopted by the Board for the purposes of Section 10.1. AEM may by Notice to GGR at any time, reduce the Expenditures to be incurred under a budget and program.

(b)

GGR will request funds from AEM as they are needed to pay invoices for Expenditures, copies of such invoices to be provided with the request. AEM will advance the funds in a timely fashion and GGR will deposit them to a special purpose bank account; any interest thereon will be for the account of AEM; GGR will not commingle the funds so advanced with other moneys; and GGR will not use such funds for any purpose other than to pay such invoices.

(c)

GGR will incur and pay on behalf of AEM such of the Expenditures referred to in Section 7.1 and/or Section 7.2 as it is authorized to incur pursuant to 8.4(a). GGR will incur such Expenditures in a timely fashion so as to enable AEM to exercise the First Option and if applicable the Second Option. Any delay or failure by GGR will be considered Force Majeure so long as no negligence, default or delay on the part of AEM shall have contributed to such delay or failure on the part of GGR.

(d)

GGR will incur Expenditures under adopted budgets and programs strictly in accordance therewith. Any contracts or commitments to be entered into by GGR for that purpose will be subject to AEM’s prior written approval. GGR will not have the authority to exceed the approved budget, to incur Expenditures other than those provided in the budget or to do work not provided in such program.

(e)

All Expenditures incurred by GGR pursuant to this Section will be credited to the Expenditures to be incurred by AEM under Section 7.1 and if applicable Section 7.2.

(f)

GGR will provide to AEM full and unrestricted access to all data derived from the incurring of Expenditures hereunder with copies thereof as requested by AEM. GGR will provide to AEM monthly reports showing in such detail as AEM may request the work performed in connection with the Properties, the results obtained, GGR’s interpretation thereof and the Expenditures incurred. GGR will provide a summary report of all such activities within 60 days of the conclusion of each program of work. AEM may second a project geologist(s) to work with GGR in relation to the Properties and Operations and GGR will be fully cooperative and supportive.

(g)

GGR will forward to AEM with the monthly reports under Section 8.4(f), copies of all invoices for Expenditures incurred and paid in that month by GGR in accordance with this Section, together with evidence of payment and such other information as AEM may reasonably request. AEM will pay GGR a fee of 5% of the salary costs directly incurred by GGR in respect of its own employees in carrying out Operations pursuant to this Section and 3% of the contractor costs directly incurred by GGR in carrying out Operations pursuant to this Section. All such fees will count towards Expenditures by AEM. GGR will not be entitled to any other fee or other payment for carrying out Operations.

(h)

AEM will have the right on reasonable notice to GGR from time to time to audit the books, records and accounts of GGR pertinent to the incurring and payment of Expenditures by it on behalf of AEM.

(i)

GGR in carrying out Operations hereunder shall comply with all applicable Laws, including without limitation, Environmental Laws, and will carry out Operations in a good, workmanlike and efficient manner, in substantial accordance with sound mining and other applicable industry standards and practices, and in substantial accordance with the terms and provisions of leases, licenses, permits, contracts and other agreements pertaining to Assets, and shall keep the Properties free and clear of Encumbrances resulting from its activities.

(j)

GGR shall indemnify defend and hold harmless AEM and its Affiliates and their respective directors, managers, officers, employees, agents, attorneys (acting under power of attorney), and the directors of the Company elected by AEM from and against any and all Liabilities arising out of, or related to, any operations, acts or omissions of GGR on or with respect to the Properties under this Section.

(k)

GGR will carry out Operations either directly or through the Company or Opco as directed by AEM.

8.5

Termination of GGR’s Operations

If GGR is conducting Operations pursuant to Section 8.4, AEM may terminate GGR’s authority to conduct Operations and GGR will cease conducting Operations and GGR will effect an orderly transition to AEM to enable it to reassume the conduct of Operations if:

(a)

AEM determines in its sole discretion that the Force Majeure has ended; or

(b)

GGR materially defaults under any of the provisions in Section 8.4; GGR becomes insolvent; or GGR ceases to have the legal right and authorization and the capacity in terms of personnel and expertise to carry out the intended operations on the Properties.

8.6

Termination of Sole Funding

AEM may terminate sole funding of Approved Programs and Budgets and the Sole Funding Period at any time by giving Notice to GGR. If GGR is conducting Operations pursuant to Section 8.4 on such termination, it shall cease to do so.

8.7

Actions following Termination

If this Agreement is terminated pursuant to Section 1.6(b) or Section 7.1(d), AEM shall:

(a)

Cause the directors of the Company to immediately resign.  

(b)

Immediately deliver to GGR any powers of attorney held pursuant to Section 10.11.  

(c)

Pay all outstanding accounts payable incurred or accrued by the Company and OpCo up to and including the date of termination.

(d)

Pay to GGR any reasonable costs to wind up the Company and/or OpCo should GGR decide to do such within six months of the date of termination, such reasonable costs not to exceed $10,000.

(e)

Terminate all contracts, if any, entered into by OpCo and the Company and pay all costs associated with such termination.  

(f)

Cause OpCo or the Company to terminate all of its employees, if any, including payment of any severance, termination, statutory holiday pay or other obligations arising in connection therewith.  

(g)

Pay such other costs and expenses as may be necessary to ensure the Company and OpCo have no outstanding Liabilities or obligations except for any Permits.

(h)

Deliver at no cost to GGR, not later than 90 days after the termination of this Agreement, copies of all corporate and financial information and data in its possession pertaining to the Company and OpCo.

(i)

Deliver at no cost to GGR, not later than 90 days after the termination of this Agreement, copies of all information and data in its possession pertaining to the Property and results of Operations on the Property not already provided to GGR, including maps, surveys, reports, records, studies, assays, core samples or logs in electronic or printed form, as applicable and available.

9.

ACCELERATION AND NON-OBLIGATION

9.1

AEM may accelerate any or all of the Expenditures contemplated by Sections 7.1 and 7.2.  AEM may at any time prior to the applicable Effective Date anniversary pay to GGR money in lieu of incurring Expenditures under Section 7.1 and Section 7.2 in which event AEM shall be deemed to have incurred additional Expenditures in the same amount as the amount of any such payment and in satisfaction of such of the provisions of Sections 7.1 and 7.2 as indicated by AEM at the time of the making of such payment.  Any Expenditures incurred in excess of the Expenditures to be incurred in any period under Section 7.1 or 7.2 will be carried forward and applied as a credit against the Expenditures to be incurred during the succeeding period or periods.

9.2

Subject to Section 7.3, AEM has the right and option but not the obligation to incur the Expenditures referred to in Section 7.1 and Section 7.2 and to prepare a Feasibility Study and neither anything which AEM might do nor any payment which it makes or Expenditure which it incurs will obligate it to do anything more or to make any further payment or incur any further Expenditures.

10.

PROGRAMS AND BUDGETS

10.1

Operations to be Conducted Pursuant to Programs and Budgets

Operations shall be conducted, expenses shall be incurred, and Assets shall be acquired substantially in accordance with Programs and Budgets adopted by the Board. During the Sole Funding Period, Programs and Budgets shall be deemed to have been adopted by the Board when a copy thereof has been delivered by AEM to GGR. Programs and Budgets shall be designed to set forth in reasonable detail the scope, direction and nature of Operations and establish a fiscal basis for Operations, but are not expected to constitute an enumerated list of each activity and expenditure to be undertaken by the General Manager or of the costs to be incurred and each Program shall be deemed to permit all Expenditures required to permit the General Manager to perform its duties hereunder and the incurring and payment of all costs in relation thereto.

10.2

Presentation of Programs and Budgets

During the Sole Funding Period, Programs and Budgets shall be prepared for such period as AEM may determine. Thereafter, proposed Programs and Budgets shall be prepared by the General Manager for a period of twelve months or any other reasonable period determined by the General Manager.  The first Program and Budget after the Sole Funding Period shall be prepared by the General Manager at such time as it considers appropriate.  During the budgetary period encompassed by any Program and Budget and at least two months prior to its expiration, a proposed Program and Budget for the succeeding budgetary period shall be prepared by the General Manager and submitted to each of the Shareholders.

10.3

Completed Feasibility Study

After a Feasibility Study has been prepared, either by AEM pursuant to Section 7.2(b)(iii) or otherwise, it shall be submitted to the Board with a copy to GGR. The Board shall meet within 120 days of receiving a Feasibility Study to decide whether to make a Production Decision. During this time GGR may provide comments to AEM. If the Board makes a Production Decision, it shall then instruct the General Manager to prepare an overall Program and Budget consistent with the Feasibility Study for all Operations through to the end of Development.  Until Operations have then been completed through to the end of Development, each Program and Budget adopted pursuant to this Article 10 (it being contemplated that the overall Program and Budget will be implemented through incremental Programs and Budgets approved pursuant to this Article 10) shall be consistent with the overall Program and Budget unless the Board otherwise directs.

10.4

Adoption of Programs and Budgets

Within 30 days after submission of any proposed Program and Budget following the Sole Funding Period, the Board shall hold a meeting at which the Board shall:

(a)

Approve the proposed Program and Budget; or

(b)

Propose modifications to the proposed Program and Budget; or

(c)

Reject the proposed Program and Budget.

