UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 20-F

o		REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2007

o		TRANSITIONAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

o		SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

(Exact name of registrant as specified in its charter)

Canada
(Jurisdiction of incorporation or organisation)

1155 rue University, Suite 1405
Montréal, Québec, CANADA H3B 3A7
(Address of principal executive offices)

     Securities registered or to be registered pursuant to Section 12(b) of the Act

Title of each class		Name of each exchange on which registered
common shares		TSX and OTC-BB

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

     Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act.

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.

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

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. o Yes þ No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 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 90 days. þ Yes o No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer þ		Smaller reporting company o
				(Do not check if a smaller reporting company)

Indicate by check mark which financial statement item the registrant has elected to follow. Item 17 þ Item 18 o

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).
o Yes þ No

 

 

Item 1. Identity of Directors, Senior Management and Advisors			4
Item 2. Offer Statistics and Expected Timetable			4
Item 3. Key Information			4
A. Selected Financial Data			4
Summary of Differences Between US and Canadian GAAP			6
B. Capitalization and indebtedness			6
C. Reasons for the offer and use of proceeds			6
D. Risk factors			6
Mining Risks			6
Environmental Matters			11
Item 4. Information on the Company			12
A. History and Development of the Company			12
General Background			12
Significant Subsidiaries			12
MSV Resources Inc. and GéoNova Explorations Inc.			12
Meston Resources Inc.			12
Corporation Copper Rand Inc.			12
1329498 Alberta Ltd. and MSV Resources 2007 Inc.			13
Acquisition or Disposition of Material Assets			14
Mexican Assets			14
Discovery Project			14
Bachelor Lake Property			14
The Eastmain Mine			15
Joe Mann Mine			15
The Chevrier Project			15
Bankruptcy, Receivership or Similar Proceedings			15
Capital Expenditures and Divestitures for the Last Three Financial Years			16
AlbertaCo			16
Joe Mann Mine			16
Copper Rand Mine and Corner Bay Project			17
Methods of Financing			18
B. Business Overview			20
Nature of the Company’s Operations and Activities			20
Joe Mann Mine			21
Copper Rand Mine			21
Corner Bay Property			22
Seasonality			22
Material Effects of Government Regulations			22
C. Organizational Structure			23
D. Property, Plants and Equipment			23
Campbell Material Tangible Fixed Assets			23
Location of the mines and principal exploration properties of Campbell Ressources inc.			24
Properties of Meston			24
History			24
Location, Access and Ownership			26
Geology			26
Mineral Reserves and Resources			26
Mineral Resources (Measured and Indicated Resources)			28
Mineral resources (inferred resources)			28
Mining			29
Milling			30
Employees			30
Royalties			31
Environmental Matters			32
Mineral Exploration Properties			32
Chibougamau Exploration Properties			32

Properties of MSV			33
The Copper Rand Mine			33
Location and Title			33
History			34
Copper Rand 5000 Project Background			34
Financing of The Copper Rand Project and Details of The Management of The Copper Rand Project		34
Other Aspects of The Copper Rand Project			36
Geology			36
Mineral Reserves			36
Mineral Resources			37
Inferred Resources			37
Mining			38
The Copper Rand Mill			38
Milling			39
Environmental Fund			39
Tailings and Waste Disposal			39
Employees			39
Royalties			39
The Corner Bay Property			40
Location and Title			40
History			40
Geology			41
Mineral Resources			42
Inferred Resources			43
Royalties			43
The Cedar Bay Property			43
The Merrill Pit			44
Location and Title			44
History			44
Properties of GéoNova			44
Berthiaume Syndicate			45
Property, Location and Access			45
Geology			45
The Pitt Gold Property			47
Location, Access and Ownership			47
Geology			47
Item 5. Operating and Financial Review and Prospects			47
Management’s Discussion and Analysis			47
Item 6. Directors, Senior Management and Employees			70
A. Directors and Senior Management			70
Directors			70
Senior Management			72
B. Compensation			72
Executive Compensation			72
Bonus or Profit-Sharing Plans and Stock Options			74
Options / Stock Appreciation Rights (“SAR”) Granted during the Most Recent Financial Year			74
Aggregate Options Exercised During the Most Recent Financial Year and Year End Option Value			74
Securities Authorized for Issuance Under Equity Compensation Plans			75
C. Board Practices			75
Date of expiration of current term of office			75
Directors’ Service Contracts			75
Audit Committee			76
Audit Committee Charter			76
Composition of Audit Committee			76
Audit Committee Oversight			77
Pre-Approval Policies and Procedures			77
Compensation Committee			77
Composition of the Compensation Committee			77
Executive Compensation Philosophy and Policy			77
Report on Executive Compensation			78

Statement of Corporate Governance Practices			78
D. Employees			83
E. Share Ownership			84
Arrangements Involving the Employees in the Capital of the Company			85
Employee Incentive Plan			85
Share Option Plan			86
Share Purchase Plan			87
Share Bonus Plan			88
Share Loan Plan			88
Directors’ Stock Option Plan			89
Item 7. Major Shareholders and Related Party Transactions			90
A. Major Shareholders			91
B. Related Party Transactions			91
Item 8. Financial Information			92
A. Consolidated Statements and Other Financial Information			92
Legal Proceedings			92
Dividend Record and Policy			94
B. Significant Changes			94
Item 9. The Offer and Listing			94
A. Offer and listing details			94
Toronto Stock Exchange			94
OTC-BB			95
B. Plan of distribution			96
Not applicable			96
C. Markets			96
D. Selling Shareholders			96
E. Dilution			96
F. Expenses of the issue			96
Item 10. Additional Information			96
A. Share Capital			96
B. Memorandum and Articles of Incorporation			96
Election and Qualifications of Directors			97
Meetings			98
Limitations on Ownership of Securities			98
Change in Control of Company			98
C. Material Contracts			98
D. Exchange Controls			99
E. Taxation			100
Certain Canadian Federal Income Tax Consequences			100
Dividends on Common Shares			100
Disposition of Common Shares			101
Flow-Through Shares			102
Certain United States Federal Income Tax Considerations			102
U.S. Holders			102
Distributions of Common Shares			103
Foreign Tax Credit			103
Disposition of Common Shares			103
Other Considerations			104
Passive Foreign Investment Corporation			104
Backup Withholding			104
F. Dividends and paying agents			105
G. Statements by experts			105
H. Documents on Display			105
I. Subsidiary Information			105
Item 11. Quantitative and Qualitative Disclosures about Market Risk			105
Copper and Gold Risk Disclosures			105
Foreign Currency Risk Disclosures			105
Competition			106

Item 12. Description of Securities other than Equity Securities			106
PART II			106
Item 13. Defaults, Dividend Arrearages and Delinquencies			106
Credit facility with Investissement Québec			106
Convertible debentures			106
CCAA Procedures			106
Item 14. Material Modifications to the Right of Security Holders and Use of Proceeds			107
Item 15. Controls and Procedures			107
Item 16A. Audit Committee Financial Expert			108
Item 16B. Code Of Ethics			108
Item 16C. Principal Accountant Fees And Services			108
(a) Audit Fees			108
(b) Audit-Related Fees			109
(c) Tax Fees			109
(d) All Other Fees			109
(e) Audit Committee’s Pre-Approval Policies			109
(f) Auditors Use of Non-Permanent Employees			109
Interest of Auditors			109
Item 16D. Exemptions From The Listing Standards For Audit Committees			109
Item 16E. Purchases Of Equity Securities By The Issuer And Affiliated Purchasers			109
PART III			110
Item 17. Financial Statements			110
Item 19. Exhibits			61

FORWARD-LOOKING STATEMENTS

     We make statements in this Annual Report on Form 20-F for the fiscal year ended December 31, 2007 (the “Report”) and the documents we incorporate by reference that are considered forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Sometimes these statements will contain words such as “believes”, “expects”, “intends”, “plans” and other similar words. Our intention is that the forward-looking statements be covered by the safe harbour provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and we are including these statements for the purpose of complying with the safe harbour provisions. These forward-looking statements reflect our current views which are based on the information currently available to us and on assumptions we have made. Although we believe that our plans, intentions and expectations as reflected in or suggested by those forward-looking statements are reasonable we can give no assurance that the plans, intentions or expectations will be achieved. Such forward-looking statements concern the Campbell Resources Inc.’s operations, economic performance and financial condition. Such statements involve known and unknown risks, uncertainties and other factors, including those identified under the “Risk Factors” section in Item 3 and elsewhere in this Report, that may cause the actual results, performance or achievements of Campbell Resources Inc., or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Such factors include, but are not limited to: differences between estimated and actual mineral resources and reserves and recovery rates; failure of plant, equipment or processes to operate in accordance with expectations and specifications; changes to exploration, development and mining plans due to prudent reaction of management to ongoing exploration results, engineering and financial concerns; environmental costs; and fluctuations in gold price which affect the profitability and ore reserves of the Campbell Resources Inc. These risks and uncertainties are the normal risks involved in mining. Readers are cautioned not to put undue reliance on forward-looking statements. See “Risk Factors” in Item 3, “Management’s Discussion and Analysis” in Item 5, and elsewhere in Item 11. The forward-looking statements are made as of the date of this Report, and Campbell Resources Inc. assumes no obligation to update the forward-looking statements or to update the reasons why actual results could differ from those projected in the forward-looking statements except in accordance with applicable laws.

CURRENCY AND METRIC EQUIVALENTS

     Unless otherwise indicated, all dollar amounts herein are expressed in Canadian dollars. Amounts expressed in United States dollars are preceded by the symbol “US$”. The following table sets forth, for each of the years indicated, certain information concerning the exchange rate for translating United States dollars into Canadian dollars based upon the noon buying rate in the City of New York for cable transfers in Canadian dollars and certified for customs purposes by the Federal Reserve Bank of New York.

		Rate at				Average
		December 31				Rate(1)				High				Low
2002			1.5800				1.5702				1.6049				1.5190
2003			1.2923				1.3916				1.5286				1.2923
2004			1.2034				1.3016				1.3970				1.1775
2005			1.1656	(2)			1.2083				1.2703				1.1507
2006			1.1654	(3)			1.1304				1.1722				1.0983
2007			0.9881				1.0666				1.1852				0.9168

     The high and low exchange rates based on the noon buying in the City of New York for each month during the previous six (6) months are as follows:

		High				Low
March 2008			1.0275				0.9841
February 2008			1.0188				0.9717
January 2008			1.0294				0.9905
December 2007			1.0216				0.9784
November 2007			1.0007				0.9168
October 2007			1.0002				0.9496
September 2007			1.0546				0.9959

     On March 31, 2008, the noon buying rate for US$1.00 was CAN$ 1.0275.

     Tonnages referred to in this Report are to either short tons equal to 2,000 pounds, referred to herein as “tons”, or to metric tons, equal to 2,204.6 pounds and referred to herein as “tonnes” or “metric tons”. A reference herein to ounces means a troy ounce that is equal to 31.103 grams. To convert grams per tonne to ounces per ton, multiply grams per tonne by 0.029. Distances are referred to either as miles, equal to 1.6093 kilometres; feet, equal to 0.305 metres; kilometres, equal to 0.621 miles; or metres, equal to 3.28 feet. Acreage is referred to as acres, which represents 0.4046 hectares; hectares, equal to 2.471 acres; or square miles equal to 640 acres or 258.99 hectares. For more information, refer to the following table:

Conversion Table

Imperial System				Metric System
1 foot (ft)		=		0.3048 metre (m)
1 yard (yd)		=		0.9144 metre (m)
1 mile (mi)		=		1.6093 kilometre (km)
1 square mile (mi2)		=		2.5900 square kilometres (km2)
1 acre (ac)		=		0.4047 hectare (ha)
1 troy ounce (oz)		=		31.1035 grams (g)
1 short ton		=		0.9072 tonne (t)
1oz/ short ton		=		28.2 g/t

RESERVE AND RESOURCE ESTIMATES

     The reserve and resource estimates, set forth in this document, have been prepared in accordance with applicable Canadian requirements. Mineral reserves and resources disclosed in this Report except the updated mineral reserves and resources at the Joe Mann Mine, the Copper Rand Mine and the Corner Bay Property on December 31, 2007 were previously disclosed in the technical reports prepared by Systèmes Géostat International Inc. entitled (i) Audit of the Mineral Resources and Mineral Reserves of the Joe Mann Mine dated July 21, 2006, (ii) Audit of the Mineral Resources and Mineral Reserves of the Copper Rand Mine dated September 7, 2006 and (iii) Corner Bay deposit, Audit of Mineral Resources, dated July 12, 2006, such technical reports may be found on the System for Electronic Document Analysis and Retrieval (SEDAR) (available at http://www.sedar.com) or at the offices of Campbell Resources Inc. during the normal business hours. Such estimates may not qualify as a commercially mineable ore body under standards promulgated by the United States Securities and Exchange Commission (the “SEC”) and will not qualify as mineable reserves unless the economic viability of the project is established and documented in a final feasibility study. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

GLOSSARY OF SIGNIFICANT TERMS

In this Report, unless the context suggests another meaning, the following terms and expressions shall have the meanings set forth below:

“Proven mineral reserve” is the economically mineable part of a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting that economic extraction is justified.

“Probable mineral reserve” is the economically mineable part of an indicated, and in some circumstances, a measured mineral resource demonstrated by at least a preliminary feasibility study. This study must include adequate information on mining, processing, metallurgical, economic, and other relevant factors that demonstrate, at the time of reporting that economic extraction can be justified.

“Measured mineral resource” is that part of a mineral resource for which quantity, grade or quality, densities, shape and physical characteristics, are so well established that they can be estimated with confidence sufficient to allow the appropriate application of technical and economic parameters, to support production planning and evaluation of economical viability of the deposit. The estimate is based on detailed and reliable exploration sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits working and drill holes that are spaced closely enough for geological and grade continuity.

“Indicated mineral resource” is that part of mineral resource for which quantity, grade or quality, densities, shape and physical characteristics, can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.

“Inferred mineral resource” is that part of mineral resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified,

geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, working and drill holes.

“Mineral resource” is a concentration or occurrence of natural, solid, inorganic or fossilized organic material in or on the Earth’s crust in such form and quantity and of such grade or quality that it has reasonable prospects for economic extraction. The location, quantity, grade, geological characteristics and continuity of mineral resource are known, estimated or interpreted from specific geological evidence and knowledge.

“Qualified person” conforms to the definition under National Instrument 43-101 - Standards of Disclosure for Mineral Projects (“National Instrument 43-101”) and is an engineer or a geoscientist with at least five (5) years of experience relevant to a particular project. National Instrument 43-101 was developed by the Canadian Securities Administrators, an umbrella group of Canada’s provincial and territorial securities regulators.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISORS

Not applicable.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. Selected Financial Data

     The following table sets forth selected consolidated financial information with respect to Campbell Resources Inc. (“Campbell” or the “Company”) for the five (5) years ended December 31, 2007 and is extracted in part from the consolidated financial statements included herein. The selected financial data set forth below is stated in thousands of Canadian dollars (except per share amounts).

     This selected financial data has been prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”) which differs in many respects from generally accepted accounting principles in the United States (“U.S. GAAP”). A discussion of differences between Canadian GAAP and U.S. GAAP is contained in Note 22 to the audited consolidated financial statements.

     The following table should be read in conjunction with Item 5 — “Operating and Financial Review and Prospects”, and the consolidated financial statements included in Item 17 .

FIVE YEAR COMPARATIVE SUMMARY OF SELECTED FINANCIAL DATA

(expressed in thousands of Canadian dollars unless otherwise indicated)
(In accordance with Canadian GAAP)⁽¹⁾

Years ended December 31		2007				2006				2005				2004				2003
Operating results
Net metal sales			23,043				10,919				18,274				20,461				20,812
Loss from operations			24,953				41,681				28,259				9,515				6,368

Years ended December 31		2007				2006				2005				2004				2003
Net loss			18,988				41,195				24,430				8,192				3,940
Cash flow (used for) provided by operations			(5,005	)			(5,779	)			(748	)			1,193				(4,380	)
Capital expenditures			(13,226	)			(4,674	)			(2,696	)			(28,053	)			(4,193	)
Financial position
Cash and short-term deposits			474				1,964				1,772				1,191				4,752
Total assets			65,350				115,142				134,643				177,756				159,773
Long-term debt (2)			21,025				65,357				67,782				66,502				60,079
Capital stock			96,639				85,572				69,958				69,610				55,429
Shareholders’ equity			6,131				12,006				30,503				54,585				45,803
Per share data (in dollars per share)
Loss from operation per share			0.06				0.28				0.26				0.10				0.12
Net loss per share			0.05				0.27				0.23				0.08				0.07

As of March 31, 2008, the Company had 432,604,881 common shares outstanding. Each common share entitles its holder to one vote.

Foreign exchange

rate Canadian to US

dollar:

2007

2006

2005

2004

2003

Year end/average

0.9881 /1.0666

1.1654 /1.1304

1.1656 /1.2083

1.2034 /1.3016

1.2923 /1.3916

High/low

1.1852 /0.9168

1.1722 /1.0983

1.2703 /1.1507

1.3970 /1.1775

1.5286 /1.2923

Month Ended		High				Low
March 31, 2008			1.0275				0.9841
February 29, 2008			1.0188				0.9717
January 31, 2008			1.0294				0.9905
December 31, 2007			1.0216				0.9784
November 30, 2007			1.0007				0.9168
October 31, 2007			1.0002				0.9496
September 28, 2007			1.0546				0.9959

Month		Monthly Average
March 2008			1.00294

Month		Monthly Average
February 2008			0.99855
January 2008			1.00995
December 2007			1.00207
November 2007			0.96613
October 2007			0.97513
September 2007			1.02520

On March 31, 2008, the noon buying rate for US$1.00 was CAN$ 1.0275.

SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

(expressed in thousands of Canadian dollars except per share amounts)

Year ended December 31, 2007		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
Metal sales			1,714				1,482				14,201				9,395
Loss from operations			(5,535	)			(5,037	)			(4,749	)			(9,632	)
Net earnings (loss)			(1,745	)			(4,341	)			(3,940	)			(8,962	)
Net earnings (loss) per share			(0.01	)			(0.01	)			(0.01	)			(0.02	)

Year ended December 31, 2006		1st Quarter				2nd Quarter				3rd Quarter				4th Quarter
Metal sales			2,644				3,840				2,267				3,174
Loss from operations			(2,501	)			(1,888	)			(4,262	)			(33,030	)
Net earnings (loss)			(2,298	)			(1,755	)			(4,902	)			(32,240	)
Net earnings (loss) per share			(0.02	)			(0.02	)			(0.04	)			(0.19	)

     Summary of Differences Between US and Canadian GAAP

     A reconciliation of the differences between generally accepted accounting principles in the United States and Canada is presented in Note 22 of the consolidated financial statements stated in Item 17.

B. Capitalization and indebtedness.

Not applicable.

C. Reasons for the offer and use of proceeds

Not applicable.

D. Risk factors

     Mining Risks

     The Company’s mineral exploration and mining operations involve significant risks, including the difficult nature of establishing the existence of economic mineralization, significant up-front capital

requirements, variability in deposits, and others that may restrict the Company’s ability to receive an adequate return on its capital in the future. The exploration and development of mineral deposits involves significant financial and other risks over an extended period of time, which even a combination of careful evaluation, experience, and knowledge may not eliminate. Few mining properties that are explored are ultimately developed into producing mines. Major expenses are required to establish reserves by drilling and to construct mining and processing facilities. Large amounts of capital are frequently required to purchase necessary equipment. Delays due to equipment malfunction or inadequacy affect the Company’s results of operations. It is impossible to ensure that the current exploration programs on properties in which the Company has an interest will result in profitable commercial mining operations.

