This discussion and analysis is made with reference to the Company’s interim unaudited consolidated financial statements for the three months ended March 31, 2007 and the annual audited consolidated financial statements and notes thereto for the years ended December 31, 2006 and 2005, which were prepared in accordance with Canadian GAAP. The preparation of these financial statements requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of our financial statements, and the reported amount of revenues and expenses during the period. These estimates are based on our historical experience and various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgements about the reported amounts of revenues and expenses, and the carrying value of assets and liabilities that are not readily apparent from other sources. Actual results could differ from these estimates.

We have identified the accounting policies and estimates outlined below as critical to an understanding of our business operations and our results of operations. The impact and any associated risks related to these policies and estimates on our business operations are discussed throughout this discussion and analysis.

Our Audit Committee reviews our accounting policies and all quarterly and annual filings, and recommends adoption of our annual financial statements to our Board of Directors.

Our critical accounting policies and estimates are as follows:

Effective January 1, 2007, the Company retroactively adopted the provisions of Section 1530, "Comprehensive Income", Section 3251, "Equity", Section 3855, "Financial Instruments – Recognition and Measurement", Section 3861, "Financial Instruments – Disclosure and Presentation" and Section 3865, "Hedges" of the Canadian Institute of Chartered Accountants ("CICA") Handbook.

These new Handbook sections collectively provide comprehensive requirements for the recognition and measurement of financial instruments, as well as standards on when and how hedge accounting may be applied. All financial assets and derivative financial instruments, except for those financial assets classified as held-to-maturity or loans and receivables, are measured at their fair value. Financial liabilities are measured at their fair values when they are classified as held for trading purposes, otherwise, they are measured at amortized cost. Section 1530 also establishes standards for reporting and displaying comprehensive income.