If at such meeting the Board adopts the proposed Program and Budget or some modification thereof, the Program and Budget thus adopted shall be the Adopted Program and Budget for the ensuing Budget Period.  If at such meeting the Board fails to adopt a Program and Budget, the Board and the General Manager shall, subject to the provisions of Section 5.10, immediately endeavour in good faith to develop a Program and Budget for the ensuing Budget Period which may be adopted by the Board.

10.5

Election to Participate in Programs and Budgets

By Notice to the General Manager within 30 days after the adoption of an Adopted Program and Budget following the Sole Funding Period, and notwithstanding its vote concerning the adoption of a Program and Budget, a Shareholder may elect to contribute to such Adopted Program and Budget (i) fully in proportion to its respective Ownership Interest; (ii) in some lesser amount than its respective Ownership Interest, or; (iii) not at all, in which cases its Ownership Interest shall be recalculated as provided in Section 10.6 of this Agreement.  If a Shareholder fails to so notify the General Manager of its election with respect to such an Adopted Program and Budget within such 30 day period, the Shareholder shall be deemed to have elected to contribute to such Adopted Program and Budget in proportion to its respective Ownership Interest as of the beginning of the period covered by the Adopted Program and Budget.

10.6

Voluntary Reduction in Ownership

(a)

A Shareholder may elect, in accordance with the procedures specified in Section 10.5, not to contribute to an Adopted Program and Budget or to contribute in some lesser amount than its respective Ownership Interest.  If a Shareholder elects to contribute to an Adopted Program and Budget in some lesser amount than its respective Ownership Interest, or not at all, or, if after so electing to contribute, fails to timely do so and the non-defaulting Shareholder exercises its option under Section 11.1(c), the Ownership Interest of that Shareholder shall be recalculated at the time of election (the “Diluting Date”) in accordance with the following formula:

R =  REA (S)   X 100%
       REA (AS)

Where:

R

=

The recalculated Ownership Interest of the Diluting Shareholder.

REA(S)

=

The Diluting Shareholder’s Equity Account balance immediately prior to the Diluting Date, as adjusted for anticipated debits and credits to the Diluting Shareholder’s Equity Account balance based on the Adopted Program and Budget and the Diluting Shareholder’s election as to contributions.

REA(AS)=

The Equity Account balance for all Shareholders immediately prior to the Diluting Date, as adjusted for anticipated debits and credits to all Shareholder’s Equity Account balances based on the Adopted Program and Budget and all Shareholder’s elections as to contributions.

The Ownership Interest of the Non-Diluting Shareholder shall be increased by the amount of the reduction in the Ownership Interest of the Diluting Shareholder, and if the Non-Diluting Shareholder elects not to fund the entire deficiency the General Manager shall adjust the Program and Budget to reflect the funds available.

Whenever the Ownership Interests are recalculated, the Equity Accounts of the Shareholders will be adjusted to bear the same ratio to each other as their recalculated Ownership Interest.

The recalculations made under this Section 10.6(a) will be provisional and subject to the final adjustments provided for under Section 10.6(b).

(b)

At the end of each Budget Period, a final recalculation of each Shareholder’s Ownership Interest shall be made, with the provisional recalculations made under Section 10.6(a) adjusted to reflect actual debits, credits and contributions made during that period.  A Diluting Shareholder shall retain all of its rights and all of its obligations (except as provided in Section 10.6(a) above and subject to the provisions of Section 10.10) including the right to participate in future Programs and Budgets at its recalculated Ownership Interest.

(c)

A Shareholder that has its Ownership Interest reduced pursuant to this Section 10.6 shall have the right to redeem its position if the actual costs are less by at least 20% than the budget as set out in the Program and Budget to which the Shareholder had limited its contributions; otherwise the reduction is final.  The General Manager shall at least 20 days prior to the Board meeting at which the next subsequent Program and Budget is to be adopted provide to all Shareholders a complete statement of costs incurred to date and an estimate of costs to be incurred to complete the Program and Budget to which the Diluting Shareholder did not contribute to the full extent of its Ownership Interest.   If the Diluting Shareholder has the right to redeem its position as aforesaid, the Diluting Shareholder shall inform the Board prior to the said meeting of its wish to do so.  A Shareholder redeeming its Ownership Interest shall pay the costs it would have paid had it participated to the fullest extent possible in the Program and Budget, plus interest thereon from the date of any expenditure to the date of payment at the Effective Interest Rate plus 10% but in no event at a rate higher than the maximum rate permitted by Law. Payment shall be made by the redeeming Shareholder to the Company (which will make such adjustments as are required to credit or reimburse such payment the other Shareholder), within 30 days of receipt from the Company of an invoice for its share.

10.7

Budget Overruns and Program Changes

After the Sole Funding Period, the General Manager shall promptly notify the Board of any actual or anticipated material departure from an Adopted Program and Budget. Budget overruns shall be borne by the Shareholders in proportion to their respective Ownership Interests as of the time the overrun occurs unless the overrun is due to the gross negligence or wilful default of the General Manager in which case any such overrun will be borne by the General Manager.

10.8

Emergency and Unexpected Expenditures

Notwithstanding any other provision of this Agreement, in case of emergency, the General Manager may take any reasonable action it deems necessary to protect life or property, to protect the Assets or to comply with Law.  The General Manager shall promptly notify the Board of any emergency expenditure.  The costs of actions resulting from emergencies shall be borne by the Shareholders in proportion to their respective Ownership Interests as of the time the emergency occurs.

10.9

Amendment of Programs and Budgets

At any time, the General Manager, after consultation with the Chairman of the Board, may propose the amendment of an Adopted Program and Budget, in which event the procedures of Section 10.4 shall apply.  If as a result of such proposed amendment, the said Program and Budget is revised and the amended Budget exceeds the previous adopted Budget by more than 10%, each Shareholder shall make one of the elections specified in Section 10.5 with respect to such revised Program and Budget, within the time therein specified.

10.10

Elimination of Minority Interest

(a)

Upon the reduction of its Ownership Interest to 10% or less, other than as a result of a Transfer of some but not all of its Ownership Interest as permitted in Article 15, the Ownership Interest owned by the reducing Shareholder shall be automatically surrendered to the Company for cancellation and cancelled, in consideration for the granting by the Company (or at the direction of the Company by OpCo) to such reducing Shareholder (now Royalty Holder) of the Royalty. The Royalty Holder shall be entitled to receive only the Net Smelter Returns Royalty thereafter generated by the Company, as provided in Schedule C.  The Royalty Holder shall have no Ownership Interest in, or any rights with respect to, the Company, OpCo or the Properties except as provided in Schedule C. As provided in Schedule C, the royalty shall initially be 2% of Net Smelter Returns, but the Company may at any time purchase a reduction of the rate to 1% of Net Smelter Returns on payment to the Royalty Holder of $1,000,000 for that purpose.

(b)

If a Shareholder has transferred some but not all of its Ownership Interest, the provisions of this Section 10.10 shall be applied to the aggregate Ownership Interests held by the transferring Shareholder and its transferees, so that if the aggregate Ownership Interests held by such parties, their successors and assigns, is reduced to 10% or less, the Ownership Interest owned by the reducing Shareholders shall automatically be surrendered to the Company for cancellation and cancelled, in consideration for the granting by the Company (or at the direction of the Company by OpCo) to such reducing Shareholders collectively (now Royalty Holder) of the Royalty. The Royalty Holder shall be entitled to receive only the Net Smelter Returns Royalty thereafter generated by the Company, as provided in Schedule C.

10.11

Transfers of Ownership Interests and Powers of Attorney

(a)

A Shareholder shall, within five days after the event or election causing a reduction in its Ownership Interest as provided in Section 10.6, transfer to the other Shareholder the number of Shares and the amount of any loan by such transferring Shareholder to the Company, in each case in the same proportions, necessary to reflect the change in the respective Ownership Interests of the Shareholders; provided that the Shareholder shall also have the right to require the Company to issue additional Shares to it to reflect the change.  Any such transfer will be effected by a deed or an instrument of assignment in a form and having such content as is reasonably acceptable to the receiving Shareholder and by such other documents and instruments as reasonably required by the receiving Shareholder.

(b)

Each Shareholder hereby irrevocably grants to the General Manager a power of attorney with full power of substitution to make all transfers of Shares, loans and Ownership Interests, to execute all deeds and conveyances, to record the same and take all other actions necessary to implement the provisions of this Section 10.11 and to implement Sections 6.2, 10.10 and 11.1 and Article 7. If a Shareholder whose Ownership Interest is reduced fails to take all action necessary to effect a transfer of its Ownership Interest as required by this Agreement, the General Manager shall exercise such power of attorney so as to promptly transfer from the Shareholder whose Ownership Interest is reduced to the other Shareholder or the Company as the case may be the requisite percentage of Ownership Interest in the Company, and otherwise execute and record such other documents and instruments as are reasonably required to fully evidence such transfer.  If a Shareholder whose Ownership Interest is transferred and exchanged for a Net Smelter Returns Royalty pursuant to Sections 10.10 or  11.1(b) fails to take all actions necessary to effect a transfer of its Ownership Interest, the Chairman of the Board shall promptly, and is hereby authorized to, take all actions necessary to effect such a transfer and exchange ..