     Whether a copper and gold deposit will be commercially viable depends on a number of factors, including the particular attributes of the deposit, such as its size and grade, costs and efficiencies of the recovery methods that can be employed, proximity to infrastructure, financing costs and governmental regulations, including regulations relating to prices, taxes, royalties, infrastructure, land use, importing and exporting of copper and gold, and environmental protection. The effect of these factors cannot be accurately predicted but the combination of these factors may result in the Company not receiving an adequate return on its invested capital.

     The operations of the Company are subject to the hazards and risks normally incident to exploration, development, and productions of copper and gold, any of which could result in damage to life or property, environmental damage and possible legal liability for such damage. The activities of the Company may be subject to prolonged disruptions due to weather conditions depending on the location of operations in which the Company has interests. Hazards, such as unusual or unexpected formations, faults and other geological structures, rock bursts, pressures, cave-ins, flooding, or other conditions may be encountered in the exploration, mining, and removal of material.

     Changes to the extensive regulatory and environmental rules and regulations to which the Company is subject could have a material adverse effect on the Company’s future operations.

     The Company is subject to risks related to environmental liability, including liability for environmental damages caused by mining activities prior to ownership by the Company. Mining like many other extractive natural resource industries, is subject to potential risks and liabilities associated with pollution of the environment and the disposal of waste products occurring as a result of mineral exploration and production. The payment of such liabilities would reduce funds otherwise available and could have a material adverse effect on the Company. Should the Company be unable to fund fully the cost of remedying any environmental problem, the Company might be required to suspend operations or enter into interim compliance measures pending completion of the required remedy, which could have a material adverse effect on the operations and business of the Company.

     The Company’s operations could be adversely affected by changes in mining laws related to royalties, net profit payments, land and mineral ownership and similar matters.

     Mining, processing, development, and exploration activities depend, to one degree or another, on adequate infrastructure. Reliable roads, bridges, power sources, and water supply are important determinants which affect capital and operating costs. Lack of such infrastructure or unusual or infrequent weather phenomena, sabotage, terrorism, government, or other interference in the maintenance or provision of such infrastructure could adversely affect the Company’s operations, financial condition, and results of operations.

     The reserve and resource figures of the Company are only estimates and are subject to revision based on developing information. A significant reduction in these reserves and resources or in their estimates could

negatively affect the price of the Company’s stock. The figures for reserves and resources presented herein, including the anticipated tonnages and grades that will be achieved or the indicated level of recovery that will be realized, are estimates. Such estimates are materially dependent on prevailing copper and gold prices and on costs of recovering and processing mineral at the individual mine sites. Market fluctuations in the price of copper and gold or increases in the costs to recover copper and gold at the Company’s mines may render the mining of ore reserves uneconomical and materially adversely affect the Company’s results of operations. Moreover, various short-term operating factors may cause a mining operation to be unprofitable in any particular accounting period.

     There are numerous uncertainties inherent in estimating quantities of mineral reserves and resources. The estimates in this Report are based on various assumptions relating to copper and gold prices and exchange rates during the expected life of production, mineralization of the area to be mined, the projected cost of mining, and the results of additional planned development work. Actual future production rates and amounts, revenues, taxes, operating expenses, environmental and regulatory compliance expenditures, development expenditures, and recovery rates may vary substantially from those assumed in the estimates. Any significant change in these assumptions, including changes that result from variances between projected and actual results, could result in material downward revision to current estimates.

     If the Company does not develop additional mineral reserves, it may not be able to sustain future operations. Because mines have limited lives, the Company must continually replace and expand its mineral reserves as its mines produce copper and gold in order to continue its operations. The life-of-mine estimates included in the Report for each of the Company’s material properties are based on a number of factors and assumptions and may prove incorrect. The Company’s ability to maintain or increase its annual production of copper and gold will significantly depend on its ability to bring new mines into production and to expand mineral reserves at existing mines.

     The Company requires the issuance and renewal of licenses and permits in order to conduct its operations, and failure to receive these licenses may result in delays in development or cessation of certain operations. The operations of the Company require licenses and permits from various governmental authorities to exploit its properties, and the process for obtaining licenses and permits from governmental authorities often takes an extended period of time and is subject to numerous delays and uncertainties. Such licences and permits are subject to change in various circumstances. The Company may be unable to timely obtain or maintain in the future all necessary licenses and permits that may be required to explore and develop its properties, commence construction or operation of mining facilities and properties under exploration or development or to maintain continued operations that economically justify the cost.

     The success of the Company is dependent on copper and gold prices over which it has no control. The profitability of the Company’s operations is significantly affected by changes in the market price of copper and gold. Copper and gold prices fluctuate on a daily basis and are affected by numerous factors beyond the control of the Company. The supply and demand for copper and gold, the level of interest rates, the rate in inflation, and changes in exchange rates can all cause significant fluctuations in copper and gold prices. Such external economic factors are in turn influenced by changes in international investment patterns and monetary systems and political developments. The price of copper and gold has fluctuated widely and future serious price declines could cause continued commercial production to be impractical. Depending on the price of copper and gold, cash flow from mining operations may not be sufficient to cover costs of production and capital expenditures. If, as a result of a decline in copper and gold prices, revenues from metal sales were to fall below cash operating costs, production may be discontinued.

     The mineral exploration and mining business is competitive in all of its phases. The Company competes with numerous other companies and individuals, including competitors with greater financial,

technical and other resources than the Company, in the search for and the acquisition of attractive and mineral properties. The ability of the Company to operate successfully in the future will depend not only on its ability to develop its present properties, but also on its ability to select and acquire suitable producing properties of prospects for mineral explorations. The Company may be unable to compete successfully with its competitors in acquiring such properties or prospects on terms it considers acceptable, if at all.

     The Company has a history of losses, and future profitable operations cannot be assured. The Company may require additional capital that may not be available. The mining, processing, development, and exploration of the Company’s properties may require substantial additional financing. Failure to obtain sufficient financing may result in the delay or indefinite postponement of exploration, development or production on any or all of the Company’s properties, or even a loss of property interest. Additional capital or other types of financing may not be available if needed or, if available, the terms of such financing may be unfavourable to the Company.

     The Company’s insurance may not cover the risks to which its business is exposed. The Company’s business is subject to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, labor disputes, adverse property ownership claims, unusual or unexpected geological conditions, ground or slope failure, cave-ins, changes in the regulatory environment and natural phenomena such as inclement weather conditions, floods and earthquakes. Such occurrences could result in damage to mineral properties or production facilities, personal injury or death, environmental damage to the Company’s properties or the properties of others, delays in mining, monetary losses and legal liability.

     Available insurance does not cover all the potential risks associated with a mining company’s operations. The Company may also be unable to maintain insurance to cover insurable risks at economically feasible premiums, and insurance coverage may not be available in the future or may not be adequate to cover any resulting loss. Moreover, insurance against risks such as the validity and ownership of unpatented mining claims and mill sites and environmental pollution or other hazards as a result of exploration and production is not generally available to the Company or to other companies in the mining industry on acceptable terms. As a result, the Company might become subject to liability for pollution or other hazards for which it is uninsured or for which it elects not to insure because of premium costs of other reasons. Losses from these events may cause the Company to incur significant costs that could have a material adverse effect upon financial condition and results of operations.

     Fluctuations in the exchange rate between Canadian and United States dollars may affect the United States dollar value of the Company common shares in ways that are different than changes in the Canadian dollar value of the Company common shares.

     The failure of the Company to pay royalties would adversely affect its business and operations. The Company’s mining properties are subject to various royalty and land payment agreements. Failure by the Company to meet its payment obligations under these agreements could result in the loss of related property interests.

     The business of the Company is dependent on good labor and employment relations. Production at the Company’s mines is dependent upon the efforts of employees of the Company and its employees may be impacted by changes in labor relations which may be introduced by, among others, employee groups, unions, and the relevant governmental authorities in whose jurisdictions the Company carries on business. Adverse changes in such legislation or in the relationship between the Company and its employees may have a material adverse effect on the Company’s business, results of operations, and financial condition.

     The loss of key executives could adversely affect the Company. The Company has a relatively small executive management team. In the event that the services of a number of these executives were no longer available, the Company and its business could be adversely affected. The Company does not carry key-man life insurance with respect to its executives.

     Shortage of supplies could adversely affect the Company’s ability to operate. The Company is dependent on various supplies and equipment to carry out its mining operations. The shortage of such supplies, equipment and parts could have a material adverse effect on the Company’s ability to carry out its operations and therefore limit or increase the cost of production.

     It may be difficult to enforce a United States judgement against the officers and directors of the Company or the experts named in the Report or to assert United States securities laws claims in Canada. Most of the executive officers and directors of the Company and its independent accountants are non residents of the United States, and all of the Company’s assets are located outside the United States. The executives and accountants reside in Canada, making it difficult or impossible to effect service upon them in the United States against the Company or such persons. Execution by United States courts of any judgment obtained against the Company or its officers or directors in United States courts would be limited to the assets of the Company or such persons, as the case may be, located in the United States. Additionally, it may be difficult for U.S. residents to obtain Canadian enforcement of U.S. judgment or to assert civil liabilities under United States securities laws in original actions instituted in Canada.

     In 2008, the Company will be dependent of four operations, the Copper Rand copper mine (the “Copper Rand Mine”), the Copper Rand mill (the “Copper Rand Mill”), the Merrill Island open pit (the “Merrill Pit”) and the Corner Bay copper project (the “Corner Bay Project”), as the source of its cash flow. The 2008 operating plan is based on a gold price of US$800 per ounce, a copper price of US$3.00 per pound and a Canadian/US dollar exchange rate of US$1.00/CAN$1.00 and anticipates cash production costs (excluding pre-production development, exploration and reclamation costs) of US$2.43 per ounce of copper for the Copper Rand Mine.

     The ability of the Company to achieve the cash production costs is largely based on the successful adoption of the operating assumptions and completion of the exploration and development work in the 2008 budget. Should metal prices decrease significantly or the US dollar decline significantly compared to the Canadian dollar or the cash cost be higher than projected, the ability of the mines to generate cash flow will be impaired.

     The Copper Rand Mine was in pre-production until the end of 2006. As a result, expected revenues generated from production at Copper Rand have been delayed and working capital was used to finance this delay. Additional investments have been required to increase the level of development and to change the mining method to include the mining method developed by Alimak AB (“Alimak Mining”) in order to add to the number of available stopes. Commencing on January 1, 2007, the mine reached commercial production and costs going forward have been carried on as operating costs. In addition, the Company signed an agreement with an effective date of January 1, 2007 with Ocean Partners UK Limited (“Ocean Partners”) for the purchase of the Company’s concentrate for a term of three (3) years ending on December 31, 2009 (the “Ocean Partners Agreement”). Following negociation with Ocean Partners to put in place additional financing from them, the contract was extended for an additional four (4) years now ending December 31, 2013.

     Development is underway on the Corner Bay deposit (the “Corner Bay Property”) which is the main asset of the Corner Bay Project. The extraction of the first ton of ore from the bulk sample was expected to begin in December 2007, but was delayed by the discovery of groundwater. The services of a consultant were retained to assist in implementing a grouting strategy to mitigate the groundwater issue and allow production

to begin as soon as possible. Although production has been delayed, the issue was successfully addressed and development in ore began in March 2008.

     The figures for mineral reserves and resources presented herein are estimates and no assurance can be given that the anticipated tonnages and grades will be achieved or the indicated level of recovery realized. In addition, no assurance can be given that the copper and gold prices on which these estimates are based can be achieved. See Item 4 headings “The Joe Mann Mine”, “The Copper Rand Mine”, “The Corner Bay Project” and sub-heading “Mineral Reserves and Resources”. As well, lead times required for underground stope preparation and development in mining operations can affect production decisions and schedules. Copper and gold prices fluctuations may render mineral reserves containing relatively lower grades of mineralization uneconomic. Moreover, short-term operating factors relating to the mineral reserves, such as the need for orderly development of ore bodies or the processing of new or different ore grades may cause the Company to be unprofitable in any particular accounting period.

     Environmental Matters

     Campbell holds all the permits required under the Environment Quality Act (Québec), the Mining Act (Québec) and other applicable legislation and regulations.

     During 1995, proposed amendments to the Mining Act (Québec) relating particularly to rehabilitation and restoration plans came into force. This legislation required that a rehabilitation and restoration plan be submitted for approval within one year of the legislation coming into force and that a financial guarantee be furnished with respect to such plan.

     The rehabilitation and restoration plans for the Joe Mann gold mine (the “Joe Mann Mine”) site were approved in early 2000 and a required amount of $350,000 was deposited as of December 31, 2005. The plan for the Campbell Mill site is currently under review. The appropriate method of re-mediating acid spots, which have appeared on fifty (50) hectares of previously re-vegetated tailings, is currently being reviewed. Two alternate methods are being considered which involve costs ranging from $10,000 to $30,000 per hectare. Campbell currently estimates that the maximum financial guarantee will be approximately $3,872,000 for the Campbell Mill. An amount of $808,000 was deposited as of December 31, 2006 for the purposes thereof. The asset retirement obligations total $4,249,000 for the Joe Mann Mine and the Campbell Mill sites as at December 31, 2007.

     Campbell, through its subsidiary MSV Restoration Inc., benefits from an environmental fund (the “Environmental Fund”) of approximately $4.3 million as at December 31, 2007 ($4.4 million in 2006 and $4.1 million in 2005) of which a $1,185,000 Canadian bond at fair value is currently held in trust by the ministère des Ressources naturelles et de la Faune (the “MRNF”) and of which the remaining $3,115,000 is currently held in a trust account managed by Computershare Trust Company of Canada (the “Trustee”). The Trustee had deposited with the MRNF the $1,185,000 financial guarantee in respect of the rehabilitation plan of the Company which was approved by the Québec mining authorities. The Environmental Fund was set aside for the restoration of the Copper Rand, Portage, Jaculet and Copper Cliff mining sites when the properties were acquired from Westminer Canada Limited (now WMC International Limited) (“Westminer”) in 1993. The asset retirement obligations for the Company regarding the Copper Rand, Portage, Jaculet and Copper Cliff mining sites total $3,028,000 as at December 31, 2007 ($2,826,000 in 2006). In the event there is a shortage of funds required to do the rehabilitation and restoration work, the shortfall will be assumed equally between the Company and the Société de développement de la Baie-James (“SDBJ”).

     In January 2004, the Oujibougoumou Cree initiated legal proceedings against the Company, claiming that the poor conditions of lakes in the region of Chibougamau, Québec was due to mining activities in the area. The Public Health Department, the ministère du Développement durable, de l’Environnement et des

Parcs (“MDDEP”) and the Québec Fish and Wildlife Association began to study the issue. In June 2006, the parties agreed to suspend proceedings for a period of two (2) years. It is not possible to determine either the outcome of the proceedings or the financial consequences for the Company.

ITEM 4. INFORMATION ON THE COMPANY

A.

History and Development of the Company

     General Background

     Campbell was incorporated in June 1950 under the laws of British Columbia. On September 8, 1982, the Company was continued under the Canada Business Corporations Act (Canada) (the “CBCA”) and on June 8, 1983, in connection with an amalgamation of three other companies, the name of the Company was changed from GM Resources Limited to Campbell Resources Inc. The Company’s registered office is located at 1155 rue University, Suite 1405, Montréal, Québec, H3B 3A7. The telephone and fax numbers are (514) 875-9033 and (514) 875-9764 respectively.

     Significant Subsidiaries

     MSV Resources Inc. and GéoNova Explorations Inc.

     On June 30, 2001 the Company merged, by way of plan of arrangement, with MSV Resources Inc. and GéoNova Explorations Inc. The merger was undertaken in order to consolidate the operations of the three companies in the Chibougamau mining camp in northwestern Québec. Following this merger, GéoNova Explorations Inc. and MSV Resources Inc. became wholly-owned subsidiaries of Campbell.

     Meston Resources Inc.

     In 1983, Campbell acquired a minority position in Meston Lake Resources Inc., that amalgamated with a wholly-owned subsidiary of the Corporation in 1987, to become Meston Resources Inc. (“Meston”), now a wholly-owned subsidiary of Campbell.

     On October 23, 2006, the Company, through its subsidiary Meston, acquired all of the outstanding shares of Pinnacle International (Taylor) Plaza Inc. (“PINNACLE”) which then became a wholly-owned subsidiary of the Company. PINNACLE, a corporation involved in residential development, was subsequently wound-up in Meston and dissolved on November 9, 2006.

     Corporation Copper Rand Inc.

     In May 2000, a new company, Corporation Copper Rand Inc. (“CCR”), was formed for the purpose of financing the Copper Rand Project, as more fully described under section entitled “Property, Plants and Equipment”.

     The Company, through its wholly-owned subsidiary, MSV Resources Inc., originally held a 16% equity interest and is the operator of the Copper Rand project (the “Copper Rand Project”) with its three partners, the Solidarity Fund QFL (the “Fund”), SDBJ and SOQUEM Inc. (“SOQUEM”) (collectively, the “Partners”), holding 28%, 28% and 28% respectively. SDBJ, a Québec government-owned economy-based corporation, has as its mission to further the development of natural resources, other than hydro electrical resources, in the James Bay territory within a perspective of sustainable development. SOQUEM is a division of SGF Minéral inc., which is a subsidiary of the Société générale de financement du Québec (the

“SGF”) (a Québec government-owned corporation). Investissement Québec is a government corporation with a full range of resources to both attract foreign investment and support the development of Québec-based companies of all sizes in order to create jobs. It makes use of significant financial levers to promote investment projects that meet the government’s economic development priorities. The mission of the SGF is to carry out economic development projects in co-operation with partners and in accordance with accepted requirements of profitability, in particular in the industrial sector.

     The Copper Rand Project, as finally approved, included the transfer of MSV Resources Inc. assets related to the project valued at $10,000,000 in return for i) a 16% interest in CCR, ii) the possible issuance of unsecured 8% convertible debentures by MSV Resources Inc. for a maximum of $15,000,000, iii) the possible issuance of shares of MSV Resources Inc. exchangeable into up to 21,512,195 common shares of the Company in consideration of the exchange of interests held by the Partners in CCR, iv) the possible issuance of 2,439,025 common shares of the Company to Investissement Québec and v) the set-up of a guarantee by MSV Resources Inc. in favour of Investissement Québec. All common shares were to be issued at a minimum price of $1.025 per share and convertible debentures had a conversion price of $1.025 per share.

     In July 2001, in accordance with the terms of their initial investment, SOQUEM and SDBJ exchanged a 5% interest in CCR into convertible debentures of MSV Resources Inc. increasing MSV Resources Inc.’s interest in CCR from 16% to 26%. MSV Resources Inc. issued an aggregate of $2.5 million of debentures bearing interest at a base rate of 8% annually, escalating based on metal prices and CCR’s production levels. The debentures are convertible into Campbell common shares at a conversion price of $1.025 per share.

     On October 1, 2003, Campbell, acquired through MSV Resources Inc. control of CCR by increasing its interest from 26% to 76% through the issuance of 12,195,120 Campbell common shares.

     On November 30, 2004, the Company acquired the remaining 24% of the outstanding shares of CCR, which became a wholly-owned subsidiary. The Company entered into an agreement with the Fund, SGF Mines Inc. (“SGF Mines”) and SDBJ by which Campbell, through MSV Resources Inc., acquired each of their respective 8% interests in CCR by issuing, to each of the Partners, a total of 1,951,220 Campbell common shares, for a total of 5,853,660 shares. The Partners have participated in the development of the Copper Rand Project since 2001. In June 2003, the Partners agreed to convert part of their interest in CCR into shares of Campbell thus increasing Campbell’s participation to 76%. This new agreement allowed Campbell to acquire all minority interests, which had a book value of $5,721,000 as of November 30, 2004. On December 31, 2004, MSV Resources Inc. and CCR merged to become MSV Resources Inc.