(c)

Promptly following the date of this Agreement, the Shareholders shall take all actions reasonably necessary to implement the provisions of this Section 10.11, including the execution of a formal power of attorney in such form as the General Manager may reasonably require, before a Notary Public, to authorize the full implementation of all provisions hereof.

(d)

The Shareholders acknowledge and agree that the conversion of an Ownership Interest provided for in Sections 10.10 and 11.1(b) of this Agreement to the Net Smelter Returns Royalty is a reasonable means of liquidating any damages as may be incurred by the nonconverting Shareholder as a result of the circumstances giving rise to the conversion.

10.12

Limited Continuing Liabilities Upon Adjustment of Ownership Interests

The increased Ownership Interest accruing to a Shareholder as a result of the transfer of the other Shareholder’s Ownership Interest pursuant to Sections 10.6, 10.10 or 11.1 or Article 7 shall be free of Encumbrances, arising by, through, or under such other Shareholder, other than any which the recipient Shareholder has given its written consent.

11.

FAILURE TO MAKE CONTRIBUTIONS

11.1

Pre-ability to water down

Subject to the provisions of Section 11.2, the Shareholders acknowledge that if a Shareholder defaults in making a contribution to an Adopted Program and Budget in which, pursuant to Section 10.5 it has elected to participate or is deemed to have elected to participate, it will be difficult to measure the damages resulting therefrom.  The non-defaulting Shareholder may, with respect to any such default not cured within 15 days after delivery of Notice of such default to the defaulting Shareholder, elect one of the following remedies by giving Notice to the defaulting Shareholder:

(a)

The non-defaulting Shareholder shall have the right but not the obligation to advance or cause to be advanced to the Company the defaulted contribution on behalf of the defaulting Shareholder and treat the same, together with any accrued interest, as a demand loan to the defaulting Shareholder (a “Default Loan”) bearing interest from the date of the advance until paid at the Effective Interest Rate plus an additional two percent, but in no event at a rate higher than the maximum rate permitted by Law. The failure to repay a Default Loan upon demand shall be a default.  Failure to timely repay any Default Loan shall entitle the other Shareholder to enforce the security for the loan and to exercise the rights provided in Section 11.1(b).

Each Shareholder hereby grants to the other a lien upon its Ownership Interest, the Assets and a pledge of and security interest in its Ownership Interest to secure any Default Loan made hereunder, including interest thereon, reasonable attorneys fees and all other reasonable costs and expenses incurred in recovering the loan with interest and in enforcing such lien, pledge, or security interest, or both.

(b)

The non-defaulting Shareholder may elect, by Notice to the defaulting

(c)

Shareholder at any time within 15 days after expiration of the 15 day cure period provided in this Section 11.1, or on failure to repay a Default Loan on demand to have all of the Ownership Interest owned by the defaulting Shareholder exchanged for the Net Smelter Returns Royalty, determined as provided in Schedule C, upon which transfer and exchange the defaulting Shareholder shall have no Ownership Interest in, or any rights with respect to, the Company or the Properties except as provided in Schedule C.

(d)

The non-defaulting Shareholder shall have the right but not the obligation to contribute to the Company the amount of the defaulted contribution as an additional contribution and elect that the Ownership Interest of the defaulting Shareholder shall be reduced and the Ownership Interest of the non-defaulting Shareholder shall be increased in accordance with the formula set forth in Section 10.6 of this Agreement, treating the additional contribution as if it were a contribution under Section 12.2 of this Agreement.

11.2

Remedies Cumulative

A non-defaulting Shareholder may elect the remedies available to it under this Agreement, or, to the extent a Shareholder has a cause of action for damages, or a lien, pledge or security interest under applicable Law, it shall be entitled to its rights and remedies at Law.  All such remedies shall be cumulative.  The election of one or more remedies shall not waive the election of any other remedies.

12.

ACCOUNTS, SETTLEMENTS AND DIVIDENDS

12.1

Monthly Statements

The General Manager shall by the twentieth of each month submit to the Board a statement of account reflecting in reasonable detail the charges and credits to the Company during the preceding month.  And, during the Sole Funding Period, the General Manger shall simultaneously provide such statement of account to GGR.

12.2

Requests for Additional Operating Equity

After the expiry of the Sole Funding Period, the Board may request additional equity from the Shareholders in accordance with the following procedure. The General Manager shall submit to each Shareholder prior to the last day of each calendar quarter, a request for the contribution of additional equity to the Company in an amount corresponding to the estimated cash requirements for the next calendar quarter.  Subject to the terms of any outstanding Default Loan or demand loan, the General Manager shall apply as a credit against the contribution request any funds held by the Company for the benefit of the Shareholder to which the contribution request is directed.  Within ten days after receipt of a contribution request, each Shareholder shall pay to the Company its proportionate share of the amount by which its requested contribution exceeds its available share of such credits.  Time is of the essence with respect to such payments.  The General Manager shall at all times maintain a cash balance approximately equal to the rate of disbursement for up to 90 days.  All funds in excess of immediate cash requirements shall be invested for the benefit of the Company in interest-bearing accounts in such bank or banks as is determined by the General Manager.

Contributions by Shareholders shall be made in cash by means of capital contributions or , if the Board so determines, by loans evidenced by unsecured debt obligations of the Company to such Shareholder or its designee, evidenced by a promissory note in such form as the General Manager may reasonably require.  For purposes of determining the amount of contributions made by the Shareholders under Section 10.6, the amount of principal outstanding that has been contributed in the form of loans evidenced by unsecured debt obligations and accrued but unpaid interest thereon, shall be treated as a contribution to the Company.  It is agreed that amounts so contributed in the form of unsecured debt obligations shall be at a variable interest rates not to exceed the then current Effective Interest Rate plus two percent, and that no interest, principal or other payments shall be made with respect to such debt obligations except to the extent that the Board declares there is Cash Available for Distribution.  Interest shall accrue until the same is paid. The Shareholder for whose benefit the loan was extended shall pay all stamp tax and Mexican withholding tax, and shall be responsible for any and all costs of central bank reserve requirements.

12.3

Failure to Contribute Additional Operating Equity

A Shareholder that fails to make a contribution in the manner and amount and at the times specified in Section 12.2 shall be in default, and the amounts of the defaulted contribution request shall bear interest from the date due at the Effective Interest Rate, plus an additional ten percent, but in no event, shall the rate of interest exceed the maximum permitted by Law. The non-defaulting Shareholder shall have those rights, remedies and elections specified in Section 11.1.

12.4

Cash Available for Distribution

“Cash Available for Distribution” means on any date of calculation, the positive difference resulting from;

(a)

the amount of cash, and cash equivalents, in all accounts of the Company plus any sale receivables:

(b)

less, without duplication, the sum of  the following items:

(i)

current liabilities for the next three months but including all current liabilities for Mexican taxes payable and excluding long term debt and debt required for working capital purposes,

(ii)

debt service requirements for all third party Company debt due within three months;

(iii)

budgeted operating and capital expenditures forecast for the next two months and reasonable and normal reserve accounts for reclamation and other governmental obligations.

Cash Available for Distribution shall exclude the effects of any monetary revaluations required by Mexican Law for tax or other purposes but shall include any cash effects of currency translation adjustments.

12.5

Distributions

At least annually, the Board shall determine the Cash Available for Distribution and, subject to applicable Law, may distribute it to the Shareholders in accordance with their respective rights provided in this Agreement. All distributions of Cash Available for Distribution shall be made to the Shareholders in proportion to and in accordance with their respective Ownership Interests.

12.6

Audits

Upon request made by any Shareholder within twelve months following the end of any calendar year, an audit of the accounting and financial records of the Company for such calendar year (or other accounting period) shall be performed by the Company’s independent external firm of accountants.  All written exceptions to the audit and claims upon the Company for discrepancies disclosed by such audit shall be made not more than three months after receipt of the audit report.  Failure to make any such exception or claim within the three month period shall mean the audit is correct and the accounting and financial matters subject to such audit are binding upon the Shareholders.

A Shareholder shall be entitled upon notice to the General Manager to request that the independent external firm of accountants of the General Manager provide that Shareholder with their opinion that any invoice or statement delivered pursuant to Section 12.1 in respect of the period referred to in Section 1.3 of Schedule B has been prepared in accordance with this Agreement.  The cost of the accountant’s opinion referred to in this Section 12.6 shall be solely for the account of the Shareholder requesting the accountant’s opinion, unless the audit disclosed an error which is in excess of one percent and adverse to that Shareholder, in which case the cost shall be solely for the account of the General Manager.

12.7

Withholding

Notwithstanding anything to the contrary, all payments that the Company and/or OpCo is required to make under this Agreement to the Shareholders shall be subject to withholding of such amounts relating to income taxes, withholding taxes and other Taxes and other amounts as the General Manager may reasonably determine the Company and/or OpCo must withhold pursuant to any applicable Law.  In lieu of withholding such amounts, in whole or in part, the Company and/or OpCo may, in the General Manager’s sole discretion, accept other provision for payment of Taxes as required by Law, provided it is satisfied that all requirements of Law affecting its responsibilities to withhold such amounts have been satisfied.

13.

SALE OF PRODUCTS

13.1

Further Refinement

Unless the Company produces direct shipping ore exclusively, the Company shall arrange for any further processing of Products as the Board may determine.

13.2

Sale of Products

AEM will have the right to market and sell the Products produced from the Properties and may charge the Company a reasonable portion of its marketing and sales costs and a sales commission in accordance with industry standards.  All Products shall be sold for the account of the Company on commercially reasonable terms as determined by the Board, unless distribution in kind to the Shareholders is authorized by the Board.

14.

INSOLVENCY OF A SHAREHOLDER

14.1

Deemed Offer to Sell Interests

If any of the following shall occur, the Shareholder committing or subject to such act shall promptly notify the other Shareholder in writing, and shall be deemed to have offered to sell its Ownership Interest and any outstanding loans by the Shareholder to the Company to the other Shareholder or its designee on the terms and conditions hereinafter specified:

(a)

A receiver, liquidator, assignee, custodian, trustee, sequester or similar official for a substantial part of a Shareholder’s assets is appointed and such appointment is neither made ineffective nor discharged within 60 days after the making thereof, or such appointment is consented to, requested by, or acquiesced in by the Shareholder; or

(b)

The Shareholder commences a voluntary case under any applicable bankruptcy, insolvency, or similar Law now or hereafter in effect; or consents to the entry of an order for relief in an involuntary case under any such Law or to the appointment of or taking possession by a receiver, liquidator, assignee, custodian, trustee, sequestrator, or other similar official of any substantial part of its assets; or makes a general assignment for the benefit of creditors; or fails generally to pay its debts as such debts become due; or takes corporate or other action in furtherance of any of the foregoing; or

(c)

Entry is made against a Shareholder of a judgment, decree or order for relief affecting a substantial part of its assets by a court of competent jurisdiction in an involuntary case commenced under any applicable bankruptcy, insolvency, or other similar Law of any jurisdiction now or hereafter in effect.

The price to be paid by the remaining Shareholder or its designee shall be an amount equal to 75% (which the Shareholders agree adequately takes into account the risks of continuing operations and commodity price fluctuations) of the other Shareholder’s Ownership Interest multiplied by the fair market value of the Assets (using a discount rate of 5% if applicable) being the average of the fair market value stated in three appraisals obtained by the remaining Shareholder from independent qualified appraisers of recognized standing competent in the appraisal of mining properties.

If the remaining Shareholder desires to exercise the purchase right granted to it pursuant to this Section 14.1, it shall so notify the other Shareholder within 30 days after the receipt of written notification from the other Shareholder of the occurrence of the event which gave rise to the deemed offer of sale.

14.2

Non-Compete Covenants

A Shareholder that ceases to hold an Ownership Interest as a result of the operation of the provisions of Articles 10, 11, or 14 of this Agreement, or an Affiliate thereof, shall not directly or indirectly acquire any interest in rights to or interests in minerals or other property or water or the right to explore within the area encompassed by the Properties or the Area of Interest for one year after the effective date of withdrawal.  If a former Shareholder, or an Affiliate of a former Shareholder, breaches this Section 14.2, such former Shareholder or Affiliate shall be obligated to offer to convey to the other Shareholder, without cost, any such property or water interest so acquired.  Such offer shall be made in writing and can be accepted by the other Shareholder at any time within 60 days after it is received.

15.

TRANSFER OF INTEREST

15.1

General

A Shareholder shall not have the right to Transfer to a third party all or any part of its Ownership Interest or outstanding loans to the Company (if any) or any interest therein, except as provided in this Article 15.  Furthermore, a Royalty Holder shall not have the right to Transfer to a third party all or any part of the Net Smelter Returns Royalty or any interest therein until complying with the requirements of Section 15.3.

15.2

Limitations on Free Transferability

A Shareholder may Transfer any interest in the Company, in the Assets or outstanding loans (if any) only by and with a Transfer of Ownership Interest.  Any Transfer of Ownership Interest shall be subject to the following terms and conditions:

(a)

If the Transfer is not to an Affiliate, the transferring Shareholder must secure the written consent of the non-transferring Shareholder and, if so secured, must then provide the transferee with a complete copy of this Agreement before the Transfer becomes effective.

(b)

No transferee , whether or not an Affiliate, shall have the rights of a Shareholder unless and until the transferring Shareholder has provided to the other Shareholder Notice of the Transfer, and the transferee, as of the effective date of the Transfer, has committed in writing to be bound by this Agreement to the same extent as the transferring Shareholder.

(c)

The transferring Shareholder and the transferee shall bear all Tax consequences of the Transfer.

(d)

If the Transfer involves the grant of a security interest by mortgage, deed of trust, pledge, lien or other encumbrance of any interest in the Ownership Interest to secure a loan or other indebtedness of a Shareholder in a bona fide transaction, the holder of such security interest shall have agreed in writing to be subordinate to the terms of any Default Loan and this Agreement, including the rights and interests of the other Shareholder hereunder.  Upon any foreclosure or other enforcement of rights in the security interest the acquiring third party shall be deemed to have assumed the position of the encumbering Shareholder with respect to this Agreement and the other Shareholder, and it shall comply with and be bound by the terms and conditions of this Agreement.

(e)

If a Transfer is made of less than all of the Ownership Interest of a Shareholder, the transferring Shareholder, and its transferee shall act and be treated as one Shareholder; provided that the provisions of this Section 15.2(e) shall not apply to a transfer of an Ownership Interest made pursuant to Sections 10.6 or 11.1.

15.3

Right of First Refusal

Except as otherwise provided in Section 15.4, if a Shareholder or a Royalty Holder (an “Offeror”) desires to Transfer all or any part of its Ownership Interest and/or outstanding loans to the Company or the Net Smelter Returns Royalty or any interest therein, the other Shareholder shall have a first right to acquire such Ownership Interest and/or outstanding loans to the Company or the Net Smelter Returns Royalty or the interest therein to be transferred as provided in this Section 15.3 (the Shareholder with a first right being hereinafter called the “Offeree”).

(a)

An Offeror intending to Transfer all or any part of its Ownership Interest and/or outstanding loans to the Company or the Net Smelter Returns Royalty or any interest therein shall promptly notify the Offeree of its intentions.  The Notice shall state the sale price in cash and all other pertinent terms and conditions of the intended transaction, and shall be accompanied by a copy of the offer or contract.  If any portion of the consideration to be received is in the form of an undertaking to act or refrain from acting or provide consideration in some other non-monetary form, the Notice shall describe such consideration and its monetary value, based on the fair market value of any such nonmonetary consideration, which shall be included in, and may be satisfied by payment of, the offered cash sale price.  The Offeree shall have 60 days from the date such Notice is delivered to notify the Offeror whether it elects to acquire the offered interest at the same price and on the same terms and conditions as set forth in the Notice (or their monetary equivalent).  If it does so elect, the transaction shall be consummated promptly and within 30 days after Notice of such election is delivered to the Offeror.

(b)

If the Offeree fails to elect to exercise its first right within the period provided for in Section 15.3(a), the Offeror shall have 180 days following the expiration of such period to consummate the Transfer to a third party at a price and on terms no less favourable than those offered by the Offeror to the Offeree in the Notice required by Section 15.3(a).

(c)

If the Offeror fails to consummate the Transfer to a third party within the period set forth in Section 15.3(b), the first right of the Offeree in such offered interest shall be deemed to be revived.  Any subsequent proposal to Transfer such interest shall be conducted in accordance with the procedures set forth in this Section 15.3.

15.4

Exceptions to Right of First Refusal

Section 15.3 shall not apply to the following, provided that the transferring Shareholder or Royalty Holder is not in default under any material provision of this Agreement or a Default Loan, and that neither such Shareholder or Royalty Holder nor its transferee shall be in such default immediately after the Transfer:

(a)

A Transfer by a Shareholder of all or any part of its interest in its Ownership Interest and/or outstanding loans to the Company or by the Royalty Holder of the Net Smelter Returns Royalty to an Affiliate, provided the transferring Shareholder or Royalty Holder shall not be released from its obligations and that if the Affiliate to which an Ownership Interest and/or outstanding loans to the Company or Net Smelter Returns Royalty has been transferred ceases to be an Affiliate of the transferring Shareholder or Royalty Holder, it shall be deemed to have offered to sell its Ownership Interest and/or outstanding loans to the Company or Net Smelter Returns Royalty as the case may be to the non-Transferring Shareholder for a purchase price then agreed between the transferring Shareholder and the non-transferring Shareholder or Royalty Holder, as the case may be, or failing agreement at the fair market value thereof determined by arbitration pursuant to 20.2, and the provisions of Section 15.3 shall apply once the price has been so determined either by agreement or arbitration;

(b)

An incorporation, merger, consolidation, amalgamation, corporate reorganization, or liquidation of a Shareholder or the Royalty Holder, provided that the surviving entity shall own, immediately after such Transfer, substantially all of the assets and obligations of that Shareholder or the Royalty Holder, provided further that any such Transfer will not result in or occur as part of a change in Control of the transferring Shareholder or Royalty Holder;

(c)

The grant by a Shareholder or the Royalty Holder of a security interest in its Ownership Interest or the Net Smelter Returns Royalty as the case may be by mortgage, deed of trust, pledge, lien or other encumbrance to finance payment or performance of its obligations under this Agreement;

(d)

A sale or other commitment or disposition of Products or proceeds from sale of Products by a Shareholder upon distribution of such Products to it; or

(e)

Transfer of any indirect interest in the Ownership Interest or Net Smelter Returns Royalty which is effected by means of the Transfer of an ownership interest in the Shareholder or Royalty Holder as the case may be, including, without limitation, the issuance or Transfer of securities of the Shareholder or Royalty Holder, provided that, either (1) such Transfer will not result in a change of Control of the Shareholder or Royalty Holder, or (2) if such Transfer results in a change of Control of the Shareholder or Royalty Holder, the Transfer arises from a public distribution of ownership interest in the Shareholder or Royalty Holder or an Affiliate of the Shareholder or Royalty Holder as the case may be.