     1329498 Alberta Ltd. and MSV Resources 2007 Inc.

     In November 2007, Campbell and its subsidiaries completed a reorganisation involving MSV Resources Inc., 1329498 Alberta Ltd. and other affiliates of Campbell. As a first step, in April 2007, substantially all of the assets of MSV Resources Inc. were transferred to a wholly-owned subsidiary of Campbell incorporated in 2005, 6479499 Canada Inc., in consideration for the issuance to MSV Resources Inc. of one preferred share of its capital stock and the assumption of MSV Resources Inc.’s debts. In June 2007, 1329498 Alberta Ltd. (“AlbertaCo”) was incorporated. 99.999% of the capital stock of AlbertaCo was issued to Campbell and one common share was issued to an arm’s length party. AlbertaCo acquired on November 9, 2007 all of the issued and outstanding shares of MSV Resources Inc. Moreover, as part of this reorganization, a private capital firm invested $2.050 million in AlbertaCo by way of a convertible debenture. On November 12, 2007, 6479499 Canada Inc. changed its name to MSV Resources 2007 Inc. (“MSV”).

     A chart of the current structure can be found under Section C entitled “Organizational Structure”.

     Acquisition or Disposition of Material Assets

     Mexican Assets

     During the 2001 fiscal year, the Company entered into an option agreement to sell its Mexican subsidiary, Oro de Sotula, S.A. de C.V. (“Sotula”), acquired in 1994 and which held the Santa Gertrudis property, to Queenstake Resources Ltd. (“Queenstake”). This option was exercised effective January 31, 2002. Queenstake assumed full liability for proper abandonment and reclamation of the Santa Gertrudis property and has agreed to indemnify that company with respect to all environmental obligations. The transaction provided that the Company could receive up to US$2 million depending on future events, plus a royalty of 1% of the net smelter returns on any future production from the property and a one-third share of any proceeds from a further sale of the Santa Gertrudis property by Queenstake. In September 2002, the Company received US$150,000 through the issuance of 978,500 shares of Queenstake, pursuant to a provision note triggered at a gold price of US$330. These shares were sold for net proceeds of $430,000, during the first quarter of 2003. In 2003, payment of the remaining notes totalling US$1,850,000 was triggered and the Company received a final amount of US$1,650,000 of which CAN$1,492,000 was paid in cash and the balance by the issuance of common shares by Queenstake.

     In November 2002, the Company sold its other Mexican subsidiary, Recursos Escondidos, S. A. de C.V., holder of the Roca Roja property to International Coromandel Resources Ltd. (“Coromandel”). As consideration for the sale, the Company received 50,000 common shares of Coromandel; a royalty of 1% of the net smelter returns and a royalty of US$0.10 per ton of ore mined up to a maximum of US$2 million in respect of any future operations on the property. Coromandel assumed full liability for proper abandonment and reclamation of the Roca Roja property and indemnified the Company with respect to all environmental obligations.

     In 2002, Queenstake sold the property to Coromandel and, under the agreement between the Company and Queenstake, the Company received one-third of the consideration consisting of 120,769 shares of Coromandel and a royalty on the Santa Gertrudis property of two-thirds of a percent (²/₃%) of the net smelter returns.

     Discovery Project

     On October 8, 2002, Strateco Resources Inc. (“Strateco”) signed a final agreement with GéoNova, under which Strateco has the option to acquire a 50% interest in the Discovery gold project (the “Discovery Project”) located on the Discovery property (the “Discovery Property”) by funding $4,500,000 in exploration over four (4) years. On February 15, 2006, GéoNova entered into an agreement with Strateco whereby GéoNova sold the Discovery Property to Strateco for a global value of $1.5 million (in cash & shares).

     Bachelor Lake Property

     In July 2003, the Company entered into an agreement with Wolfden Resources Inc. (“Wolfden”) entitling Wolfden to acquire a 50% interest in the Bachelor Lake property (the “Bachelor Lake Property”), located in the Township of Lesueur, Québec, by committing to spend $3,000,000 in exploration work on the property over three years, of which $1,500,000 would be spent in the first year, and by paying $100,000 per year over the first two years or, in lieu of each payment, to issue 50,000 common shares of its capital stock.

     In 2004, the Company, through its wholly-owned subsidiary GéoNova, entered into an agreement with Metanor Resources Inc. (“Metanor”) to sell all of its interest in the Bachelor Lake Property. Metanor acquired 100% of the rights, titles, interest and the Wolfden option for a purchase price of $2,300,000 which

has been fully paid. The Sale and Purchase Agreement provides for Metanor to assume the obligations of GéoNova under the Wolfden Option and Joint Venture Letter of Agreement dated June 18, 2003 and to assume together with Wolfden the royalty payments to be paid once the Bachelor Lake Property is put into production.

     The Eastmain Mine

     On February 27, 2007, MSV Resources Inc. sold the Eastmain gold mine (the “Eastmain Mine”) to Eastmain Mines Inc., a wholly owned subsidiary of Eastmain Resources Inc. (“Eastmain”), in consideration of $2.5 million in cash at closing, and 1,000,000 in common shares of Eastmain and 500,000 share purchase warrants allowing for the purchase of common shares of Eastmain at the price of $1.00 per share, for a period of twelve (12) months. On May 18, 2007, Eastmain has issued an additional 1,000,000 common shares and 500,000 purchase warrants allowing for the purchase of common shares at price of $1.50 per share for a period of 12 months from the date of issuance. A royalty of 2% of the net smelter returns on any production over and above 250,000 ounces of gold will also be retained with an option in favour of Eastmain to re-purchase one-half of the royalty for $1 million.

     Joe Mann Mine

     On September 20, 2007, Meston and Gold Bullion Development Corp. (“Gold Bullion”) executed a letter of intent regarding the acquisition of the Joe Mann Mine by Gold Bullion in consideration for: (i) $200,000 paid at the signing of the letter of intent; (ii) debentures in the amount of $5,100,000 with annual interest of 8% in the name of Meston secured by a first hypothec on immovables including the hoist and head frame, and stores; (iii) interest on debentures to be paid quaterly; (iv) redemption of debentures to be done in three (3) equal installments with the first payment of $1,700,000 eighteen (18) months from the date of the definitive agreement and the other payments to be made twelve (12) and twenty-four (24) months later; and (iv) a net smelter return royalty of 4% on all production from the Joe Mann Mine to be paid to Meston. Meston would be re-imbursed by Gold Bullion the amount of $500,000 on deposit with the MRNF for restoration of the Joe Mann Mine. However, as of March 31, 2008, Gold Bullion has not met its obligations under the memorandum of understanding and is in default.

     The Chevrier Project

     GéoNova entered into an agreement on November 8, 2007 with Tawsho Mining Inc. (“Tawsho”) whereby Tawsho acquired all of GéoNova’s interests in the Chevrier project (the “Chevrier Project”), comprised of five claim blocks including 270 mining claims covering 4,297 hectares located in the Fancamp, Hauy and Queylus Townships, near Campbell’s Joe Mann Mine, about 30 km southeast of Chapais and 35 km south of Chibougamau, Québec. The agreement provided that Tawsho, in consideration for the acquisition of the Chevrier Project claims, shall pay to GéoNova the sum of $1,500,000, $750,000 of which was payable upon execution of the agreement and $750,000 will be payable twelve (12) months later. The agreement also provided that default by Tawso to make the second payment on due time will allow GéoNova to demand the resolution of the sale without reimbursement of the first payment or indemnity for work programs or other improvements brought to the Chevrier property and that Tawsho shall not encumber the Chevrier property until full payment has been received by GéoNova.

     Bankruptcy, Receivership or Similar Proceedings

     Delays in completing development of the Copper Rand Mine resulted in substantial additional costs and production shortfalls which brought about a rapid deterioration of the Company’s financial situation. As a result, on June 30, 2005, the Company and its subsidiaries filed for protection under the Companies’

Creditors Arrangement Act (Canada) (“CCAA”) and were granted an initial order requiring the presentation of plans of arrangement (collectively, the “Plan of Arrangement”).

     On June 8, 2006, the Company filed the Plan of Arrangement. On June 26, 2006, the Plan of Arrangement was approved at a meeting of creditors of the Company and its subsidiaries, and on June 27, 2006, the Superior Court of Québec sanctioned the Plan of Arrangement. On February 27, 2007, the court appointed monitor under the CCAA, Raymond Chabot Inc. (the “Monitor”) issued a Certificate of Execution with respect to the Plan of Arrangement of Campbell confirming that it has executed all of its obligations pursuant to its plan of arrangement with its creditors. The Company also remitted to the Monitor all amounts required for the payment in full of the claims made by the creditors of GéoNova. The Monitor has certified that GéoNova has now fulfilled all of its obligations with respect to the Plan of Arrangement.

     As part of the November 2007 reorganisation of the subsidiaries of Campbell, which was contemplated under the Plan of Arrangement, a private capital firm invested $2.050 million in one of the Corporation’s subsidiaries by way of a convertible debenture. The net proceeds of that investment were used to pay debts owed to the Corporation by this subsidiary and were ultimately transferred to the Monitor in accordance with the Plan of Arrangement. With this agreement, MSV Resources Inc. was able to fulfil its obligations under the Plan of Arrangement and the Monitor certified that MSV Resources Inc. had fulfilled all of its obligations with respect to the Plan of arrangement and a Certificate of Execution was filed on November 27, 2007.

     The court granted extensions of the CCAA protection to May 31, 2008 for the subsidiary Meston.

     Capital Expenditures and Divestitures for the Last Three Financial Years

     AlbertaCo

     As mentioned under subsection entitled “Significant Subsidiaries”, in June 2007, Campbell acquired 99.999% of the capital stock of AlbertaCo, a newly incorporated company, in consideration for the transfer of all shares of MSV Resources Inc. owned by Campbell to AlbertaCo and the issuance by AlbertaCo of a promissory note, having a principal amount equal to the aggregate of any and all mining credits, Goods and Services Tax and the Québec Sales Tax reimbursements and other amounts received by MSV Resources Inc. pursuant to tax legislation prior to the dissolution of MSV Resources Inc. following its winding-up into AlbertaCo, which were accrued prior to the date of issuance of the promissory note (net of any amounts payable, other than amounts assumed by MSV).

     Joe Mann Mine

     A $4 million loan from Investissement Québec was finalized on May 10, 2002, of which $3.6 million was drawn down during 2002 and used, in part, to finance the development and exploration plan at the Joe Mann Mine. This loan was repayable in quarterly instalments of $670,000, the last of which were made in the first quarter of 2004. Under the terms of the credit facility, 606,061 share purchase warrants, which expired in February 28, 2005, were issued to Investissement Québec, each warrant entitling its holder to purchase one common share of the Company at a price of $0.66.

     During the 2001 and 2002 fiscal years, the Company completed a three tranches $32,400,000 royalty financing on future production from the Joe Mann Mine for cash receipts of $1.7 million and notes receivable totalling $26.1 million. During the first quarter of 2003, with the decision not to bring the Corner Bay Property into production, Campbell re-purchased the royalty units in Corner Bay and sold additional units in the Joe Mann Mine. Following this transaction, 4,740 royalty units in the Joe Mann Mine, the maximum

number of units contemplated by the financing, were issued and outstanding. The royalty was paid to the unit holders based on the following formula: the fraction of outstanding royalty units over 4,740 units multiplied by $8 per ton of ore for the years 2002 and 2003, $14 for 2004, $35 from January 1, 2005 until the net proceeds of the royalty sale, plus interest of 10% compounded annually, exceed the aggregate of all royalty payments, from the date paid to the date of determination, at 10% compounded annually and $1.50 per ton thereafter. The unitholders had the right to require the Company to retract the royalty on or at any time after May 1, 2004 at the fair market value of the royalty unit. In 2005, the unitholders exercised their right and the Company repurchased the deferred royalty for a total lump sum of $5,900,000. This deferred royalty amounted to $24,908,000 at the time of the repurchase and the Company therefore recorded a gain of $19,008,000. However, given the uncertainty regarding the collection of the notes receivable from the unitholders, the Company has recorded an allowance for doubtful account equal to the remaining portion of the amount, which stood at $17,437,000 at the repurchase date. The net impact resulting from the repurchase of the deferred royalty aggregates $1,571,000 and was included in other income in 2005. The Company submitted on June 22, 2007 a notice of arbitration to the unitholders in order to recover the entire amount. On Novermber 2007, legal proceedings against the Company were initiated by the secutity agent for the unitholders, Promittere, in front of the Ontario Superior Court of Justice.

     Copper Rand Mine and Corner Bay Project

     The Company entered into a letter agreement dated April 18, 2006 (the “Nuinsco Letter Agreement”) with Nuinsco Resources Limited (“Nuinsco”) whereby Nuinsco agreed to (i) provide interim and ongoing consulting services respecting the operations of the Company’s mines, (ii) assist the Company in obtaining funding for the development of the Copper Rand Mine to a minimum of $5 million, (iii) subscribe for $2.5 million of units (the “Nuinsco Placement”) under the conditions of the Nuinsco Placement including (a) that the number of common shares in the share capital of Campbell comprising part of the Nuinsco Placement shall represent 10% of the number of outstanding common shares calculated on a fully diluted basis after giving effect to the Brokered Placement (as defined hereinafter) and the Rights Offering (as defined hereinafter) and (b) that the Company shall have completed the Brokered Placement (as defined hereinafter) and the Rights Offering (as defined hereinafter) and (iv) obtain a non-recourse project loan (the “Corner Bay Loan”) in an amount up to a maximum of $4,000,000 and/or other financing sufficient to develop and bring into commercial production a mine above the 250 metre level at the Company’s Corner Bay Property in accordance with a feasibility study to be prepared by Nuinsco at the Company’s cost, subject to the approval of the Company’s board of directors. Upon the execution of a definitive agreement with a lender respecting the Corner Bay Loan or prior to commencement of the development of the Corner Bay deposit, whichever occurs first, the Company agreed to transfer to Nuinsco, for no cost, an undivided 50% interest in the Corner Bay Property, free and clear of all liens, encumbrances, royalties and other interests whatsoever (other than a royalty of 2% of the net smelter return payable in respect of sales exceeding 750,000 tons of ore and the encumbrances created pursuant to the Corner Bay Loan).

     On April 20, 2006, the Company and Sprott Securities Inc. (the “Agent”) entered into an agreement whereby the Agent agreed to act as agent of the Company to sell, on a best effort private placement basis, up to 100 million special warrants, at a price of $0.08 per special warrant for proceeds of up to $8 million which was subsequently increased to 125 million special warrants, at a price of $0.08 per special warrant for proceeds of up to $10 million (the “Brokered Placement”).

     On May 1, 2006, the Company entered into an operating consulting agreement with Nuinsco (the “Operating Consulting Agreement”), whereby Nuinsco provides consulting services for Campbell’s development and mining activities, including development to increase production at the Copper Rand Mine, development of the Corner Bay Property and operation of the Joe Mann Mine. Nuinsco has completed a study and prepared a development and mining plan which could provide the additional production necessary to

bring the Corner Bay Property into production. The Operating Consulting Agreement has been in effect since May 1, 2006 and Nuinsco shall be entitled to terminate the Operating Consulting Agreement upon thirty (30) days prior notice to the Company and the latter shall be entitled to terminate the Operating Consulting Agreement upon 180 days prior notice to Nuinsco. Under the Operating Consulting Agreement, Nuinsco received: (i) 2 million common shares of the Company upon commencement of the provision of services under the Operating Consulting Agreement; (ii) 1 million common shares of the Company upon completion of the Brokered Placement, Nuinsco Placement and Rights Offering (as defined hereinafter); (iii) $25,000 plus 200,000 common shares of the Company per month (up to a maximum of 4 million common shares); and (iv) share purchase warrants equal to 20% of the outstanding common shares of the Company, after completion of the Brokered Placement, Rights Offering and Nuinsco Placement. The Company accounted for these warrants in 2006, since all the conditions had been met as at December 30, 2006, even if the issuance of the warrants was delayed to January 18, 2007 due to the necessity to obtain additional regulatory approval required by the increase in the total number of warrants to be issued, compared to the pre-approved number, the fair value of the 67,807,429 warrants, exercisable at a price of $0.10 per share until January 18, 2009, was estimated at $4,218,000 and accounted for as reorganisation costs.

     On April 23, 2007, the Company closed a $7 million private placement equity financing allowing Nuinsco to complete its earn-in of the 50% carried interest and be entitled to 50% of the operating cash flow generated by the Corner Bay Project. On July 23, 2007, a Participation Agreement was signed between MSV and Nuinsco providing the following: 100% of operating cash flow is being retained by Campbell until it will recoup capital expenditures incurred on or after December 31, 2006 to develop the Corner Bay Property and subsequently, 50% of positive operating cash flow shall be retained by Campbell to repay historical capital expenditures of approximately $4.1 million, with the remaining 50% of positive cash flow to be distributed equally to Nuinsco and Campbell. Thereafter, operating cash flow will be distributed to Nuinsco and Campbell on a 50:50 basis.

     Methods of Financing

     For the fiscal years ended December 31, 2001, 2002, 2003 and 2004, the Company received $4,896,000 in mining tax credits from Québec governmental authorities. The Company has claimed approximately $429,000 in mining tax credits for the fiscal year ended December 31,2005 and approximately $370,000 for the fiscal year ended December 31, 2006 which are currently under review by Quebec governmental authorities.

     In March 2004, the Company closed a private placement led by GMP Securities Ltd. and including Westwind Partners Inc., Sprott Securities Inc., Haywood Securities Inc. and Maison Placements Canada Inc., of 11,023,000 units at $0.80 per unit, for gross proceeds of $8,818,400. Each unit consisted of one common share and one-half of one common share purchase warrant. Each whole common share purchase warrant was exercisable for one common share at $1.20 per share for a period of three years. The common share purchase warrants expired on March 11, 2007 without being exercised. The proceeds of this private placement were used for the development of the Copper Rand Mine.

     In 2004, the Company concluded an amendment to the convertible debentures to postpone all payments by one year. The convertible debentures are considered as pre-petition liability under the Plan of Arrangement pursuant to the CCAA proceedings. These debentures are convertible at any time, at the option of the holders into common shares of MSV Resources Inc. and will bear interest at a base rate of 8% annually plus added interest based on metals prices and CCR’s production volume. Additional approval by regulatory authorities will be required should the additional interest be converted into shares. The conversion price is $1.025 per share. Conversion of all the outstanding debentures would require the issuance of 634,146

common shares of Campbell. The debentures are refundable as to 20% of capital on July 1, 2005, as to 40% on July 1, 2006 and as to 40% on July 1, 2007.

     Beginning on the first anniversary, the debentures are convertible at the MSV Resources Inc.’s option at a conversion price equal to the average closing price of Campbell’s common shares over the 20 trading days prior to conversion, on condition that the average closing price of Campbell common shares over the 20 trading days prior to the date of conversion is at least equal to or greater than twice the adjusted conversion price under the terms of the debentures. Pursuant to the exercise of its conversion rights, MSV Resources Inc. can only convert debentures up to a maximum of the lesser of 25% of the number of Campbell common shares that are issued and outstanding on such date and 40% of the trading volume of the Campbell common shares on the Toronto Stock Exchange (the “TSX”) over the six-month period prior to conversion. The terms of the debentures also provide for a 6-month waiting period between the conversion of any debenture by MSV Resources Inc. and provide for an escalation in the conversion price of $1.025 for each US$10 increase in the price of gold above US$350 up to a maximum escalation of $1.64.

     During the month of October 2004, the Company obtained a line of credit of up to US$8 million with Auramet Trading, LLC (“Auramet”) in order to finance 90% of the payable copper and silver content and 100% of the payable gold content included in the concentrate originally shipped to Falconbridge Limited’s smelting facilities and shipped since 2007 to Ocean Partners pursuant to the Ocean Partners Agreement, from the Copper Rand and Joe Mann Mines. The Company paid a fee of US$100,000 and issued 200,000 share purchase warrants, giving Auramet, for a three-year period, the right to subscribe to 200,000 common shares at a price of $0.65 per share. This line of credit terminated on December 31, 2005. In January 2006, this line of credit was extended to December 31, 2006 with an increase in the interest rate to LIBOR plus 4% and the issuance of 200,000 additional share purchase warrants for a two-year period at a price of $0.20 per share. Additional fees with respect to said extension are US$25,000 paid from the first payment under the facility and US$25,000 from the first payment made in June 2006. Monthly administrative fees of US$2,500 were to be deducted from the first payment in each month of the facility; said administrative fee to cease for each month following the month that the obligors emerge from the protection of the CCAA. On the maturity date, the line of credit with Auramet was not renewed.

     In 2004, MSV Resources Inc. entered in an exchangeable capital units (“ECU”) financing of $4,000,000 with RMB Resources Ltd. (“RMB”), guaranteed by a first-ranking hypothec on the Corner Bay, Eastmain and Joe Mann properties, and a floating charge on all other Company assets. The net proceeds were used to complete the development at the Copper Rand Mine and to increase working capital. The Company repaid the $4,000,000 loan granted by RMB on September 29, 2006 with the proceeds of its financings in 2006.

     The Company completed a $1,800,000 non-brokered private placement in December 2004 through the issuance of 2,690,367 flow-through shares to private investors. The amount raised under this private placement allowed Campbell to pursue its exploration programs on the Corner Bay, Jaculet and Eastmain properties.

     On May 26, 2006, the Company closed the Brokered Placement whereby the Company issued 125 million special warrants at $0.08 per special warrant for aggregate gross proceeds of $10 million. In connection with the Brokered Placement, the Company paid the Agent 6% of the gross proceeds of the Brokered Placement and issued 7,500,000 broker warrants to the Agent, representing 6% of the number of special warrants purchased under the Brokered Placement. Each broker warrant is exercisable at any time for one common share at a price of $0.08 per share for a period of 2 years from the closing date. The Brokered Placement was allowed by prospectus dated September 27, 2006 which was amended on October 18, 2006 (the “2006 Prospectus”).

     The 2006 Prospectus also qualified a rights offering to the shareholders of the Company of up to 233,220,881 rights to purchase 69,966,264 (the “Rights Offering”) under the terms and conditions described hereinafter. The Company issued transferable rights to the holders of its common shares at the close of business on October 30, 2006. Each shareholder of the Company received one transferable right (a “Right”) for each share held and every ten (10) Rights entitled the holder to subscribe for and purchase three Campbell units at a price of $0.08 per unit up to November 24, 2006. Additional units were subscribed for pursuant to the additional subscription privilege. Each unit consisted of a common share and one-half of one common share purchase warrant. Each whole warrant entitles its holder to subscribe for one additional common share at a price of $0.15 per share until May 26, 2008. In the event that the Rights Offering was not fully subscribed, the Agent and Nuinsco had the option to take up any shortfall on a prorate basis to their equity financings. For greater certainty, neither the Agent nor Nuinsco was obligated to take up any such shortfall. On November 24, 2006, the Company announced that its rights offering had been fully subscribed, raising proceeds of $5,597,301.

     On December 30, 2006, the Company and Nuinsco closed the Nuinsco Placement whereby Nuinsco subscribed for 31,250,000 units for gross proceeds of $2.5 million. Each unit consists of one common share and one-half common share purchase warrant. Each whole warrant entitles its holder to subscribe for one common share of the Company at a price of $0.15 per share until May 26, 2008.

     On April 23, 2007, the Company closed a $7 million private placement equity financing, consisting of 56 million flow-through common shares at a price of $0.125 per share with a syndicate of agents lead by Conmark Securities Inc. and including Dundee Securities Corporation and Octagon Capital Corporation which received $420,000 in commissions and 3,360,000 broker warrants each entitling its holder to purchase one common share in the capital stock of the Company at a price of $0.13 for a period of 18 months from the closing date.

     The completion of this financing triggerered the availability of a further $4 million in convertible debt financing that was equally issued to Nuinsco and Ocean Partners on July 20, 2007. The convertible debentures bear interest at 11.5% per annum and are convertible into units of Campbell at a price of $0.13 per unit, with each unit consisting of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to purchase one additional common share of Campbell for $0.16 per share for a period of twenty-four (24) months from closing. The convertible debentures mature two years after the closing and are secured by a first charge on Corner Bay.

     On November 26, 2007, the Company closed a $2.5 million non-brokered private placement of 14,705,883 flow-through common shares priced at $0.17 per flow-through common share. Cash commissions totalizing $134,220 were paid to agents.

     The Company closed another non-brokered private placement of 3,105,882 flow-through common shares priced at $0.17 per flow-through common share on December 21, 2007 for total proceeds of $528,000.

B. Business Overview

     Nature of the Company’s Operations and Activities

     The Company sells metals on international markets at prices that fluctuate daily based on world market supply and demand and is in competition with other mining companies, insofar as they produce the

same product, in a market where price and quality advantages cannot be claimed by any of the market participants.

     Factors that allow producers to remain competitive in the market over the long-term are the quality (grade, metallurgy, etc.), and size of the ore body, cost of production and the proximity to market. In all these factors, the Company is competitive to greater or lesser degrees; but because of the number of companies and variables involved, no individual or group of producers can be pointed to as being in direct competition with Campbell.

     Except as otherwise noted herein, there have been no recent changes with respect to properties which the Company owns, or in which it has significant interests, which have materially affected operating profits. Except as herein noted, to the knowledge of the Company, it and its subsidiaries are in compliance with all environmental laws and regulations in effect in all jurisdictions in which operations are being conducted.

     The main assets of the Company are the Joe Mann Mine, the Copper Rand Mine and the Corner Bay Property, which are all located in Québec, Canada. However, a letter of intent has been signed by Meston and Gold Bullion in which Meston agrees to sell the Joe Mann Mine to Gold Bullion.

     Joe Mann Mine

     The Joe Mann Mine is an underground gold mine owned by Meston and is located near the town of Chibougamau, which is approximately 350 miles north of Montréal, Québec. Meston is a wholly-owned subsidiary of the Company. The Joe Mann Mine was brought back into production by the Company in 1987. After a shutdown in November 2000, the mine resumed production in April 2002 and has been in production until September 11, 2007, when the Company stopped the mining operations of the Joe Mann Mine, since results from deep drilling programs were unsatisfactory to the Company.

     On September 20, 2007, Meston and Gold Bullion executed a letter of intent regarding the acquisition of the Joe Mann Mine by Gold Bullion. See discussion of agreement with Gold Bullion in Item 4 under subsection entitled “Property, Plants and Equipment”.

     Copper Rand Mine

     The Copper Rand Mine, an underground copper mine owned by MSV, a wholly-owned subsidiary of the Company, is also located near the town of Chibougamau.

     Since 2001, development work has been performed to permit the access to the ore body between levels 4,000 and 5,000. The development work includes the deepening of the shafts to a depth of 4,320 ft. with all its infrastructure, a 3,800 ft. decline ramp with its conveyor, a 900 ft. raise of ventilation connected to the upper level and all the required development to access the ore between levels 4,790 and 4,510, and the modification to the hoist system and the preproduction. The Copper Rand Mine has been in production since January 1, 2007.

     The breakdown of gross metal sales of the Copper Rand Mine for the last three financial years are as follows:

		2007								2006								2005
Sales		Quantities				$’000				Quantities				$’000				Quantities				$’000
Gold (ounces)			4,733				3,365				3,631				2,769				7,098				4,036
Copper (lbs)			4,044,066				13,594				3,271,000				12,969				6,777,000				15,489
Silver (ounces)			10,749				126				8,813				134				21,820				183
Gain (loss ) on foreign exchange							(56	)							38								(144	)
Total gross metal sales							17,029								15,910								19,564

     Corner Bay Property

     The Corner Bay Property is located near the Chibougamau Lake in the townships of Lemoine and Obalski, about 20 km (in a straight line) from the city of Chibougamau, approximately 45 km by road. The Corner Bay Property covers approximately 256 hectares. A total of 16 claims cover the property. The claims covering the property are all held by MSV.

     In order to move forward the pre-feasability stage, the following work to be executed by the Company is part of recommendation made by Systèmes Géostat International Inc. in their technical report entitled Corner Bay deposit, Audit of Mineral Resources dated July 12, 2006. The Company must continue exploration drilling at depths below the diabase dyke in infill the drilling grid in the top part to increase the amount of indicated mineral resources. The Company must carry out copper metallurgical recovery investigations on diamond drill core and/or on bulk samples during or before pre-feasability study. The Company must proceed with the extraction of a bulk sample of approximately 42,000 tonnes by the sinking of a ramp to validate the mineral resources estimated within the first 300 vertical metres. A bulk sampling project has already been initiated by the Company.

     The extraction of the first ton of ore from the bulk sample was expected to begin in December 2007, but was temporarily delayed upon encounter with groundwater. The issue was successfully addressed in February 2008 and development in ore has begun in March 2008.

     Seasonality

     The Company’s operations are not expected to be seasonal and its mining and milling operations will be carried out year round.

     Material Effects of Government Regulations

     The Company requires the issuance and renewal of licenses and permits in order to conduct its operations, and failure to receive these licenses may result in delays in development or cessation of certain operations. The operations of the Company require licenses and permits from various governmental authorities to exploit its properties, and the process for obtaining licenses and permits from governmental authorities often takes an extended period of time and is subject to numerous delays and uncertainties. Such licences and permits are subject to change in various circumstances. The Company may be unable to timely obtain or maintain in the future all necessary licenses and permits that may be required to explore and develop its properties, commence construction or operation of mining facilities and properties under exploration or development or to maintain continued operations that economically justify the cost.

C. Organizational Structure

     The following chart illustrates the principal subsidiaries of Campbell, together with the jurisdiction of incorporation of each company and the significant properties held by each company:

D. Property, Plants and Equipment

     Campbell Material Tangible Fixed Assets

     The following map of the Province of Québec shows the locations of the mines and principal exploration properties of the Company

     Location of the mines and principal exploration properties of Campbell Ressources inc.

     Properties of Meston

     The Joe Mann Mine

     History

     The Joe Mann property was acquired in July 1980 by Meston Lake Resources Inc. (“Meston Lake”), a predecessor of Meston, a wholly-owned subsidiary of Campbell. The original deposit was discovered in 1950. A three-compartment exploration shaft was sunk and some 859,000 tons of ore grading 0.176 oz/ton of gold had been mined and milled until June 1975 when rising costs coupled with poor recoveries prohibited further mining. Subsequently, Meston Lake acquired the mine and the shaft was dewatered in 1980 before financial problems put a halt to the operation.

     Campbell became involved in the Joe Mann property in 1983 when it acquired a minority position in Meston Lake and entered into a management agreement under which it designed and implemented an exploration program and aided in the financing of this program with the objective of determining the commercial viability of the project. The mine was dewatered in early 1985 and in June of that year, an underground exploration program began. The exploration program resulted in the discovery of 800,000 tons of ore reserves and prompted the decision to re-start production. Commercial production began on April 2, 1987. During 1987, Campbell also increased its ownership in the mine to 100%. The mine was in continuous operation from 1987 until November 1999. As part of an expansion plan in 1989, a new shaft, the No. 2 shaft, was sunk to a depth of 2,050 feet.

     During 1992, the No. 2 shaft was deepened to a depth of 2,676 feet. This deepening project opened up four new levels between the 1,825 and 2,350 levels. The deposit has been mined along a 3,000-foot strike. During 1997 and 1998, the No. 2 shaft was further deepened by 1,081 feet to a depth of 3,757 feet to permit six new levels to be mined. This project was completed in July 1998 at a cost of $13.1 million, approximately $1.4 million less than budgeted. The No. 2 production shaft is constructed to permit future deepening without interruption of production.

     During 1999, as production moved to the lower levels, operations were significantly affected by ground control problems and excessive dilution. Resulting higher cash operating costs compelled management to temporarily suspend development and mining operations to permit re-evaluation of the economic viability of the Joe Mann Mine and development of a new mine plan. Mining operations resumed in April 2000, under a new mine plan using the cut and fill mining method. While this mining method achieved improved ground conditions, it resulted in lower than expected productivity and prohibitively high operating costs. With the assistance of external consultants, efforts were made through mid-November to achieve profitable operating levels. In the month of October, production reached 5,000 ounces; however, the cash cost was US$330 per ounce. Given the low gold price and the operating problems, the decision was taken on November 10, 2000 to again temporarily suspend operations.

     In the period following this decision, mineral resources and reserves were reviewed and an exploration and development plan for the resumption of operations (the “2001 Plan”) was prepared. Management also considered various strategies to ensure that the future exploration and development requirements of the mine would be properly funded. The 2001 Plan was presented to the Board of Directors on March 14, 2001. The 2001 Plan concluded that current development was insufficient to permit the required production rates to be achieved and maintained and that a development and long-term exploration program was required to permit planning and development between the 2,350 and 3,400-foot levels. The 2001 Plan at the Joe Mann Mine commenced in November 2001. Progress on these programs enabled the Company to gradually resume mining operations in April 2002. Milling operations re-commenced in February 2002. The Joe Mann Mine has been in production until September 11, 2007, when the Company stopped the mining operations, since results from deep drilling programs were unsatisfactory to the Company.

     On September 20, 2007, Meston and Gold Bullion executed a memorandum of understanding regarding the acquisition of the Joe Mann Mine by Gold Bullion in consideration for: (i) $200,000 paid at the signing of the letter of intent; (ii) debentures in the amount of $5,100,000 with annual interest of 8% in the name of Meston secured by a first hypothec on immovables including the hoist and head frame, and stores; (iii) interest on debentures to be paid quaterly; (iv) redemption of debentures to be done in three (3) equal installments with the first payment of $1,700,000 eighteen (18) months from the date of the definitive agreement and the other payments to be made twelve (12) and twenty-four (24) months later; and (iv) a royalty of 4% of the net smelter returns on all production from the Joe Mann Mine to be paid to Meston. Meston would be re-imbursed by Gold Bullion the amount of $500,000 on deposit with the MRNF for restoration of the Joe Mann Mine. Gold Bullion will assume from the date of the definitive agreement, employee liabilities for employees retained by Gold Bullion and environmental liabilities. Campbell and Meston will have an option to buy the hoist and head frame at a price of $3,000,000 less amount owing to Meston at the time of the purchase, if the said hoist and head frame are no longer in use at the mine. A definitive agreement will be entered by the parties once regulatory authorities have approved the transaction. Expenditures incurred by Meston since September 16, 2007 will be assumed by Gold Bullion. However, as of March 31, 2008, Gold Bullion has not met its obligations under the memorandum of understanding and is in default.

     The Joe Mann Mine is currently held on a care and maintenance basis until the conclusion of the final agreement for the sale of the mine to Gold Bullion.

     Location, Access and Ownership

     The Joe Mann Mine is located approximately 40 miles south of Chibougamau, Québec, which is approximately 350 miles north of Montréal. The property consists of three mining concessions and one mining lease covering 106 hectares and 24 mining claims covering approximately 400 hectares. In addition, Meston holds 225 mining claims covering approximately 3,350 hectares outside of the Joe Mann Mine area. The property is accessed from Chibougamau by road. Highway 167 leads to the gravel mine access road, which is approximately 12 miles in length and is serviced by Meston.

     Geology

     The deposit represents a classic Archean vein-type deposit with gold-copper mineralization hosted by quartz veining within three laterally continuous shear systems. In the mine area, the rocks consist predominantly of mafic lavas intruded by gabbro sills and feldspar porphyry dykes. The intrusives appear to have been introduced along a prominent east-west break structure. The gabbro sills which are moderately magnetic are traceable over widths of 400 to 600 feet and for at least thirty miles along strike. Many late diabase dykes of varying thicknesses crosscut the sequence and strike northeast.

     Two principal veins account for almost 85% of the known mineral reserves and 90% of production contemplated by the 2001 Plan. The main vein (the “Main Vein”) is located north of the shaft and has an east-west strike length of approximately 3,000 feet with an 80-degree dip to the north. The Main Vein contains about 87% of the reserves. The south vein accounts for 13% of reserves and is located about 350 feet south of the Main Vein between the No. 1 shaft and the No. 2 production shaft. The south vein (the “South Vein”) has a strike length of about 3,000 feet in an east-west direction and a north dip and appears to weaken below the 2,750 level.

     Exploration on the 2,575 level, initiated in the fall of 1998, encountered positive results approximately 1,000 feet east of the shaft and led to the discovery of a new zone situated north of the Main Vein. At present, it is thought that the mineralization of the new ore zone is spatially and genetically related to a large quartz-feldspar porphyry dyke.

     There are two limbs of high-grade ore mineralization that occur at the northern and southern contacts between the porphyry dyke and a sheared gabbro. During 1999, definition drilling indicated an extension of a high grade zone in the hanging wall of the Main Zone between the 2,750 and 3,100 levels. Definition drilling is continuing between the 2,250 and 3,450 levels in order to outline additional mineral reserves and resources and confirm grade and potentially identify wider zones in this area.

     Mineral Reserves and Resources

     Mineral reserves at the Joe Mann Mine were reviewed extensively by management following the temporary suspension of mining operations in November 2000.

     The following table summarizes mineral reserves estimated and calculated by the Company at December 31, 2007 for the Joe Mann Mine on the basis of a gold price of US$800 per ounce, at December 31, 2006 on the basis of a gold price of US$575 per ounce and at December 31, 2005 on the basis of a gold price of US$425 per ounce. The mineral reserves and resources at December 31, 2007 were actualized by the Company from an audited report entitled Audit of the Mineral Resouces and Mineral Resources of the Joe Mann Mine dated July 21, 2006 by Systèmes Géostat International inc., independent geological and mining consultants.

		Mineral Reserves
		December 31, 2007								December 31, 2006								December 31, 2005
						Grade								Grade								Grade
		Tons				(oz./ton)				Tons				(oz./ton)				Tons				(oz./ton)
Proven			0				—				32,000				0.201				45,300				0.236
Probable			0				—				6,000				0.211				64,000				0.245
Total			0				—				38,000				0.203				109,300				0.241

Calculation method		Data bloc modelling
Cut off grade: 2007 (2006, 2005)		N/A oz Au/T (0.200, 0.225)
High-grade cut Au		2.0 oz
Dilution: 2007 (2006, 2005)		6 ft. min. horz. Width
Mill recovery (Au): 2007 (2006, 2005)		82.7%, (84.6%, 83%)
Price assumption (Au): 2007		US$800/oz
(2006, 2005)		(US$575/oz, US $425/oz)
Exchange rate CAN$/US$: 2007 (2006, 2005)		1.000, (0.893, 0.800)

     The total estimated proven and probable mineral reserves at the Joe Mann Mine decreased by 71,300 tons from 109,300 tons at December 31, 2005 to 38,000 tons at December 31, 2006. after taking into account production during 2006 of 80,639 tons grading 0.207 ounces of gold per ton, and the decrease of the cut off grade from 0.225 opt Au to 0.200 opt Au. Following the end of the operation in September 2007, mineral reserves were at nil tons as at December 31, 2007.

     Exploration activity at the Joe Mann Mine was gradually scaled down in 2004. The depth extension of the West Zone below the 2,900 level was deceiving and other targets tested which could have been accessible within the mine infrastructure did not return significant results considering that a cut off grade of 0.30 opt Au over 6 feet was required to be mined profitably.

     There was no underground exploration program during 2005 at the Joe Mann Mine. In 2006, considering the gold price, underground exploration and definition drilling should have resumed at the Joe Mann Mine in order to increase the actual reserves and resources. Due to depletion of reserves, the Company has decided to close the Joe Mann Mine in the course of the third quarter of 2007. Therefore, on December 31, 2007 no reserves and resources at the Joe Mann Mine were estimated.

     Mineral resources (measured and indicated resources)

     Mineral resources at the Joe Mann Mine were reviewed extensively by management following the temporary suspension of mining operations in November 2000.