16.

REPRESENTATIONS AND WARRANTIES

16.1

Representations and Warranties

Each Party represents and warrants to the other Party that:

(a)

It is a corporation duly organized and in good standing in the state or other jurisdiction of its organization and is qualified to do business and is in good standing in those states where necessary in order to carry out the purposes of this Agreement.

(b)

It has the legal capacity to enter into and perform this Agreement and all transactions contemplated herein and all necessary corporate approvals and authorizations required to authorize it to enter into and perform this Agreement, in each case have been properly obtained and are in full force and effect.

(c)

It will not breach any other material agreement or arrangement by entering into or performing this Agreement.

(d)

It is not subject to any governmental order, judgment, decree, debarment, sanction or Laws that would preclude or prevent the entering into this Agreement or the performing of its actions as contemplated herein, or the permitting or implementation of Operations under this Agreement.

(e)

The execution, delivery and performance of this Agreement will not conflict with or result in a breach of or default under any agreement or other instrument of obligation to which it is a party or by which it may be bound.

(f)

This Agreement constitutes its legal, valid and binding obligation.

16.2

GGR further represents and warrants to AEM that:

(a)

The mining concessions comprised in the Properties have been duly and validly issued pursuant to all applicable laws and regulations including without limitation the Mining Law of Mexico and the regulations thereunder and they are in good standing and the information in Schedule A is accurate.

(b)

Minera Delta is a corporation duly organized, existing and in good standing and possesses the legal capacity required under Mexican law to hold as proprietor the ownership rights in and to the Concessions. Minera Delta is a wholly owned subsidiary of GGR. Minera Delta is the sole legal, beneficial and recorded owner of the Concessions and Minera Delta owns and possesses and has good and marketable title to the Concessions free and clear of Encumbrances or other claims whatsoever or limitations of ownership and, without limiting the generality of the foregoing, Minera Delta has not entered into and there are not any agreements or options to grant or convey any interest in the Concessions or to pay any royalties with respect to the Concessions.

(c)

All activities on or in relation to the Properties up to the date hereof (including performance of minimum assessment work and filing of reports with respect to minimum assessment work) have been in compliance with all applicable Laws including those for the protection of the environment and no conditions exist which could give rise to the making of a remediation order or similar order in respect of the Properties or which could subject OpCo, the Company or AEM to liability.

(d)

GGR has not, and to the best of its knowledge and following due inquiry, nor has any other Person, in relation to the Properties received any notice of any breach of any Law or notice of default of any of the terms or provisions of any agreements or instruments in respect of the Properties and it has no knowledge of any act or omission or any condition on the Properties which could be give rise to any such notice.

(e)

All taxes, mining concession fees (derechos mineros), rates or other levies of every nature and kind heretofore levied against the Properties have been fully paid and satisfied.

(f)

No consent or approval of any Governmental Authorities or other Persons are required for the execution, delivery or performance of this Agreement or the transfer of any interest in the Properties.

(g)

GGR or Minera Delta as the case may be holds, and has at all times held, all material licenses, franchises, permits, orders, consents, approvals, registrations, authorizations, concessions, qualifications and filings with and under all applicable Laws (the “Permits”) necessary for the lawful conduct of its business as it is presently being conducted; (ii) all such Permits are in full force and effect; (iii) GGR or Minera Delta as the case may has complied in all material respects with the terms of the Permits and there are no pending modifications, amendments or revocations of any such Permits; (iv) GGR or Minera Delta as the case may be has timely applied for all required renewals of such Permits; (v) the Properties do not hold any Hazardous Material, nor are they subject to any Environmental Liability that would be expected to result in an Environmental Liability according to the Environmental Laws; and (vi) there are no pending (or, to the knowledge of GGR, threatened) material legal, administrative, regulatory or other suits, actions, claims, audits, assessments, arbitrations or other proceedings or, to the knowledge of GGR, investigations or inquiries with respect to the possible revocation, cancellation, suspension, limitation or nonrenewal of any Permits, and there has occurred no event which (whether with notice or lapse of time or both) could reasonably be expected to result in or constitute the basis for such a revocation, cancellation, suspension, limitation or nonrenewal thereof.  The execution and delivery of this Agreement, the consummation of the transactions contemplated hereby or the performance by GGR of its obligations hereunder will not result in the suspension, revocation, impairment, forfeiture or nonrenewal of any Permit.

(h)

GGR has delivered to or made available for inspection by AEM all information concerning title to the Properties in its possession or control and has delivered to or made available for inspection by AEM all Existing Data in its possession and control.

(i)

Neither GGR nor Minera Delta is a party to any agreement in respect of the Properties other than those agreements that have been disclosed in their entirety to AEM.

(j)

All public disclosure in respect of the Properties which has been disclosed by GGR is accurate and complete and does not contain any misrepresentation or untrue statement of a material fact or omits to state any material fact.

(k)

None of the foregoing representations and warranties contains any untrue statement of a material fact or omits to state any material fact.

16.3

The representations and warranties contained in Section 16.2 are provided for the exclusive benefit of AEM and a breach of any one or more of them may be waived by AEM in writing in whole or in part at any time without prejudice to its rights in respect of any other breach of the same or any other representation or warranty.

16.4

Indemnity

Each Party shall indemnify and save the other Party harmless from and against all Liabilities suffered or incurred by such other Party by reason of a breach of any representation or warranty given by it under this Article 16.

17.

CONFIDENTIALITY

17.1

General

All information obtained in connection with the conduct of Operations which is designated as confidential by the General Manager or the Board, the financial terms and conditions of this Agreement and all material technical, geologic, financial, and corporate strategy or planning information relating to the Properties, shall be exclusive property of the Shareholders and, except as provided in Section 17.2 of this Agreement, shall not be disclosed to any third party or the public without the prior written consent of the other Shareholder, which consent shall not be unreasonably withheld.

17.2

Exceptions

The consent required by Section 17.1 shall not apply to a disclosure:

(a)

Of such information as is necessarily disclosed to a third party by Operations or is necessary to disclose to implement a Program and Budget;

(b)

Of such information as is reasonably necessary to disclose to an Affiliate, consultant, contractor, advisor, or representative, that has a bona fide need to be informed and is informed of the confidentiality obligations of the disclosing Shareholder ;

(c)

To a third party to whom the disclosing Shareholder contemplates a Transfer of

(d)

all or any part of its Ownership Interest , provided that such transferee has executed a non-disclosure or similar agreement in a form and substance reasonable acceptable the other Shareholder ;

(e)

To a governmental agency or to the public which disclosure the disclosing Shareholder believes in good faith is required by applicable Law or the rules of any stock exchange on which its stock is traded;

(f)

Of any information which at the time of disclosure is in the public domain, except as a result of a breach of this Agreement;

(g)

To a bank, insurance company or other financial institution and to its advisors in connection with negotiations concerning financing arranged by a Shareholder, subject to reasonable requirements concerning use and confidentiality;

(h)

By a Shareholder of information which it owns or controls independently of the Company, but which was furnished to the Company by that Shareholder for use by the Company;

(i)

In the course of arbitration or other legal proceedings; or

(j)

As required by applicable securities legislation or the rules of securities regulatory authorities.

In any case to which this Section 17.2 is applicable, the disclosing Shareholder shall give Notice to the other Shareholder concurrently with the making of such disclosure.  As to any disclosure pursuant to Sections 17.2(b), 17.2(c) or 17.2(g), such third party recipient shall first agree to protect the confidential information from further disclosure to the same extent as the Shareholders are obligated under this Article 17.

17.3

Duration of Confidentiality

The provisions of this Article 17 shall apply during the term of this Agreement, and shall continue to apply to a Shareholder who has sold or otherwise has been deemed to have sold its Ownership Interest in accordance with Sections 10.10 or 11.1(b) or who Transfers all of its Ownership Interest, for one year following the date of such occurrence.