     The following table summarizes mineral resources estimated and calculated by the Company at December 31, 2007 for the Joe Mann Mine on the basis of a gold price of US$800 per ounce, at December 31, 2006 on the basis of a gold price of US$575 per ounce and at December 31, 2005 on the basis of a gold price of US$425 per ounce. The mineral resources at December 31, 2007 were actualized by the Company from an audited report entitled Audit of the Mineral Resouces and Mineral Resources of the Joe Mann Mine dated July 21, 2006 by Systèmes Géostat International inc., independent geological and mining consultants.

Cautionary Note to U.S.Investors concerning estimates of Measured and Indicated Resources. This section uses the terms “measured resources” and “indicated resources.” We advise U.S. investors that these terms are not recognized by the SEC. The estimation of measured resources and indicated resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. U.S. investors are cautioned not to assume that mineral resources in these categories will be converted into reserves.

		Mineral Resources (excluding reserves)
		December 31, 2007								December 31, 2006								December 31, 2005
						Grade								Grade								Grade
		Tons				(oz/ton)				Tons				(oz/ton)				Tons				(oz./ton)
Measured			0				—				9,000				0.240				162,000				0.229
Indicated			0				—				142,000				0.239				264,000				0.288

Calculation method		Data bloc modelling
Cut off grade: 2007 (2006, 2005)		N/A oz Au/T (0.200, 0.225)
High-grade cut Au		2.0 oz
Dilution: 2007 (2006, 2005)		6 ft. min. horz. Width
Mill recovery (Au): 2007 (2006, 2005)		82.7%, (84.6%, 83%)
Price assumption (Au): 2007		US$800/oz
(2006, 2005)		(US$575/oz, US $425/oz)
Exchange rate CAN$/US$: 2007 (2006, 2005)		1.000, (0.893, 0.800)

     Mineral resources (inferred resources)

Cautionary Note to U.S.Investors concerning estimates of inferred resources. This section uses the terms “inferred resources.” We advise U.S. investors that these terms are not recognized by the SEC. The estimation

of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. U.S. investors are cautioned not to assume that estimates of inferred mineral resources exist, are economically minable, or will be upgraded into measured or indicated mineral resources.

Mineral Resources (excluding reserves)

December 31, 2007

December 31, 2006

December 31, 2005

Grade

Grade

Grade

Tons

(oz/ton)

Tons

(oz./ton)

Tons

(oz/ton)

Inferred

0

—

165,000

0.233

180,000

0.191

Calculation method		Data bloc modelling
Cut off grade: 2007 (2006, 2005)		N/A oz Au/T (0.200, 0.225)
High-grade cut Au		2.0 oz
Dilution: 2007 (2006, 2005)		6 ft. min. horz. Width
Mill recovery (Au): 2007 (2006, 2005)		82.7%, (84.6%, 83%)
Price assumption (Au): 2007		US$800/oz
(2006, 2005)		(US$575/oz, US $425/oz)
Exchange rate CAN$/US$: 2007 (2006, 2005)		1.000, (0.893, 0.80)

     Mining

     The production capacity of the No. 2 shaft system is estimated to be 2,000 tons per day assuming 12 hours of hoisting per day. Mucked ore is passed through a rock breaker then hoisted to the surface. All production and development ore is hoisted from the No. 2 production shaft to the surface. The equipment used in the mining operations was regularly maintained and kept in good working order during the temporary suspension of mining operations in 2001.

     The current operating plan calls for the use of a combination of long hole and a limited number of cut and fill and shrinkage stopes. In 2003, the long hole method, comprise approximately 65%, was used in the Main and North Zones with three sub levels that would limit hole lengths to 15 to 18 metres and control the size of work site openings. In 2003, development ore represented approximately 21% of production. This approach provides better ground conditions and thereby control dilution. In the South Vein where ground conditions are more difficult, the cut and fill method is used for approximately 12% of the mining.

     Until mid-1999, mining was predominantly carried out using the shrinkage stope mining method. With the change in mining method in 2000, 45.4% of mining was from cut and fill stopes, 25.5% from long hole stopes and 28.4% from development muck. In 2003 and 2004, mining at Joe Mann was essentially carried out using the long hole mining method.

     The following table sets out production from the Joe Mann Mine for the past three years:

Joe Mann Mine Production Summary Year ended December 31		2007 (2)				2006				2005
Tons Milled			67,292				80,639				139,064
Gold Grade (oz./ton)			0.181				0.207				0.254
Copper Grade (%)			0.22				0.29				0.34
Gold Produced (ounces)			10,092				14,146				29,434
Copper Produced (000’s lbs.)			281				440				897
Cash Operating Costs(1) (US$  per oz. of gold)			794				818				427

     Milling

     Ore from the Joe Mann Mine was transported approximately 40 miles by truck to Campbell’s Copper Rand Mill for processing. The Copper Rand Mill was commissioned in 1959 and is regularly maintained and is in good working order. During 2007, the gold recovery rate at the Copper Rand mill, which processed ore from the Joe Mann Mine and the Copper Rand Mine, was 82.71% compared to 84.74% in 2006 and 83.24% in 2005 and the copper recovery rate 94.16% compared to 95.59% in 2006 and 94.45% in 2005. The mill process includes two separate circuits: a gravity circuit and a flotation circuit. Original design capacity at the Copper Rand Mill was 3,000 tons per day as a flotation mill. Gold recovered from the gravity circuits is formed into doré bars on site and is shipped to the Royal Canadian Mint for refining. The flotation circuit uses standard technology to produce a copper-gold concentrate. Before January 2005, the ore from the Joe Mann Mine was transported and processed to the Campbell Merrill mill. This change was done in order to optimize physical and human resources. Since the Copper Rand Mill does not have a cyanide circuit, the gold recovery was lower. However, this loss was positively compensated by the reduction of milling cost by processing at the Copper Rand Mill.

     Employees

     At the Joe Mann Mine, before the Company decided to close the mine on September 11, 2007, there were 64 persons that were employed, compared to 65 persons as of December 2006 and 114 persons as of December 31, 2005. Of the 64 employees, 52 mine workers are covered by a collective bargaining agreement with CSN and one nurse was covered by a collective bargaining agreement with La Fédération des Infirmiers et Infirmières du Québec (“FIIQ”). During the last three financial years, there were no material strikes or walkouts at the Joe Mann Mine.

     The collective agreement at the Joe Mann Mine was renewed on June 1, 2005 and would normally terminate on December 31, 2010. Gold Bullion will assume from the date of a definitive agreement regarding the sale of the Joe Mann Mine employee liabilities for employees retained by Gold Bullion.

     Royalties

     In May 1993, Meston sold a graduated royalty on the net smelter returns to Repadre Capital Corporation (“Repadre”), a subsidiary of Dundee Bancorp Inc., for $3 million in cash. The royalty, based on production from the Joe Mann Mine, is 1.8% at gold prices up to $512 per ounce increasing to 3.6% at gold prices of $625 per ounce and greater. A 2% royalty is also payable on copper production in excess of 5 million pounds per year and silver production in excess of one million ounces per year. On June 30, 2001, Campbell issued 800,000 common shares to Repadre pursuant to the merger in exchange for the reduction of this royalty to 1.5% at a gold price of US$325, 1.75% at a gold price of US$350 and 2% at a gold price of US$375 or higher. This amended royalty is payable up to a maximum of $500,000, after payment of which, the royalty will reduce to 1% payable thereafter so long as the gold price is at least US$350. Royalty payments were again triggered commencing in December 2002. No royalty was paid in 2002. For the years ended December 31, 2005, 2006 and 2007, $147,531, $84,521 and $70,670 respectively were paid to Repadre under this agreement. From May 1993 to the end of 2007, an aggregate of approximately $5,027,000 was paid pursuant to this royalty.

     During the 2001 and 2002 fiscal years, the Company completed a three-tranche $32,400,000 royalty financing on future production from the Joe Mann Mine for cash receipts of $1.7 million and notes receivable totalling $26.1 million. During the first quarter of 2003, with the decision not to bring the Corner Bay Property into production, Campbell re-purchased the royalty units in Corner Bay and sold additional units in the Joe Mann Mine. Following this transaction, 4,740 royalty units in the Joe Mann Mine, the maximum number of units contemplated by the financing, were issued and outstanding

     The royalty was paid to the unit holders based on the following formula: the fraction of outstanding royalty units over 4,740 units multiplied by $8 per ton of ore for the years 2002 and 2003, $14 for 2004, $35 from January 1, 2005 until the net proceeds of the royalty sale, plus interest of 10% compounded annually, exceed the aggregate of all royalty payments, from the date paid to the date of determination, at 10% compounded annually and $1.50 per ton thereafter.

     The unitholders had the right to require the Company to retract the royalty on or at any time after May 1, 2004 at the fair market value of the royalty unit. In 2005, the unitholders exercised their right and the Company repurchased the deferred royalty for a total lump sum of $5,900,000. This deferred royalty amounted to $24,908,000 at the time of the repurchase and the Company therefore recorded a gain of $19,008,000. However, given the uncertainty regarding the collection of the notes receivable from the unitholders, the Company has recorded an allowance for doubtful account equal to the remaining portion of the amount, which stood at $17,437,000 at the repurchase date. The net impact resulting from the repurchase of the deferred royalty aggregates $1,571,000 and was included in other income in 2005. The Company submitted on June 22, 2007 a notice of arbitration to the unitholders in order to recover the entire amount. Parallel proceedings were brought by the security agent for the unitholders, Promittere Asset Management Limited (“Promittere”), in front of the Ontario Superior Court of Justice in which Promittere requests that the court declare the unitholders and Promittere still holders of the royalty units, that the promissory notes given as the purchase price for the royalty units are not due, damages in the amount of $30,000,000 for breach of the royalty agreement or alternatively for unjust enrichment and a stay of the arbitration proceedings initiated by the Company. They alleged in the proceedings that Meston breached the royalty agreement by initiating proceedings under the CCAA and that since the acceleration of the promissory notes was a direct result of that default, these notes should not be considered as having been accelerated. The outcome of these proceedings and claims are subject to future resolution, including the uncertainties of litigation. The Company believes that the claims brought by Promittere are without merit and intends to defent them vigorously.

     Meston will continue to assume the foregoing royalties upon sale of the Joe Mann Mine to Gold Bullion, but will receive from Gold Bullion a royalty of 4% of the net smelter returns on all production from the Joe Mann Mine if the sale is completed.

     Environmental Matters

     The rehabilitation and restoration plans for the Joe Mann Mine site were approved in early 2000 and an amount of $350,000 was deposited as at December 31, 2005. The plan for the Campbell Mill site is currently under review. The appropriate method of re-mediating acid spots, which have appeared on 50 hectares of previously re-vegetated tailings is currently being reviewed. Two alternate methods are being considered which involve costs ranging from $10,000 to $30,000 per hectare. Campbell currently estimates that the maximum financial guarantee will be approximately $3,872,000 for the Campbell Mill. An amount of $808,000 was deposited as at December 31, 2007 for the purposes thereof. Pursuant to the memorandum of understanding, Meston will be re-imbursed by Gold Bullion the amount of $500,000 on deposit with the MRNF for restoration of the Joe Mann Mine. The asset retirement obligations total $4,249,000 for the Joe Mann Mine and the Campbell Mill sites as at December 31, 2007.

     Upon sale of the Joe Mann Mine, Gold Bullion will assume all environmental liabilities.

     Mineral Exploration Properties

     Chibougamau Exploration Properties

     Meston owns extensive exploration properties in the Chibougamau area, including mining claims and several former producing mines. These former producing mines include the S-3, Lac Chib, Kokko Creek, Québec Chibougamau and the Main Mine.

     In June 1992, Meston entered into two agreements with SOQUEM under which SOQUEM could expend up to $7 million towards exploration programs on the Meston and Chibougamau properties. During 1995, these agreements were amended to extend their term and increase the expenditures. In July 1997, these agreements were further amended to provide that, SOQUEM can earn a 50% interest in the Meston property which comprises 147 claims and one mining concession (and excludes the Joe Mann Mine), in exchange for spending $1.6 million in the five-year period ending June 1, 2002 and a 50% interest in the Chibougamau properties, which comprises 201 claims and one mining concession, by spending $750,000 in the five-year period ending June 1, 2002.

     During 1997, four claims located northwest of the Joe Mann Mine were added to the Meston property agreement, excluding the lateral and at depth extension of the Main Vein of the Joe Mann Mine protected by a 500 foot-wide corridor north of the Main Vein. A separate third agreement was also entered into with SOQUEM covering four claims and one mining concession located northeast of the Joe Mann Mine, excluding the lateral and at depth extension of the Main Vein of the Joe Mann Mine protected by a 500 foot-wide corridor north of the Main Vein, pursuant to which SOQUEM can earn a royalty of 3.5% of the net smelter returns by expending $400,000 over the five-year period ending June 1, 2002. Meston had the right to repurchase the net smelter return royalty, if earned, for $1,000,000 on or before June 1, 2007 but did not exercise that right. Amounts expended under this agreement shall also be credited against the spending requirements under the Meston property agreement. As additional consideration for the 1997 amendments, SOQUEM agreed to fund $100,000 of underground drilling on a north zone of the Joe Mann Mine. This amount was credited to the $1.6 million of required expenditures on the Meston property.

     Should SOQUEM not spend the amounts set out above, SOQUEM will earn no interest in the properties. Meston has retained the right of first refusal to treat any ore produced from these properties at its Campbell Mill. If either party fails to fund its pro rata share of expenditures once SOQUEM has earned its 50% interest, the defaulting party will have its interest diluted. If either party’s interest is diluted to 15% or less, such party’s interest will be automatically converted into a royalty of 3% of the net smelter returns.

     From the inception of the program in 1992 to December 31, 1997, SOQUEM had spent approximately $2,548,000 on the Meston property and $2,431,000 on the Chibougamau properties. To December 31, 2000, SOQUEM had incurred additional expenditures under the amendments of $200,000 on the Meston properties and $220,000 on the Chibougamau properties since the effective date of the 1997 amendments. Campbell is not responsible for sharing expenditures with respect to the referenced properties.

     During 2000, SOQUEM carried out exploration work totalling $75,000 on the Chibougamau properties. On the Meston property, only yearly claim renewal costs of $3000 were incurred in 2001, 2002 and 2003. No exploration work was carried out by SOQUEM in 2001 and 2002.

     In 2002, a further amending agreement was entered into between SOQUEM and Meston under which SOQUEM earned a 35% interest in the Meston property and a 40% interest in the Chibougamau property. Meston is now the operator and manager.

     These undivided interests are based on the completed qualifying expenditures versus the total expenditure amount SOQUEM had to incur to earn its 50% interest.

     In 2004, $562,000 was spent, 65% of which was spent by Meston and 35% by SOQUEM, in accordance with their respective interest, in diamond drilling and ground geophysics surveys on Meston property.

     In 2005, $257,500 was spent by Meston (which still owned a 65% interest) in diamond drilling on the Meston property. SOQUEM (which then owned a 35% interest) has not participated in the exploration program in 2005. SOQUEM’s interest has therefore been reduced accordingly to 34% and Meston’s interest increased to 66%.

     In 2006 and 2007, no exploration activity was reported by Meston or SOQUEM.

     Properties of MSV

     The Company’s wholly-owned subsidiary, MSV, is principally involved in the production and development of copper and gold deposits in the Chibougamau region and along the Eastmain river in north western Québec. MSV’s assets are comprised of the Copper Rand Mine, the Cedar Bay gold-copper mine (the “Cedar Bay Property”) which is located 1 km of the Copper Rand facilities and the Copper Rand Mill of a capacity of 3,000 ton-per-day concentrator.

     The Copper Rand Mine

     Location and Title

     The Copper Rand Mine, as well as the Copper Rand Mill are located in the McKenzie Township, Province of Québec on the shores of Chibougamau Lake. It is approximately 7 kilometres east of the town of Chibougamau and is easily accessible from Route 167 and a paved secondary road. The property includes the Copper Rand Mine and the former producer Cedar Bay mine. The property, is composed of six mining

concessions and one mining lease covering an area of 449 hectares. Surrounding that block, MSV is controlling 100% of 185 mining claims and 12 mining concessions covering an area of 4,839 hectares in the McKenzie, Roy and Obalski Townships, in the Ungava electoral district.

     History

     Initial exploration was first carried out on the Copper Rand Mine in 1910 when trenching work revealed erratic copper showings. In 1948, Grand-Chibougamau Mines Ltd. drilled a shear zone under the lake. In 1950, Royrand Fields Ltd. acquired the properties and in 1952, when copper prices increased, development was begun by New Royrand Copper Rand Chibougamau Mines Ltd. in conjunction with Patino Canada Ltd., a subsidiary of Patino N.V. of the Netherlands.

     Production commenced in 1959 and in 1981, Northgate Exploration Ltd. acquired the Copper Rand and Portage mines, as well as other neighbouring mines and properties. In 1987, Westminer acquired the mines from Northgate Exploration Ltd. and operated them until November 1992 when the mines were placed on care and maintenance. In February 1993, MSV Resources Inc. became a producing copper and gold company through the acquisition of the Copper Rand and Portage mines from Westminer. The mines were re-opened in March 1993 and an extensive exploration program was carried out. Only the Copper Rand Mine still hosts mineral resources. In 2007, the assets of MSV Resources Inc. and all of its contracts were transferred to MSV as part of a reorganisation of some of Campbell’s subsidiaries.

     Copper Rand 5000 Project Background

     On December 4, 2000, MSV Resources Inc. entered into a number of agreements with the Partners for the realization of the Copper Rand Project. The agreements provided for the investment by the Partners and MSV Resources Inc. in shares of CCR, the reimbursement of the advances made by the Partners, the transfer by MSV Resources Inc. to CCR of the operating assets of the Copper Rand Project, MSV Resources Inc.’s management of the Copper Rand Project and the conditions relating to the closing of the Copper Rand Project financing. Final Copper Rand Project financing agreements were signed on March 8 and on March 15, 2001.

     In December 2004, Campbell, through MSV Resources Inc., acquired the remaining 24% interest in CCR equally held by the Partners by the issuance of 5,853,660 common shares of the Company as consideration for the 60,000 common shares of CCR held by the Partners.

     Financing of the Copper Rand Project and Details of the Management of the Copper Rand Project

     MSV Resources Inc. transferred the operating assets for the Copper Rand Project to CCR, and MSV Resources Inc. and its Partners then held shares of CCR. The Copper Rand Project as finally approved included: i) the transfer of assets valued at $10,000,000 in return for a 16% interest in CCR, (ii) the possible issuance of unsecured 8% convertible debentures by MSV Resources Inc. for a maximum of $15,000,000, (iii) the possible issuance of shares of MSV Resources Inc., exchangeable into up to 21,512,195 common shares of Campbell in consideration of the exchange of interests held by the Partners in CCR, (iv) the possible issuance of 2,439,025 common shares of Campbell to Investissement Québec and (v) the set-up of a guarantee by MSV Resources Inc. in favour of Investissement Québec. All common shares were to be issued at a minimum price of $1.025 per share and convertible debentures had a conversion price of $1.025 per share. In July 2001, in accordance with the terms of their initial investment, SOQUEM and SDBJ exchanged part of their interest in CCR into convertible debentures of MSV Resources Inc. increasing MSV Resources Inc.’s interest in CCR to 26%. MSV Resources Inc. issued an aggregate of $2.5 million of debentures bearing

interest at a base rate of 8% annually escalating based on metal prices and CCR’s production levels. The debentures were convertible into Campbell common shares at a conversion price of $1.025 per share.

     In 2001, Investissement Québec provided to CCR a loan and credit facility to fund the Copper Rand Project up to a maximum of $22 million, of which $5.5 million had been drawn at December 31, 2005. The loan provides that interest payment commences in June 2005 and repayment commences in June 2005 (in 16 quarterly payments). Under the loan and credit facility agreement, CCR has granted to Investissement Québec a five-year option to acquire up to 25,000 shares of CCR at a price of $100 per share for an aggregate amount of $2,500,000. The shares issued to Investissement Québec upon exercise of the option are to be immediately converted into MSV Resources Inc. common shares at a conversion price of $0.25 per MSV Resources Inc. share resulting in the issuance of 10,000,000 additional MSV Resources Inc. shares and thereby increasing MSV Resources Inc.’s interest in CCR proportionally to the number of shares so converted. The facility is secured by a charge on the assets of CCR excluding inventory and receivables. As promoter and manager of the Copper Rand Project, MSV Resources Inc. has guaranteed the Investissement Québec loan.

     In 2001, CCR received a subsidy of $840,000 from the MRNF of which $378,000 was refunded in 2006. CCR was also eligible to receive $1,200,000 from the Centre local d’emploi (Québec) in training grants.

     The initial project consisted of two phases. Phase I included the deepening of the shaft to a depth of 4,150 feet and the access to the ore via a 3,900-foot decline from level 3,970 to the 4,550 level. The total cost of phase I was estimated at $39,000,000. Phase II included the continuation of the decline to access the 5,000 level. The cost of phase II was estimated at $7,000,000 and was to be financed from operating flows.

     In early 2002, the project was modified to eliminate most of the second phase by deepening the shaft by an additional 170 feet, eliminating most of the cost of the second phase. As of December 31, 2002, the deepening of the shaft and development of the 4,150 level have been completed. Work on the 3,800-foot decline has been completed in March 2004. The ventilation raise, work on installing the conveyor and pre-production development are completed. Due to the delay in commencement of production, additional financing has been required. The increase is primarily due to the following factors; the additional 170-foot deepening of the main shaft, unplanned underground rehabilitation work, rehabilitation work on the mill required due to the inactivity since the 1997 shutdown, major mechanical repairs to the hoist, additional 2,100 feet of raise for improving ventilation and emergency exit, required training programs, the delays due to a lower than forecast rate of mine development, and the impact of fixed costs during the delay in commencement of production.

     The bringing on stream of production of the Copper Rand Mine, expected in the first half of 2004, has been delayed due to the suspension of the project in June 2003 while awaiting the financial reorganization of CCR.

     In the context of this reorganization, on October 1, 2003, Campbell acquired control of CCR by increasing its interest from 26% to 76% through the issuance of 12,195,120 Campbell common shares. The value of the net assets acquired was $11,302,000. Campbell’s financial statements reflect the financial situation and results of operations of the new subsidiary since that date. CCR was the owner of the Copper Rand and Cedar Bay mines and the Copper Rand Mill, which has a capacity of 3,000 tons per day, situated in the Chibougamau mining camp of Québec. In order to obtain the required project approval on this reorganization from Investissement Québec and to gain access to $5,500,000 of the originally approved $22,000,000 line of credit, Campbell reimbursed a portion of the guaranteed debt through the issue of 10,458,894 common shares in the amount of $8,157,701 and committed to invest $7,000,000 in operating

funds for exploration and other activities. In addition, Campbell granted Investissement Québec the option to convert part or all of its debt into the Company’s common shares as of October 1, 2004 based on market prices at that time. According to this agreement, Campbell is required to invest amounts necessary to bring the mine on stream in order to access the remaining portion of the credit facility.

     Since March 2001, the development at the Copper Rand Mine has been focused on accessing the copper and gold resources between levels 4,030 and 5,000. Commercial production started in the first half of 2005 with annual production projected to be in excess of 29,000 ounces of gold and 15,000,000 pounds of copper. During the 2005 fiscal year, capital expenditures and exploration costs totalled $2,620,000, ($26,482,000 in 2004 and $10,422,000 in 2003). In 2005, in light of the situation at the Copper Rand Mine, the Company revalued the property. Higher costs and accumulated delays in development led to a $16,702,000 property write-down in 2005 and an additional $23,748,000 write down in 2006.

     On February 22, 2007, the Company announced a temporary suspension of the mining activities at its Copper Rand Mine as a result of a rock fall and observations of ground movements in the area. Following a more complete assessment of the ground conditions at the Copper Rand Mine, the Company had initiated the development of a 1,400-foot long ramp between levels 4,690 and 4,510 to eliminate the utilization of the existing ramp between the two levels. The cost of the new ramp will be offset by a substantial reduction in the amount of rehabilitation work required and will enhance the safety of employees. This decision allows limited production until June. Nuinsco is presently working with the Company to put in place a bridge loan to support the operations during the rehabilitation and the development of the new ramp.

     Other Aspects of the Copper Rand Project

     MSV is the operator of the Copper Rand Project.

     Geology

     The Copper Rand Mine is part of the Lac Doré complex, a stratified complex of intrusive origins, composed principally of meta-anorthosites and metagabbros. The prevailing meta-anorthosite rock is composed mostly (70 to 90%) of plagioclase rock which has been heavily altered to form zoïsites, clinozoïsites and epidotes. Frequent albitisation is observed. The plagioclase rock floats in a matrix of quartz, carbonate, sericite and chlorite rock. Sulfides are seldom found.

     The meta-anorthosites are inlaid with deformation corridors through which hydrothermal solutions travelled. The circulation of these hydrothermal solutions altered the rock and sericite and chlorite schists resulted when tectonic movements occurred. The mineralization is found precisely within these alteration corridors. The schists are generally composed of sericites, chlorites, carbonates and quartz.

     The mineralization within the alteration corridors usually takes the form of sulfide lenses (generally 10 to 30%) composed principally of pyrite and chalcopyrite with occasional (1 to 5%) pyrrhotite and small quantities of sphalerite and galena. The ore gangue (70 to 90%) is composed essentially of chlorite, quartz and carbonates. The relative distribution of these three components of the gangue varies, although generally carbonates represent 15 to 20% of the gangue on average.

     Mineral Reserves

     The following table summarizes mineral reserves estimated and calculated by the Company at December 31, 2007 for the Copper Rand Mine.

		Tons (short)				Cu (%)				Au (opt)
Reserves
Proven			407,000				1.92				0.070
Probable			840,000				1.55				0.093
Total reserves			1,247,000				1.67				0.085

     Mineral Resources

     The following table summarizes mineral resources estimated and calculated by the Company at December 31, 2007 for the Copper Rand Mine.

Cautionary Note to U.S.Investors concerning estimates of Measured and Indicated Resources. This section uses the terms “measured resources” and “indicated resources.” We advise U.S. investors that these terms are not recognized by the SEC. The estimation of measured resources and indicated resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. U.S. investors are cautioned not to assume that mineral resources in these categories will be converted into reserves.

		Tons (short)				Cu (%)				Au (opt)
Resources
Measured			104,000				1.23				0.061
Indicated			591,000				1.39				0.087
Total resources			695,000				1.37				0.083

     Inferred Resources

Cautionary Note to U.S.Investors concerning estimates of inferred resources. This section uses the terms “inferred resources.” We advise U.S. investors that these terms are not recognized by the SEC. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. U.S. investors are cautioned not to assume that estimates of

inferred mineral resources exist, are economically minable, or will be upgraded into measured or indicated mineral resources.

Tons (short)

Cu (%)

Au (opt)

Resources

Inferred

459,000

1.89

0.081

     Mining

     For the Copper Rand Project, the sublevel open stoping with paste backfill mining method has been selected. The mineralized zone is divided into stopes that will be mined alternately with a backfill cycle. The spacing between sublevels is 80 feet from floor to floor, which is supported by a rock mechanics study from Golder Associates. Alternating stopes are opened over a horizontal distance of 60 feet. Production takes place on each sublevel. The sublevels are accessed by secondary ramps that start at level 4,730 and end at levels 4,030 and 5,030.

     The mining method is mechanized, which minimizes the personnel required for the operation. Hydraulic drills are presently used. The 3” diameter holes are drilled downward. The flexibility of the drills allows the stope openings to be limited to between 7 and 8 feet. The access and mucking drifts are located in the footwall of the deposit.

     In order to reduce the development in waste and to reduce mining costs, the Company has entered into an agreement dated December 22, 2006 as amended on January 5, 2007 with Manroc Developments Inc. (“Manroc”) to initiate Alimak Mining methods for some blocks of ore.

     In 2007, following ground stability problems encountered in February 2007, the Company has modified it’s development approach and the ground support patern with positive results to date. The paste fill plant was commissioned by mid year and all old mine working of CR-5000 were filled, which has contributed to stabilize the surrounding ground. During the second half of 2007, the Company has initiated additional development in order to diversify the source of ore coming from the mine. The development towards the 5000 level has been initiated, as well as the excavation of an internal ore pass to connect with upper levels 4030 and 3950.

     The Copper Rand Mill

     The Copper Rand Mill is housed in a 5,180 square metre building, which includes crushing and milling equipment, a control room and concentrate storage facilities. Ore at the Copper Rand Mill is stored in three ore bins with a capacity of 1,600 tons.

     Milling

     The Copper Rand concentrator has a rated capacity of 3,000 tons per day. The mill process includes two separate circuits: a flotation circuit and a gravity circuit. Gold recovered from the gravity circuit is melted on site and the doré bars are shipped directly to the Royal Canadian Mint for refining. The flotation circuit uses standard technology to produce a copper-gold concentrate.

     Environmental Fund

     Campbell, through its subsidiary MSV Restoration Inc., benefits from an environmental fund (the “Environmental Fund”) of approximately $4.3 million as at December 31, 2007 ($4.4 million in 2006 and $4,1million in 2005) of which $1,185,000 is currently held in trust by the MRNF and of which the remaining $3,115,000 is currently held in a trust account managed by the Trustee. The Trustee had deposited with the MRNF the $1,185,000 financial guarantee in respect of the rehabilitation plan of the Company which was approved by the Québec mining authorities. The Environmental Fund was set aside for the restoration of the Copper Rand, Portage, Jaculet and Copper Cliff mining sites when the properties were acquired from Westminer in 1993. The asset retirement obligations for the Company regarding the Copper Rand, Portage, Jaculet and Copper Cliff sites total $3,028,000 as at December 31, 2007. In the event there is a shortage of funds required to do the rehabilitation and restoration work, the shortfall will be assumed equally between the Company and SDBJ.

     Tailings and Waste Disposal

     Tailings are disposed of in MSV’s tailings pond which meets all environmental requirements. The current disposal site has been used since 1974 exclusively for tailings generated from the Copper Rand, Portage and Eastmain mines. Tailing disposal sites have been extensively examined and tested during the course of the preparation of MSV Resources Inc.’s application for operating permits filed with the MDDEP and are regularly tested in accordance with existing environmental standards. Tailing disposal sites meet all existing environmental requirements and standards. Waste rock from the Copper Rand Mine that cannot be dumped underground is hoisted to the surface and stored in a 240 ton bin adjacent to No. 4 shaft before being transferred to a waste dump located south of the shaft. The effluent for the tailings pond is tested in accordance with the existing standards with Québec environmental authorities

     Employees

     As of December 31, 2007, MSV had approximately 156 full time employees at the Copper Rand Mine compared to 117 on December 31, 2006 (then owned by MSV Resources Inc.) and 72 on December 31, 2005 (then owned by MSV Resources Inc.) and 332 at the end of 1996 (then owned by MSV Resources Inc.) prior to the suspension of operations, as previously described. At the Copper Rand Mine, 114 (86 in 2006) employees were covered by a collective bargaining agreement with the United Steelworkers of America. The collective agreement, renewed on May 1, 2004 for a period of five years, will end on April 30, 2009.

     Royalties

     As part of the consideration for acquiring the mines from Westminer, MSV Resources Inc. agreed to pay Westminster a royalty of $0.375 per ton of ore milled at the Copper Rand Mill commencing on February 26, 1995. This royalty may be repurchased at any time after February 26, 1998 for $750,000.

     In addition, SDBJ is entitled to a royalty of $0.250 per ton of ore milled at the Copper Rand Mill during the first two years following the acquisition. This royalty increases to $0.375 per ton of ore milled

thereafter. Finally, SDBJ is entitled to a royalty premium of $0.250 per ton of ore milled if the net smelter return per ton of ore produced at the Copper Rand Mill exceeds a base amount of $70 a ton. The base amount of $70 per ton is to be indexed quarterly based upon the Consumer Price Index published by Statistics Canada, 1993 being the base year. The SDBJ royalty is payable monthly. This royalty may also be repurchased at any time for $750,000.

     The Corner Bay Property

     Location and Title

     The Corner Bay Property, located in the Townships of Lemoine and Obalski, in Québec, is located approximately 55 km south of the City of Chibougamau. Easily accessible by road, the property is composed of 16 contiguous claims covering an area of 256 hectares.

     History

     From its discovery in 1956 until 1972, eight drilling programs totalling 1,463 metres and various geophysical and electromagnetic surveys were conducted on the property. In 1972, drilling by Rio Tinto PLC and Flanagan McAdam Resources Inc., led to the discovery of Zones A, B, C and D in the Inner Block. Between 1979 and 1981, Corner Bay Minerals Inc. (“Corner Bay”) carried out a drilling program consisting of 22 holes for a total of 2,488 metres. In addition, the drilling on a geophysical anomaly 500 metres long led to the discovery of the Zone Ouest.

     In 1982, Riocanex Inc. (“Riocanex”) discovered the Main Zone, located less than 500 metres from the Zone Ouest. Toward the end of 1984, Riocanex drilled 38 holes totalling 14,470 metres on these two zones. Preussag Canada continued work on the Zone Ouest and Main Zone between 1984 and 1986 by drilling and conducting geophysical surveys.

     In July of 1992, SOQUEM and Corner Bay entered into an agreement whereby SOQUEM could acquire a 30% interest in the Inner Block by incurring $1.2 million in exploration work. Under the terms of the agreement, SOQUEM could also earn an additional 20% interest by carrying out a second phase of work which would also cost $1.2 million. SOQUEM earned its 30% interest by carrying out three drilling programs in 1992 and 1993. Thirty-four holes were drilled for a total of 13,583 metres on the Main Zone to evaluate its continuity and confirm the tonnage and grade of the deposit. Also during this period, SOQUEM conducted geophysical surveys and drilling to test certain geophysical abnormalities inside the Inner Block. In 1993, SOQUEM carried out a third drilling program totalling 8,897 metres over 18 holes.

     In October 1994, MSV Resources Inc. and Cache Explorations Inc. (“Cache”) jointly acquired the Corner Bay Property from Corner Bay and SOQUEM in consideration of the payment of certain royalties. In order to earn this interest, MSV Resources Inc. undertook to invest $8 million to bring the deposit into production, to provide technical support and to mill the ore at cost. In October 1995, MSV Resources Inc. acquired the remaining 45% interest when it merged with Cache. In December 1997, MSV Resources Inc. renegotiated an agreement with Corner Bay and SOQUEM modifying the earlier agreement of October 14, 1994 regarding the acquisition of the Corner Bay Property. Under the new agreement, MSV Resources Inc. acquired the property for a total consideration of $1,560,500, part of which was payable in cash with the balance payable in common shares. These obligations of MSV Resources Inc. were discharged in 2001 as part of MSV Resources Inc.’s proposal to creditors discussed above. As additional continuing consideration, MSV Resources Inc. was to pay a royalty of 2% of the net smelter returns. The obligation is now assumed by MSV.

     MSV Resources Inc. had planned to begin developing the Corner Bay Property in the second half of 1996 by driving a ramp from surface to a final depth of 340 metres. Because of a drop in copper prices at the end of the first half of 1996, management postponed this development.

     In accordance with Systèmes Géostat International Inc.’s technical report entitled Corner Bay deposit, Audit of Mineral Resources dated July 12, 2006, the Company has initiated during the fall of 2006, the installation of some surface facilities.

          The Company entered into a letter agreement dated April 18, 2006 (the “Nuinsco Letter Agreement”) with Nuinsco whereby Nuinsco agreed to (i) provide interim and ongoing consulting services respecting the operations of the Company’s mines, (ii) assist the Company in obtaining funding for the development of the Copper Rand Mine to a minimum of $5 million, (iii) subscribe for $2.5 million of units (the “Nuinsco Placement”) under the conditions of the Nuinsco Placement including (a) that the number of common shares in the share capital of Campbell comprising part of the Nuinsco Placement shall represent 10% of the number of outstanding common shares calculated on a fully diluted basis after giving effect to the Brokered Placement (as defined hereinafter) and the Rights Offering (as defined hereinafter) and (b) that the Company shall have completed the Brokered Placement (as defined hereinafter) and the Rights Offering (as defined hereinafter) and (iv) obtain a non-recourse project loan (the “Corner Bay Loan”) in an amount up to a maximum of $4,000,000 and/or other financing sufficient to develop and bring into commercial production a mine above the 250 metre level at the Company’s Corner Bay Property in accordance with a feasibility study to be prepared by Nuinsco at the Company’s cost, subject to the approval of the Company’s board of directors. Upon the execution of a definitive agreement with a lender respecting the Corner Bay Loan or prior to commencement of the development of the Corner Bay deposit, whichever occurs first, the Company agreed to transfer to Nuinsco, for no cost, an undivided 50% interest in all of the Corner Bay property, free and clear of all liens, encumbrances, royalties and other interests whatsoever (other than a royalty of 2% of the net smelter returns payable in respect of sales exceeding 750,000 tons of ore and the encumbrances created pursuant to the Corner Bay Loan.

     On April 23, 2007, the Company closed a $7 million private placement equity financing allowing Nuinsco to complete its earn-in of the 50% carried interest and is entitled to 50% of the operating cash flow generated by Corner Bay, in the following manner: 100% of operating cash flow has been retained by Campbell until it recouped capital expenditures incurred on or after December 31, 2006 to develop Corner Bay and subsequently, 50% of operating cash flow is retained by Campbell to repay historical capital expenditures of approximately $4.1 million, with the remaining 50% of cash flow distributed equally to Nuinsco and Campbell, in accordance with a Participation Agreement signed between MSV and Nuinsco on July 23, 2007. Thereafter, operating cash flow will be distributed to Nuinsco and Campbell on a 50:50 basis. It is expected that operating cash flow will be available for distribution to Nuinsco before the end of 2008.

     The production was expected to begin in December 2007, but was temporarily delayed upon encounter with groundwater. The issue was successfully addressed in February 2008 and development in ore has begun in March 2008.

     Geology

     The Corner Bay Property is situated within the anorthostic zone of the Lac Doré complex. Although a few mineralized zones have been intersected outside the known Main Zone, this zone is presently considered to be the only potential copper deposit. The Main Zone shows a strike bearing more or less continuously at N 10°W. To the north, it is intersected by a gabbroic dyke while to the south, the zone is limited by the presence of a deformation corridor striking NE-SW. The thickness of the shear zone is variable from 2 to 25

metres, and its abrupt dip is 80-85° to the west. Furthermore, it shows a lateral extension of more than 700 metres and its depth has been confirmed by drilling down to the 600 meter level.

     The deposit is characterized by the presence of a sericitization halo of varying thickness from l cm to l meter, located on either side of the main structure. Parallel to this structure, there is a diffused network of veins/veinlets of quartz, chalcopyrite and pyrite which fill the fine fractures. The principal alterations found in the shear zone are those of choloritizaton, sericitization, silification and, to a lesser degree, cabonatization (calcite). The mineralization (massive to semi-massive sulphides) consists of pyrite and chalcopyrite and is associated with quartz veins more or less parallel to the shearing. On either side of these mineralized lenses, the percentage of disseminated sulphides gradually diminishes. Also, many of those massive to semi-massive veins are cut by a second generation of hematized quartz veins that contain only disseminated to semi-massive sulphides. These two types of veins can be systematically observed on the overall mineralized sections in proportions that are variable. Associated with the copper, small quantities of gold and silver are present.

     Mineral Resources

     The following table summarizes mineral reserves and resources estimated by the Company as at July 2006 and audited by Systèmes Géostat International inc, independent geological and mining consultants in their technical report entitled Corner Bay Deposit, Audit of Mineral Resources dated July 12, 2006:

Cautionary Note to U.S.Investors concerning estimates of Measured and Indicated Resources. This section uses the terms “measured resources” and “indicated resources.” We advise U.S. investors that these terms are not recognized by the SEC. The estimation of measured resources and indicated resources involves greater uncertainty as to their existence and economic feasibility than the estimation of proven and probable reserves. U.S. investors are cautioned not to assume that mineral resources in these categories will be converted into reserves.