17.4

Public Announcements

Except as required by Law or regulatory authority, neither Shareholder shall make any public announcements or statements concerning this Agreement or the Properties without the prior approval of the other Shareholder, not to be unreasonably withheld. The text of any public announcements or statements including news releases which a Shareholder intends to make pursuant to the aforesaid exception in this Section 17.4 shall be made available to the other Shareholder not less than 48 hours (or such lesser period of time as the Shareholder reasonably considers to be available before its failure to make such announcement or statement will constitute a breach of applicable Law or regulatory requirements) prior to publication and it shall have the right to make suggestions for changes therein.  If a Shareholder or any Affiliate is identified in such public announcement or statement it shall not be released without the consent of that Shareholder in writing, unless such announcement or statement is required by Law or regulatory authority.

18.

NOTICES

18.1

All notices, payments and other required communications (“Notices”) to one of AEM or GGR by the other shall be in writing and shall be addressed respectively as follows:

If to AEM:

Agnico-Eagle Mines Limited

145 King Street East

Suite 400

Toronto, Ontario

M5C 2Y7

Facsimile:

(416) 367-4681

Attention:

General Counsel, Senior VP Legal and Corporate Secretary

With a copy to:

Agnico Eagle México, S.A. de C.V.

Paseo Bolívar 206

Col. Centro

31000 Chihuahua, Chih Mexico

Facsimile: 01-614-1803100

Attention: Mr. Luis Felipe Medina y/o Mr. Roger Doucet

If to GGR:

Golden Goliath Resources Ltd.

Suite 711, 675 West Hastings Street

Vancouver, British Columbia

V6B 1N2

Facsimile:

(604) 685-3764

Attention:

President

With a copy to:

Minera Delta S.A. de C.V.

Juan Felipe Orozco Num. 516

Col. San Felipe. C.P.

31240. Chihuahua, Chih

Facsímile:

01-614-4146226

Attention:

Daniel Nofrietta Fernandez

All Notices shall be given (1) by personal delivery to the addressee, or (2) by electronic communication, capable of producing a printed transmission, or (3) by registered or certified mail or commercial carrier return receipt requested.  All Notices shall be effective and shall be deemed delivered (1) if by personal delivery on the date of delivery if delivered during normal business hours and, if not delivered during normal business hours, on the next business day following delivery, (2) if by electronic communication on the next business day following receipt of the electronic communication, and (3) if solely by mail or commercial carrier on the next business day after actual receipt.  A Shareholder may change its address by Notice to the other Shareholder.

19.

AREA OF INTEREST; SURRENDER OF PROPERTY

19.1

Area of Interest

Subject to Section 19.2, the Area of Interest shall be that area which is within two kilometers of any of the boundaries of the mining concessions comprised in the Properties (which, for greater certainty, includes the area comprised within such mining concessions) as of the Effective Date, increased or reduced from time to time in accordance with this Article 19.

19.2

Exclusions from the Area of Interest

The Area of Interest shall exclude:

(a)

any mineral claims, permits, concessions, leases, licences, patents or other forms of mineral tenure or water or other property rights that are currently held by any of the Parties as of the Effective Date and any extension or renewals thereof; and

(b)

the caduco (expired) L-shaped mineral claim located on the south border of the Nopalera claim and adjacent to the El Pavo Real claim.

19.3

Acquisitions

The acquisition of any interest or right to acquire any interest in mineral claims, permits, concessions, leases, licences, patents or other forms of mineral tenure or water or other property rights within or partially within the Area of Interest may only be undertaken by the Company and/or OpCo and only pursuant to an Adopted Program and Budget and any such rights or interests shall, except as otherwise provided, be added to and included in the Properties for all purposes of this Agreement. Any rights or interests which AEM or GGR or their respective Affiliates acquire in breach of this Section 19.3 shall be held in trust for the Company. GGR will approach the owner of the Penõles Claim, which the Parties acknowledge is within the Area of Interest, to determine whether it may be available for purchase by OpCo.

19.4

Surrender or Abandonment of Properties

The General Manager may authorize the surrender or abandonment of part or all of the Properties.  If the General Manager authorizes any such surrender or abandonment it shall, on and subject to the terms herein provided, offer to assign such property to the Shareholder with the minority Ownership Interest.  A Party which receives an offer of assignment of property pursuant to this Section 19.4 may accept such offer only by notifying the General Manager of its acceptance within 30 days after receipt of the offer of assignment.  Failure to notify the General Manager of acceptance of the offer of assignment within such ten day period shall conclusively be deemed to be an irrevocable rejection of such offer and a waiver of any rights pursuant to this Section 19.4 with respect to the property subject to the offer.  If a Party (an “Accepting Assignee”) timely accepts an offer of assignment made pursuant to this Section 19.4: (i) the Company shall cause OpCo to assign to the Accepting Assignee, by quitclaim deed or its equivalent, all of OpCo’s interest in the property to be abandoned or surrendered, (ii) the abandoned or surrendered property shall cease to be part of the Properties, and (iii) none of OpCo, the Company nor the other Shareholder shall have any Liabilities or responsibility thereafter relating to such abandoned or surrendered property and the Accepting Assignee shall indemnify OpCo, the Company and the General Manager from and against any Liabilities arising after the date of Transfer to the Accepting Assignee from or in connection with the abandoned or surrendered property (including any such matter based on a condition of the property at the time of Transfer).

20.

MISCELLANEOUS

20.1

Applicable Law

The terms and provisions of this Agreement shall be interpreted in accordance with the Laws of British Columbia excluding any conflict of Laws provisions that would require the application of the Law of another jurisdiction.

20.2

Dispute Resolution

Upon Notice by a Party to another, all disputes, claims, questions or disagreements arising out or relating to this Agreement or breach, termination, enforcement, interpretation or validity thereof, including the determination of the scope or applicability of this agreement to arbitrate, shall be determined by arbitration in Vancouver, British Columbia by a single arbitrator acting under the Commercial Arbitration Act (British Columbia), whose decision shall be final and binding.

20.3

Time of the Essence

Time is of the essence of this Agreement.

20.4

Entire Agreement

This Agreement terminates and replaces all prior agreements, either written, oral or implied, between AEM and GGR with respect to the Properties and constitutes the entire agreement between the parties with respect to the Properties.

20.5

Void or Invalid Provision

If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future Laws, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision formed no part of this Agreement; and the remainder of this Agreement shall remain in full force and effect and shall not be affected by such provision or by its severance from this Agreement.  In lieu of such illegal, invalid or unenforceable provision there shall be added automatically as a part of this Agreement from which such provision was severed a provision as similar in terms and economic effect to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

20.6

Further Assurances

The Parties shall do and perform all such acts and things, and execute all such deeds, documents and writings, and give all such assurances, as may be necessary to give effect to this Agreement, including causing the Company and OpCo to take, from time to time, such actions and execute such additional instruments as may be reasonably necessary or convenient to implement and carry out the intent and purpose of this Agreement.

20.7

No Waiver

The failure of a Party to insist on the strict performance of any provision of this Agreement or to exercise any right, power, or remedy upon a breach hereof shall not constitute a waiver of any provision of this Agreement or limit the Party’s right thereafter to enforce any provision or exercise any right.

20.8

Modification

No modification of this Agreement shall be valid unless made in writing and duly executed by the Party against which the modification is asserted.

20.9

Perpetuities

If any provision of this Agreement should violate any rule against perpetuities or any related rule against interests that last too long or are not alienable, then any such provision shall terminate 20 years after the death of the last survivor of all the lineal descendants of His late Majesty King George V of England, living on the date of execution of this Agreement.

20.10

Binding Effect

This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and permitted assigns.

20.11

Counterparts

This Agreement may be executed in counterparts and by electronic or facsimile transmission, each of which shall be deemed to be an original and all of which shall constitute one and the same document.

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first above written.

AGNICO-EAGLE MINES LIMITED

By:

_____________________________
Its:

GOLDEN GOLIATH RESOURCES LTD.

By:

_____________________________
Its:

SCHEDULE A

CONCESSIONS

The following mining concessions located at the Municipality of Uruachi, Chihuahua and registered in favor of Minera Delta at the Public Registry of Mines:

a) Ampliación La Verde lot, title 219790, with an area of 54.3467 hectares.

b) Don Lázaro lot, title 211783, with an area of 121.9446 hectares.

c) El Manto lot, title 223309, with an area of 99.9689 hectares.

d) Los Hilos lot, title 216702, with an area of 40.0000 hectares.

e) Los Hilos II lot, title 222917, with an area of 213.0202 hectares.

f) Los Hilos II Fracc. I, title 222918, with an area of 5.5615 hectares.

g) Mina de las Bolas lot, title 185135, with an area of 24.0000 hectares.

h) Todos Santos lot, title 195208, with an area of 50.0000 hectares.

SCHEDULE B

ACCOUNTING PROCEDURE

1.

GENERAL PROVISIONS

1.1

General Accounting Records

The General Manager shall maintain accounting records, prepared in accordance with this Accounting Procedure and Applicable Accounting Standards, sufficient to provide a record of revenues and expenditures and periodic statements of financial position and the results of operations for managerial, tax, regulatory or other financial reporting purposes.  Such records shall be retained for the duration of the period allowed for the Shareholders to audit or the period necessary to comply with tax or other regulatory requirements.  The records shall reflect all obligations, advances and credits of the Shareholders.

1.2

Bank Accounts

The General Manager shall maintain one or more separate bank accounts for the payment of all expenses and the deposit of all cash receipts.

1.3

Statements and Billings

The General Manager shall prepare statements and bill the Company as provided in Article 12 of the Agreement.  Payment of any such billings by the Company shall not prejudice its right to protest or question the correctness thereof for a period not to exceed 24 months following the calendar year during which such billings were received by the Company.  All written exceptions to and claims upon the General Manager for incorrect charges, billings or statements shall be made upon the General Manager within such 24 month period.  The time period permitted for adjustments hereunder shall not apply to adjustments resulting from periodic inventories as provided in Article 5.

2.

CHARGES TO THE COMPANY

The General Manager shall charge the Company and the Company will pay all costs and expenses incurred or paid by the General Manager or its Affiliates or OpCo pursuant to the Agreement or to carry out adopted Programs or otherwise, including without limitation:

2.1

Rentals, Royalties and Other Payments

All property acquisition and holding costs, including leases payments, option payments, filing fees, license fees, costs of permits and assessment work, production royalties, including any required advances and all other payments made by the General Manager which are necessary to acquire or maintain title to the Assets.

2.2

Labour and Employee Benefits

(a)

Salaries and wages of the General Manager’s or the General Manager’s Affiliates’ employees directly engaged in Operations, including salaries or wages of employees who are temporarily assigned to the General Manager.

(b)

The General Manager’s costs of holiday, vacation, sickness and disability benefits, and other customary allowances applicable to the salaries and wages chargeable under Sections 2.2(a) and 2.12.  Such costs may be charged on a “when and as paid basis” or by “percentage assessment” on the amount of salaries and wages.

(c)

The General Manager’s actual cost of established, establishing or participating in plans for employees’ group life insurance, hospitalization, pension, retirement, stock purchase, thrift, bonus and other benefit plans of a like nature applicable to salaries and wages chargeable under Sections 2.2(a) and 2.12.

(d)

Cost of assessments imposed by governmental authority which are applicable to salaries and wages chargeable under Sections 2.2(a) and 2.12, including all penalties.

2.3

Fixed Assets, Materials, Equipment and Supplies

(a)

All capital costs of developing and operating the Properties as a mine including all costs of land, construction, equipment and mine development including maintenance, repairs and replacements, and any capital expenditures relating to an improvement, expansion, modernization or replacement of the facilities.

(b)

The cost of materials, equipment and supplies (herein called “Material”) purchased from unaffiliated third parties or furnished by the General Manager.

2.4

Equipment and Facilities Furnished by General Manager

The cost of machinery, equipment and facilities owned by the General Manager and used in Operations or used to provide support or utility services to Operations charged at rates no less favourable than those reasonably available from arm’s length third parties.

2.5

Transportation

Reasonable transportation costs incurred in connection with the transportation of employees and material necessary for the Operations, including from Canada to the location of the Properties.

2.6

Contract Services and Utilities

The cost of contract services and utilities procured from outside sources.  If contract services are performed by the General Manager or an Affiliate thereof, the cost charged to the Company shall not be greater than that for which comparable services and utilities are available in the open market within the vicinity of the Operations.

2.7

Insurance Premiums

Net premiums paid for insurance required to be carried for Operations for the protection of the General Manager and the Company.  Where the General Manager may self-insure pursuant to the provisions of the Shareholders’ Agreement for property, liability, Workmen’s Compensation and/or Employer’s Liability or other risk under the Shareholders’ Agreement, the General Manager may elect to include such risks in its self-insurance program and shall charge to Company as its costs of self-insuring such risks an amount equal to the premium it would have paid had it secured and maintained a substantially similar policy or policies of insurance on a competitive bid basis in the amount of such coverage.  If self-insurance is selected, the General Manager shall provide to the Company statements as to the extent and limits of such self-insurance and the basis for the charges to the Company.

2.8

Damages and Losses

All costs in excess of insurance proceeds necessary to repair or replace damage or losses to any Assets resulting from any cause.

2.9

Legal and Regulatory Expense

All legal and regulatory costs and expenses incurred in or resulting from the Operations or necessary to protect or recover the Assets, however, that, unless otherwise approved in advance by the Shareholders, no charge shall be made for the salary and benefits of General Manager’s legal staff.

2.10

Audit

Cost of annual audits.

2.11

Taxes

All taxes (except income taxes) of every kind and nature assessed or levied upon or in connection with the Assets, the production of Products or Operations, which have been paid by the General Manager for the benefit of the Company.  

2.12

District and Camp Expense (Field Supervision and Camp Expenses)

A pro rata portion of (i) the office and administrative expenses of the General Manager’s regional office in Mexico, (ii) the salaries and expenses of the General Manager’s superintendent and other employees serving Operations whose time is not allocated directly to such Operations, (iii) the costs of maintaining and operating an office (herein called “the General Manager’s Project Office”) and any necessary suboffice for Operations and (iv) all camps including housing facilities for employees used for Operations.  The expense of those facilities less any revenue therefrom, shall include depreciation or a fair monthly rental in lieu of depreciation of the investment.  The total of such charges for all properties served by the General Manager’s employees and facilities shall be apportioned to the Company on the basis of the General Manager’s best estimate of the proportionate amount of such expenses incurred for the benefit of the Company.

2.13

Administrative Charge

(a)

Each month, the General Manager shall charge the Company a sum for each phase of Operations as provided below, which shall be a liquidated amount to reimburse the General Manager and its Affiliates for its office overhead, and general and administrative expenses, and which shall be in lieu of any other management fee:

(i)

Exploration Phase - 5% of Allowable Costs;

(ii)

Development Phase - 3% of Allowable Costs; and

(iii)

Mining Phase – 3% of Allowable Costs.

(b)

The term “Allowable Costs” as used in this Section 2.13 for a particular phase of Operations shall mean all charges to the Company excluding (i) the administrative charge referred to herein; and (ii) amounts charged in accordance with Sections 2.1 and 2.9.  The General Manager shall attribute such Allowable Costs to a particular phase of Operations by applying the following guidelines:

(i)

The “Exploration Phase” shall cover those activities directed toward ascertaining the existence, location, quality or commercial value of deposits of Products.  Such phase shall include all activities undertaken through the completion of the Feasibility Study, but shall not include construction of milling or processing facilities or commencement by commercial mining operations on the Properties.

(ii)

The “Development Phase” shall cover those activities conducted to prepare for removal and recovery of Products (including from an existing ore body), and to construct or install a mill or any other improvements to be used for the mining, extracting, producing, handling, milling, processing or other beneficiation of Products.

(iii)

The “Mining Phase” shall include mining, extracting, producing, handling, milling or other processing of Products and all other activities not otherwise covered above, including activities conducted after mining operations have ceased.

2.14

Other Expenditures

Any reasonable direct expenditure, other than expenditures which are covered by the foregoing provisions, incurred by the General Manager for the necessary and proper conduct of Operations.  Notwithstanding this Article 2, any costs associated with Sections 1.6, 1.7 and 3.15 shall not be charged to the Company and shall be the sole responsibility of the applicable Shareholder.

3.

BASIS OF CHARGES

3.1

Purchases

Material purchased and services procured from third parties shall be charged to the Company by the General Manager at invoiced cost, including applicable transfer taxes, less all discounts taken.  In the case of material purchased or services acquired from a Shareholder or an Affiliate of the General Manager, the same shall be transferred or acquired on a fair market value basis as reasonably determined by the General Manager, including any premiums for short supply or remote location or other special factors.  The General Manager shall forthwith give Notice to the other Shareholder of any material purchased or services acquired from a Shareholder or an Affiliate of the General Manager.  The Notice shall include copies of any written agreements, the total cost of the materials or service, as the case may be, and all other applicable details with respect to the transaction ensuring full disclosure of the nature of the transaction to the other Shareholder.

3.2

Warranty of Material Furnished by the General Manager

The General Manager does not warrant the material furnished beyond any dealer’s or manufacturer’s warranty and no credits shall be made to the Company for defective material until adjustments are received by the General Manager from the dealer, manufacturer or their respective agents.

3.3

DISPOSAL OF MATERIAL

3.4

Distribution to Shareholders

Any material to be distributed to the Shareholders shall be made in proportion to their respective Ownership Interests, and corresponding credits shall be made to the Company as determined by the General Manager.

3.5

Sales

Sales of material to third parties shall be credited to the Company at the net amount received.  Any damages or claims by the purchaser shall be charged back to the Company if and when paid.

4.

INVENTORIES

4.1

Periodic Inventories, Notice and Representations

At reasonable intervals, inventories shall be taken by the General Manager, which shall include all such Material as is ordinarily considered controllable by operators of mining properties and the expense of conducting such periodic inventories shall be charged to the Company.  In connection with any inventory taken, the General Manager shall give Notice of its intention to perform an inventory count to each Shareholder at least 30 days in advance of the date set for performing of the inventory count.  Each Shareholder shall be entitled to be represented at the performing of an inventory count upon giving notice thereof to the General Manager within 20 days of the General Manager’s notice.  A Shareholder who is not represented at the performing of the inventory count shall be deemed to have approved the inventory count as taken.