		Tons (short)				Cu (%)
Resources
Measured			181,000				5.07
Indicated			265,000				5.93
Total resources			446,000				5.58

Calculation method		Polygon
Cut off grade		3.00 % Cu
High-grade cut (Cu)		12.00 % Cu.
Dilution		Long hole: 15% Shrinkage: 20%
Mill recovery (Cu)		95%
Price assumption (Cu)		1.25US$/pound
Exchange rate CAN $/US$		0.833

     Inferred Resources

Cautionary Note to U.S.Investors concerning estimates of inferred resources. This section uses the terms “inferred resources.” We advise U.S. investors that these terms are not recognized by the SEC. The estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. U.S. investors are cautioned not to assume that estimates of inferred mineral resources exist, are economically minable, or will be upgraded into measured or indicated mineral resources.

		Tons (short)				Cu (%)
Resources
Inferred			1,441,000				6.76

Calculation method		Polygon
Cut off grade		3.00 % Cu
High-grade cut (Cu)		12.00 % Cu.
Dilution		Long hole: 15% Shrinkage: 20%
Mill recovery (Cu)		95%
Price assumption (Cu)		1.25US$/pound
Exchange rate CAN $/US$		0.833

     Royalties

     MSV will pay a royalty of 2% of the net smelter returns (70% to Corner Bay, now Pan American Silver Corp., and 30% to SOQUEM) for any minerals mined from the property after production of 826,725 tons (750,000 tonnes).

     The Cedar Bay Property

     The Cedar Bay property is contiguous with mining concession No. 497 and mining lease No. 656 of the Copper Rand Property, along their western and north-western boundaries. The Cedar Bay Property is comprised of two mining concessions (Nos. 440 and 461), covering an area of approximately 122 hectares, in the Township of McKenzie, in the electoral district of Ungava.

     The Cedar Bay Property was a gold-copper producer and operated from 1957 to 1990. It produced approximately 4.2 million tons of ore grading 0.097 oz/t Au and 1.65% Cu per ton down to a depth of 780 metres. It was placed on care and maintenance in 1990 when its reserves were depleted after a shaft deepening and underground exploration program yielded marginally economic results.

     To consolidate its position in the Chibougamau area, MSV Resources Inc. acquired the Cedar Bay, Henderson I and Henderson II properties (the “Henderson Properties”) from Meston in June of 1993. In consideration of this acquisition, MSV Resources Inc. agreed to assume all environmental and rehabilitation obligations of Meston related to the Henderson Properties, to completely exonerate Campbell from its obligations to de-water the Henderson II and to pay Meston a 3% royalty of the net smelter returns on any minerals mined from Cedar Bay after recovery of all initial capital costs (excluding interest), and after

production of not less than 4,000,000 tons of ore. Since 1994, 196,195 tons of ore have been extracted from the Cedar Bay mine.

     The Cedar Bay Property was acquired by MSV Resources Inc. (who transferred it to MSV in 2007) to permit continued mining of the mineralized zones at Copper Rand that continue at depth. In 1993 and 1994, MSV Resources Inc. conducted an exploration program on the Cedar Bay Property from the underground workings of the Copper Rand Mine in order to define a mineralized zone of sufficient size and quality to justify its reopening. Encouraging results from this program point to the presence of several mineralized zones with economically viable copper and gold grades between the 3200 and 3840 levels directly underneath the last operating levels. These mineralized zones could eventually be developed after the Copper Rand Project has been put into production. The surface installations were dismantled in the spring of 1997. The Cedar Bay Property has good exploration potential and is now part of the Copper Rand Project.

     The Merrill Pit

     Location and Title

     The Merrill Island mine is an open pit located a short haul, approximately, five kilometres from the Copper Rand Mill, in the McKenzie Township, Province of Québec. It is easily accessible by truck from the Copper Rand Mill.

     History

The Merrill Pit is a past-producing open-pit. Given Campbell’s significant presence and infrastructure in the prolific Chibougamau mining camp, Campbell has undertaken a regional evaluation/exploration program to assess the potential for satellite deposits that can be profitably mined and processed at Campbell,s existing facilities. This allowed the Company to identify in the second quarter of 2007 the Merrill Island mine. Site preparation was initiated at the end of April with the pumping of water of the pit and the upgrading of access road. The Company received on September 4, 2007 the Certifiate of Authorization from the MDDEP enabling it to start mining at the Merrill Pit on September 17, 2007. On October 6, the first blast was completed to generate some 50,000 tons of ore to be crushed and trucked to the nearby Copper Rand Mill. Milling of the first ore from the Merrill Island Mine took place on October 15, 2007. In the first weeks, some 6,600 tons of Merrill Island Mine ore have been milled, with grades averaging 0.459% Cu., 0.014 oz/t Au and 0.125 oz/t Ag. Mill recovery was slightly above 90% for copper. A total of 160 tons of concentrate averaging 17.4% Cu was produced during the week.

     Properties of GéoNova

     The activities of GéoNova consist mainly in the acquisition, exploration and development of mining properties. Its strategy is to focus on exploration in the Province of Québec and more specifically, in the Abitibi region.

     The main projects of GéoNova were the Discovery project which was sold in February 2006 and the Chevrier project which was sold in October 2007, as more fully described under subsection entitled “History and Development of the Company”. The on-going projects of GéoNova are the Berthiaume syndicate (the “Berthiaume Syndicate”) and the Pitt Gold property (the “Pitt Gold Property”).

     Berthiaume Syndicate

     The Berthiaume Syndicate is a joint venture created on May 1, 1996 following the acquisition of mining properties by the mining syndicate known as the Beep Mat-1995 Syndicate, created in May 1995. The Berthiaume Syndicate consists of five mining exploration companies with initial interests as follows: Freewest Resources Canada Inc. (“Freewest Resources”) (22.5%), Ressources Unifiées Oasis inc. (22.5%), SOQUEM (22.5 %), EX-IN (10%) and GéoNova (22.5%). In 1997, EX-IN did not participate in exploration, and its interest was diluted to 9.44% while the interest of the other partners rose to 22.64% each. Partners Ressources Unifiées Oasis inc. and Freewest Resources did not fund their portion of the 1998 program nor their portion in relation to EX-IN’s non-participation for that period as well as for the fall of 1997, and their interests were diluted. EX-IN, Freewest Resources and Ressources Unifiées Oasis inc. all declined to participate in the summer 1999 program and costs were equally divided between SOQUEM and GéoNova. On October 31, 1999, the interests of the companies were as follows: Freewest Resources (20.04%), Ressources Unifiées Oasis inc. (20.04%), EX-IN (8.41%), SOQUEM (25.75%) and GéoNova (25.75%). Only Freewest Resources, SOQUEM and GéoNova participated in work conducted in 2000 in respective proportions of 28%, 36% and 36%. Interests will be recalculated shortly. GéoNova has been the project operator on behalf of the Berthiaume Syndicate since February 1997. When a partner’s interest falls below 10%, it can choose to convert the residual interest into a royalty. Partners who become diluted and convert their residual interest into a royalty share a royalty of 2% of the net smelter returns equally among them. Half the royalty (1%) may be repurchased by any future mine operator for $1,000,000 in the first year of production from a deposit discovered on the property. Notwithstanding the above, no member of Syndicate may receive a royalty of more than 1% of the net smelter returns or payment of more than $500,000.

     Property, Location and Access

     The Berthiaume Syndicate’s properties consist of 477 claims on two properties; Berthiaume which is comprised of 226 claims, covering 3,609 hectares, and Noyelles which is comprised of 251 claims covering 4,016 hectares. These properties are situated in Berthiaume, Noyelles and Le Tardif Townships, approximately 60 kilometres northwest of Lebel-sur-Quévillon and are less than 25 kilometres from the Discovery Project.

     Geology

     The geology of the two properties consist of volcanic rocks to the north and sedimentary and volcanics to the south. The sediments contain magnetic horizons of banded-iron formations. The known gold mineralization on the Berthiaume property is related to shear zones and/or folding in the iron formations. In these zones, the magnetite is replaced to a greater or lesser extent by ferrous amphiboles (grunerite) and by pyrrhotite. This mineralization model particularly the Km55 showing on Berthiaume property is similar to that of the Musselwhite deposit in northern Ontario.

     On the Noyelles property, gold mineralization is associated with horizons of silica sediments and ferrous sediments in a shear zone. These horizons are located about 100 metres north of a magnetic banded-iron formation. Exploration work conducted by the Syndicate to date includes Beep-Mat prospecting, line-cutting, geophysical and geological surveys, stripping and 3,558 metres of drilling in 34 holes. Overall, this work resulted in the identification of numerous discontinuous and/or fold zones and geophysical or geochemical anomalies that should be tested in the future. The “Km55” and “Ludger” gold showings merit further exploration.

     The Pitt Gold Property

     In June 1998, GéoNova announced the execution of an agreement allowing it to acquire, from Santa Fe Canada Inc., the Pitt Gold Property in Duparquet Township, about 30 km northwest of Rouyn-Noranda, Québec. In December 1999, GéoNova granted SOQUEM an option to acquire an interest in this property. SOQUEM is the project operator.

     On May 18, 1999, GéoNova signed an agreement with Santa Fe Canadian Mining Ltd. (“Santa Fe”), a wholly-owned subsidiary of Newmont Gold Corp., for the acquisition of a 100% interest in the Pitt Gold Property. An underlying novation agreement among Santa Fe, GéoNova and Alain Cotnoir, Jacques Beauchemin, Jeanne Cotnoir and Maude Cotnoir (the “Cotnoir-Beauchemin group”) was also signed on October 27, 1998 pursuant to which GéoNova assumed, in Sante Fe’s stead, Sante Fe’s commitments to the Cotnoir-Beauchemin group. By agreement dated October 19, 1999, the Cotnoir-Beauchemin group and GéoNova agreed to replace these commitments with payment of $35,000 to the Cotnoir-Beauchemin group upon final signature between GéoNova and another party of a final agreement to perform work on the property, and $40,000 on or before February 28, 2002, plus a 2% royalty on the net smelter returns. By paying $800,000 or $900,000 depending on the property potential, the royalty on the net smelter returns may be reduced to 1%.

     SOQUEM has an option on the property pursuant to an agreement dated May 23, 2000 as amended on June 1, 2000. This agreement allows SOQUEM to acquire an initial 50% undivided interest in the property in consideration of $225,000 in exploration work carried out by July 31, 2002. Once this interest is acquired, SOQUEM may choose to form a 50-50 joint venture with GéoNova or acquire an additional 30% undivided interest by incurring $400,000 in exploration expenses on its own, on or before July 31, 2004. Subsequently, GéoNova can choose to form a 20-80 joint venture with SOQUEM or convert its 20% undivided interest into a royalty of 1% of the net smelter returns. SOQUEM is the project operator.

     By July 31, 2002, SOQUEM acquired its 50% interest in the property and formed a joint venture with GéoNova. In July 2004, Ressources Minières Normabec ltée (“Normabec”) signed an agreement with SOQUEM and GéoNova under which Normabec has the option to acquire an initial 60% undivided interest in the property in consideration of $1.0 million in exploration work carried out by December 31, 2006. The exploration work should include 15,000 metres of diamond drilling and the first $0.5 million has to be spent before January 1, 2006. An additional 20% undivided interest can be acquired by Normabec by spending $0.5 million before January 1, 2008.

     As at December 31, 2006, Normabec had spent $1,109,271.37 and had drilled 10,773 meters. By February 28, 2007, Normabec earned its 60 percent interest in the Pitt Gold property by completing the 15,000 meters of drilling on the property since the signing of this agreement. On Decembre 31, 2007, Normabec completed all conditions required for the second option to acquire an additional 20 percent interest in the property by spending an additional $534,000 in exploration work from March 1 to December 31, 2007. Verifications should be done soon in 2008.

     Following the foregoing, Normabec has to submit a feasibility study that triggers the opportunity for Geonova to re-acquire up  to 40% of Pitt Gold by paying 150% of expenditures. The same can be acquired by paying 75% if such a study is not produced before December 31, 2010. Geonova has 120 days to exercise the option after the earlier of the two possibilities.

     Location, Access and Ownership

     Located in the Duparquet Township about 30 km northwest of Rouyn-Noranda, Québec, the property consists of two contiguous claim blocks. The main block, the Pitt, is comprised of 20 claims that are subject to a royalty of 2% of the net smelter returns held by the Cotnoir-Beauchemin group. The Pitt block extension, located at the south-east corner of the former, consists of four claims. The property covers a total area of 384 hectares and is easily accessible by Route 393, which is a few hundred metres off the northern boundary of the claims.

     Geology

     The Pitt property lies within the volcano-sedimentary belt of the Archean-age Abitibi subprovince. The rocks on the property include mafic to ultra-mafic volcanics and sediments intercalated with numerous quartz-feldspar porphyries. The Destor-Porcupine Fault, a major regional auriferous structure, crosses the Pitt property. Numerous gold showings are found all along this structure, as well as numerous active and former producers stretching from Timmins in Ontario to Destor in Québec. These deposits occur in a geological and structural environment similar to the one on the property.

     The Pitt property contains numerous gold-bearing structures, subsidiary to the Destor-Porcupine Fault to the north, the most important of which are the “Stinger zone” and the “Pitt South zone”. These are characterized by altered shear and/or brecciated zones that contain quartz-carbonate veining and sulphides, and they are in or at the contacts of the quartz-feldspar porphyries. The sulphides present are mainly pyrite with some small concentrations of chalcopyrite, galena and sphalerite. Fine grains of gold are often seen in the mineralized zones. After compiling old data and conducting some grass-roots work, Santa Fe Canada Inc. carried out a drill program consisting of 28 holes totalling 16,691 metres for over $1 million between 1995 and 1997. SOQUEM and GéoNova intend to compile all the old and recent data, and to continue to explore these mineralized zones and the property in general.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Management’s Discussion and Analysis

This report provides management’s analysis of the past performance and future prospects of Campbell Resources Inc. (the “Company,” “Campbell”) and offers supplementary information to the consolidated financial statements. Readers are encouraged to consult the financial statements for year ending December 31, 2007 which are available at www.sedar.com and on the Company’s website. The consolidated financial statements have been prepared in accordance with Canadian Generally Accepted Accounting Principles (“GAAP”). All amounts are in Canadian dollars, unless otherwise indicated.

Campbell’s operations are focused in the Chibougamau mining camp, which is located in the north central part of the Province of Québec. The Company holds interests in gold and copper properties as well as the Copper Rand Mill. In 2007, the Copper Rand Mine was in commercial production for the full year, the Corner Bay project started the development of a ramp in May, the Joe Mann Mine ceased commercial production in September, and the Merrill Pit began production in October.

Highlights

Significant developments during and subsequent to the year ended December 31, 2007 included:

	•		Executed, along with subsidiaries GéoNova and MSV Resources, its obligations pursuant to the Plans of Arrangement with creditors and exited from protection under the CCAA. An extension of CCAA protection was granted by the Court for subsidiary Meston Resources.
	•		Entered into a three year off take contract effective January 1, 2007 with Ocean Partners UK Limited (“Ocean Partners”) for the sale of its concentrate. In February 2008, the contract was extended to December 31, 2013.
	•		Sold the Eastmain Mine property for $4.1 million pursuant to the Company’s obligations under the Plan of Arrangement.
	•		Sold the Chevrier property for $1.5 million.
	•		Raised $16.1 million in convertible debt and equity, including:

	o		$7.0 million in flow-through shares and $4.0 million in guaranteed convertible debentures to complete development of the high-grade Corner Bay copper deposit;
	o		$3.0 million in flow-through shares for its exploration program;
	o		$2.1 million in convertible demand debenture.

Mining and development

	•		Awarded the contract for Corner Bay development to CMAC-Thyssen, who began mine development in May.
	•		Began development and shipment of Corner Bay ore to the Copper Rand mill in early 2008.
	•		Implemented the Alimak mining system to increase ore production and improve ground conditions at the Copper Rand Mine.
	•		Increased throughput at the Copper Rand Mill by 69% over 2006 to 261,650 tons of ore.
	•		Received the final permits from the Quebec Ministry of Environment to allow mining of the Merrill Pit in line with the Company’s strategy of developing satellite deposits to provide additional feed for the Copper Rand Mill.
	•		Began production from the Merrill Pit in October 2007.
	•		Placed the Joe Mann Mine on care and maintenance in September 2007 and in discussions as to its potential sale.
	•		Increased total metal production over 2006 as follows: copper by 34%, silver by 18%.
	•		Commissioned the paste backfill plant and completed the back filling of mined-out areas to stabilize ground conditions at the Copper Rand Mine.

Creditor protection and restructuring

On June 30, 2005 the Company and its subsidiaries filed for protection under CCAA and were granted an initial order requiring the presentation of Plans of Arrangement. Delays in completing development of the Copper Rand Mine resulted in substantial additional costs and production shortfalls which brought about a rapid deterioration of the Company’s financial situation.

On June 8, 2006, the Company filed Plans of Arrangement. On June 26, 2006 the Plans of Arrangement were approved at a meeting of creditors of the Company and its subsidiaries, and on June 27, 2006, the Superior Court of Québec sanctioned the Plans of Arrangement.

In order to achieve its Plans of Arrangement, financial restructuring and reorganization, the Company completed in 2006 and 2007 three equity financings and three flow-through share equity financings, $4,000,000 and $2,050,000 debt financings with the issuance of Guaranteed Convertible Debentures and a Convertible Demand Debenture, initiated and completed various business transactions, including the sale of exploration and mining properties, and entered into an Operating Consulting Agreement with Nuinsco.

The net proceeds of the 2006 equity financing of $16,619,000 were used to repay the Exchangeable Capital Units of $4,000,000, fund further development at the Copper Rand Mine, finance development of the Corner Bay deposit and for general working capital. The net proceeds of $1,682,000 of the 2007 $2,050,000 debt financing were transferred to the Monitor for the settlement of pre-petition accounts payable and accrued liabilities, and the proceeds of the $4,000,000 debt financing and $7,000,000 flow-through share financing were used to finance development of the Corner Bay deposit.

Under the Operating Consulting Agreement, Nuinsco has provided consulting services for the Company’s development and mining activities, including development to increase production at the Copper Rand Mine, development of the Corner Bay deposit and a mining plan at the Joe Mann Mine. For its services, Nuinsco has received or will receive:

		-		2 million common shares of the Company upon commencement of the provision of services;
		-		1 million common shares of the Company upon completion of the equity financing; and
		-		$25,000 plus 200,000 common shares of the Company per month, in advance (up to a maximum of 4 million common shares).

With the closing of the $4,000,000 debt financing and $7,000,000 flow-through share financing, Nuinsco completed its earn-in of a 50% carried interest in the Corner Bay property and is entitled to 50% of the positive operating cash flow generated by Corner Bay.

Also, in consideration of Nuinsco assisting the Company in obtaining funding to complete its reorganization and upon closing of the equity financing in the amount of $7,000,000, Nuinsco received 67,807,429 share purchase warrants exercisable at $0.10 per share for a two year period of the Company representing approximately a 20% equity interest in the Company following the equity financing.

On February 27, 2007, the Monitor under the CCAA presented a Certificate of Execution with respect to the Plan of Arrangement of Campbell confirming that Campbell has executed all of its obligations pursuant to its Plan of Arrangement with its creditors. The Company also remitted to the Monitor all amounts required for the payment in full of the claims made by the creditors of GéoNova. On November 17, 2007 the Monitor presented a Certificate of Execution with respect to the Plan of Arrangement of subsidiary MSV confirming that MSV has executed all of its obligations pursuant to its Plan of Arrangement. The court has granted an extension of the CCAA protection to May 31, 2008 for subsidiary Meston.

Summary

Development

Campbell is a junior mining company that operates gold and copper mines and owns a number of additional exploration properties, all of which are located in the greater Chibougamau area. The area’s population base provides the manpower and services required by the Company for its operations.