4.2

Reconciliation and Adjustment of Inventories

Forthwith after taking an inventory count, inventory adjustments shall be made by the General Manager for averages and shortages and each Shareholder shall be provided a statement listing the overages and shortages.  The General Manager shall be held accountable to the Company only for shortages due to lack of diligence.

5.

CREDITS

5.1

Credits for Revenues

The General Manager will credit the Company with revenues received by the General Manager as such including, for example:

(a)

collection of insurance proceeds related to the Operations when the insurance premiums have been charged to the Company;

(b)

sales of property, plant, equipment and materials of the Operations in the normal course of the day-to-day business;

(c)

rentals received, refunds of custom duties or transportation claims, rebates, and other credits pertaining to Operations;

(d)

credits received from third parties for the use of facilities or services of the Operations;

(e)

refunds for defective equipment when the General Manager receives the corresponding payments from the manufacturers or agents; and

(f)

any other credits for materials recovery or from other sources which correspond to the Company.

SCHEDULE C

NET SMELTER RETURNS ROYALTY

Pursuant to the Agreement to which this Schedule C is attached either (i) AEM and its Affiliates or (ii) GGR (the “Royalty Holder”) may be entitled to a royalty equal to 2% of net smelter returns from the Properties payable by the other of them (the “Operator”).

1.

Royalty

The Operator shall pay to the Royalty Holder a royalty (the “Net Smelter Returns Royalty”) equal to 2% of Net Smelter Returns, subject to reduction to 1% of Net Smelter Returns as provided in Section 10.10(a) of the Agreement.

2.

Calculation

“Net Smelter Returns” means the actual proceeds received by the Operator from any mint and/or smelter and/or refinery and/or reduction works and/or other purchaser in respect of the sale of ores, metals, concentrates or other minerals from the Properties, after deducting therefrom to the extent they were actually incurred and/or were not deducted by such mint and/or smelter and/or refinery and/or reduction works and/or other purchaser in computing payment, the following:

(a)

any treatment and/or smelting and/or refining charges and/or tolling, including any such costs from a custom smelter, any penalties or other charges for impurities, including metal losses or deductions in respect of metals not paid for;

(b)

all actual transportation costs for ores, metals, concentrates or other minerals from the Properties to any such mint and/or smelter and/or refinery and/or reduction works and/or other purchaser including any such costs to any ultimate buyer of metals and including storage and handling costs, purchaser's charges for preparation, treatment, refining, assaying, weighing, and sampling, marketing fees or costs, brokerage fees or costs, and all other costs incurred by the Operator after the ores, metals, concentrates or other minerals leave the Properties;

(c)

any insurance charges on all such ores, metals, concentrates or other minerals including marine insurance and chatterer’s liability insurance;

(d)

all appropriate charges of such mint, smelter, refinery, reduction works or other purchaser and any sales, excise, production, import, export and other Taxes and levies, including mining taxes on such ores, metals, concentrates or other minerals (but excluding income taxes).

Notwithstanding the foregoing, in the event that ores or minerals are processed at a milling facility owned or controlled or sub-contracted by the Operator, then any transportation or handling or related costs from the Properties to such milling facility shall not be deductible in calculating the Net Smelter Returns.  However, any such costs incurred on concentrates or metals produced from such ores or minerals at such facility and delivered to any mint and/or smelter and/or refinery and/or reduction works and/or other purchaser shall be deductible as herein provided.

3.

Further Refinement, Stockpiling and Commingling

The Operator may, but is not obligated to, beneficiate, mill, sort, concentrate, refine, smelt, or otherwise process and upgrade the ores, concentrates, and other mineral products produced from ores mined from the Properties prior to sale, transfer, or conveyance to a purchaser, user or consumer other than the Operator.  The Operator shall not be liable for mineral values lost in such processing under sound practices. The Operator shall have the right to stockpile and commingle ore, concentrates, minerals and other material mined and removed from the Properties with ore, concentrates, minerals and other material mined and removed from other lands and properties; provided, however, that the Operator shall calculate from representative samples the average grade thereof and other measures as are appropriate, and shall weigh (or calculate by volume) the material before commingling.  In obtaining representative samples, calculating the average grade of the ore and average recovery percentages, the Operator may use any procedures accepted in the mining and metallurgical industry which it believes suitable for the type of mining and processing activity being conducted and, in the absence of fraud, its choice of such procedures shall be final and binding on the Operator.

4.

Payments and Statements

The Net Smelter Returns Royalty shall become due and payable quarterly on the last day of the month following the last day of the calendar quarter in which the same accrued.  Net Smelter Returns Royalty payments shall be accompanied by a statement showing in reasonable detail the quantities and grades of the refined metals, dore, concentrates, or other mineral products produced and sold by the Operator in the preceding calendar quarter; the proceeds of sale on which the royalty is due; costs, and other deductions; and other pertinent information in sufficient detail to explain the calculation of the Royalty payment.   An annual report shall be prepared with estimates of anticipated production from and estimated remaining reserves on the Properties for the succeeding calendar year.  If requested in writing, the Operator shall provide the Royalty Holder, at Royalty Holder’s expense, with such data or reports regarding mineral resources that are subject to the Net Smelter Returns Royalty as may be reasonably required by the Royalty Holder to comply with the requirements of National Instrument 43-101 of the Canadian Securities Administrators (“NI 43-101”), but no officer or employee of the Operator or any of its Affiliates shall be required to act as a “qualified person” (as that term is defined in NI 43-101) of Royalty Holder in respect of any publicly disclosed information.  No representation or warranty is made by the Operator with respect to the accuracy of the conclusions drawn by the Royalty Holder with respect to such reports.  For the purposes of this section, the Royalty Holder shall be required to take advantage of any exemptions from the filing requirements of NI 43-101.

5.

Audits

All Net Smelter Returns Royalty payments shall be considered final and in full satisfaction of all obligations of the Operator with respect thereto, unless the Royalty Holder gives the Operator Notice describing and setting forth a specific objection to the calculation thereof within twelve (12) months after receipt by the Royalty Holder of the quarterly statement herein provided for.  If the Royalty Holder objects to a particular quarterly statement as herein provided, the Royalty Holder shall, for a period of thirty (30) days after the Operator’s receipt of Notice of such objection, have the right, upon reasonable notice and at a reasonable time, to have the Operator’s accounts and records relating to the calculation of the Royalty in question audited by a chartered accountant acceptable to the Royalty Holder and to the Operator.  If such audit determines that there has been a deficiency or an excess in the payment made to the Royalty Holder such deficiency or excess shall be resolved by adjusting the next quarterly Net Smelter Returns Royalty payment due hereunder.  The Royalty Holder shall pay all costs of such audit unless a deficiency of more than 10% of the amount due is determined to exist.  The Operator shall pay the costs of such audit if a deficiency of more than 10% of the amount due is determined to exist.  All books and records used by the Operator to calculate royalties due hereunder shall be kept in accordance with generally accepted accounting principles.  Failure on the part of the Royalty Holder to make claim on the Operator for adjustment in such 12-month period shall establish the correctness and preclude the filing of exceptions thereto or making of claims for adjustment thereon.

EX-12.1

Exhibit 12.1

I, J. Paul Sorbara, President, certify that:

1.

I have reviewed this Second Amendment to the Annual Report on Form 20-F of Golden Goliath Resources Ltd.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: August 10, 2012

/s/ J. Paul Sorbara

J. Paul Sorbara, President/Director

EX-12.2

Exhibit 12.2

I, Stephen Pearce, Chief Financial Officer, certify that:

1.

I have reviewed this Second Amendment to Annual Report on Form 20-F of Golden Goliath Resources Ltd.;

2.

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;

4.

The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

(a)

Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)

Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)

Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and

5.

The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s board of directors (or persons performing the equivalent functions):

(a)

All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.

Date: August 10, 2012

/s/ Stephen Pearce

Stephen Pearce, Chief Financial Officer

EX-13.1

EXHIBIT 13.1

Certification of Chief Executive Officer

Pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to Section 906

of the Sarbanes-Oxley Act of 2002

In connection with this Second Amendment to Annual Report for Fiscal 2011 Ended August 31, 2011 of Golden Goliath Resources Ltd., a company organized under the British Columbia Corporations Act (the “Company”) on Form 20-F as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, J. Paul Sorbara, President and Director of the Company, certifies, pursuant to 18 U.S.C. (S) 1350, as adopted pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ J. Paul Sorbara

J. Paul Sorbara, President/Director

Date: August 10, 2012

EX-13.2

EXHIBIT 13.2

Certification of Chief Financial Officer

Pursuant to 18 U.S.C. Section 1350,

as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with this Second Amendment to Annual Report for Fiscal 2011 Ended August 31, 2011 of Golden Goliath Resources Ltd., company organized under the British Columbia Corporations Act (the “Company”) on Form 20-F as filed with the Securities and Exchange Commission on the date hereof (the “Report”), the undersigned, Stephen Pearce, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. (S) 1350, as adopted pursuant to (S) 906 of the Sarbanes-Oxley Act of 2002, that:

(1)

The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.

/s/ Stephen Pearce

Stephen Pearce, Chief Financial Officer

Date: August 10, 2012

CORRESP

Response Letter