The main components of the operations are the Copper Rand Mine and the Copper Rand Mill, a 3,000 tons per day copper/gold concentrator. The Company has started the development of the Corner Bay project to extract a bulk sample of 42,000 metric tonnes. The Joe Mann Mine was in operation a total of 25 years since 1956 and is presently held on care and maintenance. For the last three years prior to closing, the mine produced a total of 287,000 tons of ore at an average grade of 0.224 oz/t Au.

Development of the Copper Rand Mine required substantial funding. In 2003, 2004 and 2005, the Company invested the entire amount available ($22 million) under the Investissement Québec credit facility in addition

to approximately $13.1 million raised through private placements of common shares in Copper Rand development.

In 2006, the Company completed three equity financings which provided funds to continue development of both the Joe Mann and Copper Rand mines. A total of $18.1 million was raised as follows: $10 million through an equity private placement, $5.6 million through a rights offering to shareholders and $2.5 million through a private placement with Nuinsco.

The net proceeds of the three equity financings were $16.6 million. This amount was used to repay the Exchangeable Capital Units of $4.0 million plus $0.6 million for interest and other costs, to fund further development at the Copper Rand and Joe Mann mines, to finance development of the Corner Bay deposit and for general working capital.

On July 20, 2007, Campbell closed the financing for completion of development of its high-grade Corner Bay copper project near Chibougamau, Québec, with the issuance of $4.0 million of convertible debentures equally to Nuinsco and Ocean Partners. The convertible debentures bear interest at 11.5% per annum and are convertible into units of Campbell at a price of $0.13 per unit, with each unit consisting of one common share and one-half of one common share purchase warrant. The convertible debentures mature in two years and are secured by a first charge on Corner Bay. Each whole warrant entitles the holder to purchase one additional common share of Campbell for $0.16 per share for a period of 24 months from closing. The Company will have the right to redeem up to 50% of the principal amount on July 1, 2008 after a 30 days prior written notice given to the holders. Upon notice being given of the redemption by the Company, the holders may, at their option, convert all or part of such principal amount to be redeemed into units. If the holders do not exercise such option, the Company shall nevertheless issue to such holders the number of warrants it would have been entitled to receive had they so converted.

Exploration

Exploration results have been particularly promising on the Corner Bay property. In 2006, Système Géostat International Inc. completed a 43-101 compliant technical report that estimates Corner Bay’s measured and indicated resources at 446,000 tons grading 5.58% copper using a 3% Cu cut-off grade (181,000 tonnes at 5.07% Cu measured and 265,000 tonnes at 5.93% Cu indicated). The report also recommended proceeding with the extraction of a 42,000 ton bulk sample with a forecast grade of 3.7% copper from the upper portion of the deposit. On the strength of this report, the Company began development of the project which will include a ramp of approximately 665 meters in length. The bulk sample material from the Corner Bay deposit will be processed in the Copper Rand Mill.

Copper Rand Mill

To further increase throughput at the Copper Rand Mill, the Company is undertaking an evaluation of past producing and near production projects in the Chibougamau camp. One of the first sources of additional potential mill feed identified in 2006 is the Merrill Pit, a past producer located less than 5 kilometres from the Copper Rand Mill.

Write-downs

In 2005, in light of higher costs and accumulated delays in development due to the need for extensive mine rehabilitation, an asset impairment analysis was performed on the Copper Rand Mine leading to a $16.7 million property write-down.

As of December 31, 2005, the Company wrote down the book value of the Discovery property by $1.8 million following the acceptance of the offer made by Strateco Resources Inc (“Strateco”) in February 2006. In August 2006, GéoNova sold the Discovery property for an amount of $1.5 million payable pursuant to the terms of the Purchase/Sale Agreement as follow: $0.5 million in cash and a share certificate representing 1 million shares of Cadiscor Resources Inc. (a subsidiary of Strateco) valued at $1.00 per share.

In 2006, the Company wrote down the carrying value of the Copper Rand Mine by $23.7 million following an asset impairment analysis which was required as a consequence of the development problems encountered in 2006 and the additional costs and delays caused by the rock fall that occurred in February 2007.

Also in 2006, the Company wrote down its interest in the Joe Mann property by $1.3 million based on an asset impairment analysis due to the production problems encountered in 2006 and the decrease in available mineral reserves.

Recent property transactions

On February 27, 2007, the Company sold its Eastmain Mine Property to Eastmain Mines Inc., a wholly-owned subsidiary of Eastmain Resources Inc. for a cash consideration of $2,500,000, $1,600,000 in shares from the purchaser and 1,000,000 share purchase warrants. The Company is also entitled to a Net Smelter Return Royalty of 2% on any production over and above 250,000 ounces of gold. Eastmain Resources Inc. will have the option to re-purchase one-half of the royalty for $1 million.

On November 12, 2007, the Company announced that its wholly-owned subsidiary GéoNova entered into an Agreement with Tawsho Mining Inc. ("Tawsho") for the sale of the Chevrier property for a cash consideration of $1,500,000.

Recent financing initiatives

On December 6, 2007, the Company entered in a Revolving Credit Facility with Nuinsco for an amount of $1,500,000 for a minimum term of six months (“Initial Term”), bearing interest, payable quarterly, at the rate of 12% per annum and secured by a second or third ranking, as applicable, immovable and movable hypothec on all the present and future assets of the Company and its subsidiary Ressources MSV 2007 Inc. (“MSV 2007”). Following the Initial Term, the principal amount outstanding together with interest accrued thereon shall be payable on demand.

In 2007, three flow-through share financings were completed generating gross proceeds in cash of $10,028,000. Share issue costs of $896,527 were applied in reduction of capital stock.

On December 24, 2007, the Company entered in an Advance Facility with Ocean Partners for an amount of $1,500,000, bearing interest at the rate of 11.5% per annum.

Selected annual information

		(Expressed in thousands of Canadian dollars except per
Summary operating results data		share amounts and unless otherwise indicated)
Years ended December 31		2007				2006				2005
Gross metal sales		$	26,792			$	11,925			$	19,915
Mining expenses		$	38,260			$	13,897			$	16,346

		(Expressed in thousands of Canadian dollars except per
Summary operating results data		share amounts and unless otherwise indicated)
Years ended December 31		2007				2006				2005
Property write down			-0-			$	25,001			$	18,512
Net loss		$	18,988			$	41,195			$	24,430
Net loss per share		$	0.05			$	0.27			$	0.23
Years ended December 31			2007				2006				2005
Summary balance sheet data
Total assets		$	65,350			$	115,142			$	134,643
Long-term financial liabilities (1)		$	21,025			$	65,357			$	67,782
Other data
Short tons produced (in 2005 and 2006, from Joe Mann Mine only)			261,650				80,639				139,064
Sales revenue per ton ($/ton)		$	102.40			$	147.88			$	143.21
Mining expenses per ton ($/ton)		$	146.23			$	172.34			$	117.54
Ounces of gold sold			15,380				13,816				30,460
Average selling price ($/oz Au)		$	711			$	682			$	539
Production costs ($/oz Au) (2)			N/A			$	927			$	517
Grade (oz/t Au)			0.072				0.207				0.254
Recovery			81.83	%			84.87	%			83.36	%
Average selling price ($/lb Cu) (2)		$	3.35				N/A				N/A
Production costs ($/lb Cu)		$	5.71				N/A				N/A
Grade (% Cu)			0.99	%			N/A				N/A
Recovery			95.94	%			N/A				N/A

Results of operations

Metal sales include revenues from the Copper Rand Mine, the Merrill Island Pit and the Joe Mann Mine in fiscal 2007 and only revenues from the Joe Mann Mine for the two prior years. Prior to 2007, the Copper Rand Mine was in pre-production and the net metal sales were applied against capitalized development costs. The operations at Joe Mann Mine ceased in September 2007. Merrill Pit resumed production during the fourth quarter of 2007.

Sales		2007								2006								2005
		Quantities				‘000 $				Quantities				‘000 $				Quantities				‘000 $
Gold (ounces)			15,380				11,007				13,816				9,795				30,460				17,818
Copper (lbs)			4,601,598				15,514				440,000				1,973				903,000				2,039
Silver (ounces)			19,394				238				9,282				120				22,286				194
Gain (Loss) on foreign exchange							33								37								(136	)
Total							26,792								11,925								19,915

Fiscal years ended December 31, 2007 and December 31, 2006

Gross metal sales were $26.8 million in 2007 compared to $11.9 million in 2006 ($15.9 million of gross metal sales of Copper Rand were capitalized in 2006). The net decrease of $1.0 million is explained by:

	•		Ore tonnage was reduced by 17% at Joe Mann from 80,639 tons in 2006 to 67,292 tons in 2007; gold grade was also reduced by 13% from 0.207 oz/t in 2006 to 0.181 oz/t in 2007.
	•		Ore tonnage increased by 69% at Copper Rand from 76,250 tons in 2006 to 129,161 tons in 2007; copper grade was reduced by 23% from 2.19% in 2006 to 1.69% in 2007.
	•		Ore tonnage from Merrill Pit was 65,197 tons with a copper grade of 0.39% compared to nil in 2006.
	•		Average selling price per ounce of gold increased by 4% from $682 ($601 US) in 2006 to $711 ($686 US) in 2007.
	•		Average selling price per pound of copper decreased from $3.72 ($3.29 US) in 2006 to $3.35 ($3.37 US) in 2007. The strength of the Canadian dollar vis-à-vis the US dollar had a major impact on revenue.

Production costs increased by $24.4 million in 2007 to $38.3 million compared to $13.9 million in 2006. The increase is mainly due to the following factors:

	•		In 2006, the Copper Rand production costs of $16 million were capitalized as development costs.
	•		Additional expenses totalling $8.4 million were incurred in implementing the Alimak mining method, developing access to different mining zones, commissioning the backfill plant and backfilling all mined open stopes as well as by an increase in maintenance expenses, the re-initiation of a definition drilling program and high rehabilitation costs following the rock fall in the main ramp at the end of February 2007.

Property write-downs were nil in 2007 compared to $25.0 million in 2006.

General administration expenses increased from $2.9 million in 2006 to $3.5 million in 2007. The increase of $0.6 million in 2007 was due to a provision for a doubtful account recorded at year end. According to a letter of understanding between Gold Bullion and the Company concerning the sale of the Joe Mann property, Gold Bullion was to assume the responsibility for all the expenses at Joe Mann as at September 16, 2007. Due to the difficulties in collecting these amounts, the Company decided to take a provision for the $0.6 million receivable.

Stock-based compensation was $0.3 million in 2007 representing 2,850,000 options granted under the Employee Incentive Plan and Director’s Stock Option Plan (exercise price $0.16), compared to $0.5 million representing 4,950,000 options granted (exercise price $0.15) in 2006.

CCAA and reorganization costs totalled $0.8 million in 2007, which represent professional fees. In 2006, CCAA and reorganization costs totalled $6.5 million, broken down as follows: cost of the shares and warrants issued to Nuinsco under the Consulting Agreement, $4.3 million; legal and professional fees, $1.6 million; other reorganization costs, $0.6 million.

No exploration costs were incurred in 2007, as was also the case in 2006. Tax credits amounting to $0.2 million relating to exploration costs incurred in 2005 were received and recorded in 2006.

Care and maintenance amounted to $0.2 million in 2007, which is comparable to the care and maintenance costs incurred in 2006.

Total interest expense on long-term and short-term borrowings amounted to $2.1 million in 2007 compared to $1.2 million in 2006 (net of interest revenue on restricted deposits and exchange agreements of $2.3 million in 2006). The increase in 2007 is explained by the interest paid on the credit facility with Investissement Quebec for $1.1 million which was capitalized in 2006. The charges in 2007 on the new Guaranteed Convertible Debentures, the Convertible Demand Debenture and others are comparable to the interest paid on the Exchangeable Capital Units facility (ECU) and others in 2006. The ECU was repaid at the end of the third quarter of 2006.

Gain on foreign exchange amounted to $1.2 million in 2007 compared to a loss of $0.03 million in 2006. This increase is explained by the implementation of the new sale contract of concentrate to Ocean Partners providing for prepayment of 90% of the net smelter return. Those prepayments are offset when the ownership of the product is transferred to Ocean Partners and the revenues are recognized. The strength of the Canadian dollar during the time that elapsed between prepayment and settlement resulted in the gain.

Other income amounted to $4.7 million in 2007 compared with $0.6 million in 2006. In 2007, the Company realized a gain on the sale of property, plant and equipment of $4.7 million (Eastmain property for $3.9 million, Chevrier property for $0.7 million and others for $0.1 million), and a loss on the sale of short term investments of $0.4 million which was offset by a gain on creditor settlement and other income of $0.4 million. In 2006, an amount of $0.5 million came from a gain on an investment in shares.

Fiscal years ended December 31, 2006 and December 31, 2005

Gross metal sales decreased 40% from $19.9 million in 2005 to $11.9 million in 2006. This decrease reflected a 42% decrease in tons of ore produced, from 139,064 tons in 2005 to 80,639 in 2006, and a 19% decrease in gold grade mined at Joe Mann to 0.207 ounces per ton in 2006 from 0.254 ounces per ton in 2005. The decrease in tonnage mined was the result of a reduction of the mineral reserves and development.

The reduced production was partially offset by an increase in the average price per ounce of gold (13,816 ounces at an average selling price of $682 (US$601) per ounce in 2006, compared with 30,460 ounces at an average selling price of $539 (US$449) per ounce in 2005).

Production costs decreased by $2.5 million in 2006 to $13.9 million. However, production costs per ounce of gold produced increased significantly in 2006 to $927 (US$817) per ounce, compared with $517 (US$422) per ounce in 2005. The increase in unit costs was due to the impact of lower production levels combined with the lower grade of ore mined during the year.

Property write-downs totalled $25.0 million in 2006, versus $18.5 million in 2005 as discussed above.

General administration expenses increased from $2.7 million in 2005 to $2.9 million in 2006. The increase in 2006 was due to the amortization of the deferred charges of $0.2 million related to the fees paid upon signature of the Consulting Agreement with Nuinsco.

Stock-based compensation was $0.5 million in 2006 representing 4,950,000 options granted under the Employee Incentive Plan and Director’s Stock Option Plan (exercise price $0.15) compared to nil in 2005.

CCAA and reorganization costs totalled $6.5 million in 2006, broken down as follows: cost of the shares and warrants issued to Nuinsco under the Consulting Agreement, $4.3 million; legal and professional fees, $1.6 million; and other reorganization costs of $0.6 million. In 2005, CCAA costs included professional fees of $1.0 million.

No exploration costs were incurred in 2006 compared to $0.9 million of exploration costs in 2005. Tax credits amounting to $0.2 million relating to exploration costs incurred in 2005 were received and recorded in 2006. In 2005, the Company completed a $2.0 million exploration program, primarily at Corner Bay. Of this, $1.8 million was funded by flow-through shares issued at the end of 2004.

Care and maintenance amounted to $0.1 million in 2006 compared to $0.3 million in 2005. The decrease was mainly due to a reduction of inventory obsolescence and lower expenses on the Eastmain property and the properties of the subsidiary GéoNova.

Total interest expense on long-term and short-term borrowings amounted to $1.2 million in 2006, consistent with the $1.2 million expense in 2005, and was net of interest revenue on restricted deposits and exchange agreements of $2.3 million and $2.0 million in 2006 and 2005 respectively. The majority of the interest expense in both 2006 and 2005 arose from the ECU facility, which was repaid at the end of the third quarter of 2006.

In 2001 and 2002, the Company sold a $32.4 million royalty on future production from the Joe Mann Mine for cash and notes receivables. At June 30, 2005, the outstanding balance was $25.4 million, bearing interest of 6.25% and maturing February 2011. The royalty carried forward was $24.9 million. Because the Company placed itself under CCAA protection and was therefore in default, the royalty unit holders exercised their right to require the Company to buy back the units. The buyback price was the fair market value at the date of the default, June 30, 2005. An independent engineering firm valued the royalty at $5.9 million as of that date, and the Company therefore recorded a gain of $19.0 million. This buyback price was applied against the notes receivable. The remaining balance was $17.4 million, which amount became due. Given the uncertainty regarding the collection of all or parts of these notes from the unit holders, the Company recorded an allowance for doubtful accounts for the full amount. Each unit holder was been notified of the obligation to pay the due amount. In November 2007, legal proceedings against the Company were initiated. The Company intends to take all necessary legal action to settle the situation and recover any amount due to the Company.

Other income amounted to $0.6 million in 2006, compared with $3.6 million in 2005. Of the 2006 amount, $0.5 million came from a gain on an investment in shares. In 2005, $1.6 million came from the repurchase of the royalty and $2.0 million came from the proceeds of the sale of the Bachelor Lake property.

Summary of quarterly results

Selected financial information for each quarter of the fiscal years ending December 31, 2007 and 2006 is as follows (unaudited):

		Q-1				Q-2				Q-3				Q-4
2007
Gross metal sales (in thousands of dollars)		$	1,714			$	1,482			$	14,201			$	9,395
Loss from operations (in thousands of dollars)		$	(5,535	)		$	(5,037	)		$	(4,749	)		$	(9,632	)
Net loss (in thousands of dollars)		$	(1,745	)		$	(4,341	)		$	(3,940	)		$	(8,962	)
Basic and fully diluted loss from operations per share		$	(0.02	)		$	(0.01	)		$	(0.01	)		$	(0.02	)

		Q-1				Q-2				Q-3				Q-4
Basic and diluted net loss per share		$	(0.01	)		$	(0.01	)		$	(0.01	)		$	(0.02	)
2006
Gross metal sales (in thousands of dollars)		$	2,644			$	3,840			$	2,267			$	3,174
Loss from operations (in thousands of dollars)		$	(2,501	)		$	(1,888	)		$	(4,262	)		$	(33,030	)
Net loss (in thousands of dollars)		$	(2,298	)		$	(1,755	)		$	(4,902	)		$	(32,240	)
Basic and fully diluted loss from operations per share		$	(0.02	)		$	(0.02	)		$	(0.04	)		$	(0.20	)
Basic and diluted net loss per share		$	(0.02	)		$	(0.02	)		$	(0.04	)		$	(0.19	)

Summary of production data

Joe Mann Mine

Production at the Joe Mann Mine ceased on September 11, 2007 and the mine was placed on care and maintenance. For the nine months of operation in 2007, the total production was 67,292 tons of ore for a metal production of 10,092 ounces of gold (0.181 Au oz/t), 281,361 pounds of copper (0.22% Cu) and 6,196 ounces of silver (0.154 Ag oz/t). The recovery rate was 82.71% for gold, 94.16% for copper and 59.82% for silver.

Production for fiscal 2006 was 80,639 tons of ore for a metal production of 14,146 ounces of gold (0.207 Au oz/t), 439,778 pounds of copper (0.28% Cu) and 9,322 ounces of silver (0.169 Ag oz/t). The recovery rate was 84.87% for gold, 95.75% for copper and 68.35% for silver.

The following summary presents quarterly production data for fiscal 2007 and fiscal 2006:

		Q-1				Q-2				Q-3				Q-4
2007
Tons produced			16,744				28,083				22,465			Nil
Grades
Au (oz./t)			0.218				0.171				0.167
Cu (%)			0.21				0.23				0.22
Ag (oz./t)			0.157				0.161				0.143
Recovery
Au (%)			82.60				82.51				83.07
Cu (%)			92.86				95.15				93.81
Ag (%)			59.55				59.02				61.16
Metal produced
Au (oz.)			3,019				3,952				3,121
Cu (lbs)			66,435				122,065				92,861
Ag (oz.)			1,564				2,670				1,962
2006
Tons produced			22,556				23,006				16,808				18,269
Grades
Au (oz./t)			0.186				0.215				0.194				0.237
Cu (%)			0.32				0.33				0.25				0.23
Ag (oz./t)			0.177				0.185				0.139				0.167