NORSEMONT MINING INC.

UNAUDITED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

As at and for the six months ended December 31, 2009 and 2008

NOTICE OF NO AUDITOR REVIEW OF INTERIM FINANCIAL STATEMENTS The accompanying unaudited interim consolidated financial statements of the Company have been prepared by and are the responsibility of Companys management. The Companys independent auditor has not performed a review of the se financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entitys auditor.

Managements Report
The management of Norsemont Mining Inc. is responsible for the preparation of the unaudited Consolidated Financial Statements as well as the financial and other information contained in the Management Discussion and Analysis and Annual Information Form. Management maintains an internal control system in order to provide reasonable assurance as to the reliability of financial information and the safeguarding of assets. The Consolidated Financial Statements are prepared in accordance with generally accepted accounting principles in Canada on a consistent basis and which recognize the necessity of relying on best estimates and informed judgments made by management. The Board of Directors, through the activities of its Audit Committee, meets regularly with financial management and is responsible for ensuring that management fulfills its responsibilities for financial reporting and internal control.

Patrick C. Evans Chief Executive Officer February 12, 2010

Christopher J. Reynolds Chief Financial Officer February 12, 2010

NORSEMONT MINING INC.

Consolidated Balance Sheets (Expressed in Canadian dollars) As at December 31, 2009 and June 30, 2009

December 31, 2009 (unaudited)

June 30, 2009

Assets
Current assets: Cash Receivables (note 3) Prepaid expenses $ 27,406,683 368,644 87,391 27,862,718 374,635 15,496,620 $ 43,733,973 $ $ 12,613,260 1,770,813 80,732 14,464,805 417,848 3,218,196 15,496,620 33,597,469

Furniture, equipment and leasehold improvements (note 5) Long-term investments (note 4) Mineral properties (note 6)

Liabilities and Shareholders Equity

Current liabilities: Accounts payable and accrued liabilities Long-term debt convertible notes (note 7) Asset retirement obligations (note 12) Shareholders equity: Share capital (note 8(b)) Convertible notes (note 7) Contributed surplus Warrants (note 8(d)) Deficit $ 1,677,802 7,458,820 1,008,000 $ 4,730,809 6,981,830 960,000

119,394,524 1,380,000 20,425,578 15,419,981 (123,030,732) 33,589,351 $ 43,733,973 $

100,600,189 1,380,000 17,016,562 14,331,800 (112,403,721) 20,924,830 33,597,469

Nature of operations (note 1) Commitments (note 6 and 11) Subsequent events (note 7 and 8) See accompanying notes to consolidated financial statements. Approved on behalf of the Board

George Bell George Bell

Robert Parsons Robert Parsons

RCH

NORSEMONT MINING INC.

Consolidated Statements of Operations and Deficit and Comprehensive Income (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

Three months ended December 31 2009 Expenses: Exploration Salaries and wages Office and administration Professional fees Amortization Provision for impairment of long-term investments Provision for impairment of receivables Interest on convertible notes Accretion on convertible notes Accretion of asset retirement obligation Foreign exchange loss (gain) Stock-based compensation: Exploration Salaries and wages Other items: Interest and other income $ 3,010,800 $ 343,231 213,708 221,904 24,564 314,444 196,296 242,773 24,000 71,237 122,280 213,081 4,998,319 (605,271) (605,271) 4,393,048 6,769,699 $ 391,490 217,992 226,676 27,802 32,530 35,750 1,144,979 122,992 423,462 9,393,372 (12,900) (12,900) 9,380,472 2008 2009

Six months ended December 31 2008

6,812,116 $ 651,843 408,833 368,166 49,334 747,830 393,907 476,990 48,000 (29,582) 407,404 570,219 10,905,060 (605,307) (605,307) 10,299,753

14,654,017 822,056 482,842 332,946 52,212 200,000 32,530 71,500 1,353,116 603,161 1,765,489 20,369,869 (71,099) (71,099) 20,298,770

Net loss and comprehensive loss for the period

Deficit, beginning of period Extension of term of warrants Deficit, end of period Basic and diluted loss per share Weighted average number of shares outstanding

118,637,684 123,030,732 $ (0.06) 76,220,745 $

83,299,320 92,679,792 (0.18) 53,862,186

112,403,721 327,258 123,030,732 $ (0.15) 73,123,693 $

72,381,022 -92,679,792 (0.38) 53,682,248

See accompanying notes to consolidated financial statements.

NORSEMONT MINING INC.

Consolidated Statement of Shareholders Equity (Expressed in Canadian dollars) Three months ended December 31, 2009
Share capital Number of shares 70,095,865 $ 100,482,135 9,900 9,792,250 65,421 24,002 440,751 80,428,189 $ 34,848 19,701,816 (1,775,402) 175,195 51,110 724,822 119,394,524 $ Convertible notes Warrants Number of warrants 19,692,096 $ 14,914,055 4,896,125 (65,421) (3,225,500) 21,297,300 $ 3,309,973 (185,975) (59,271) (2,558,801) 15,419,981 $ Contributed surplus Deficit Total

Balance, begging period Option exercise Share and warrant issuance Share and warrant issuance costs Warrant exercise Warrant expiry Share issued for RSU plan Interest on note converted to shares Stock-based compensation for options Net loss for the period Balance, December 31, 2009

1,380,000 1,380,000

17,606,880 (24,354) 2,558,801 (51,110) 335,361 20,425,578

(118,637,684) (4,393,048)

15,745,386 10,494 23,011,789 (1,961,377) 115,924 724,822 335,361 (4,393,048)

(123,030,732)

33,589,351

Six months ended December 31, 2009

Share capital Number of shares 70,020,705 9,900 9,792,250 115,421 49,162 440,751 80,428,189 $ Convertible notes Warrants Number of warrants 19,369,721 5,268,500 (115,421) (3,225,500) 21,297,300 $ Contributed surplus Deficit Total

Balance, June 30, 2009 Option exercise Share and warrant issuance Share and warrant issuance costs Warrant extension Warrant exercise Warrant expiry Shares issued from RSU plan Interest on note converted to shares Stock-based compensation for RSUs Stock-based compensation for options Net loss for the period Balance, December 31, 2009

100,600,189 34,848 19,701,816 (2,063,840) 293,635 103,054 724,822 119,394,524

1,380,000 -

14,331,800 3,694,556 (282,121) 327,258 (92,711) (2,558,801) 15,419,981

17,016,562 (24,354) 2,558,801 (103,054) 158,775 818,848 -

(112,403,721) (327,258) (10,299,753)

20,924,830 10,494 23,396,372 (2,345,961) 200,924 724,822 158,775 818,848 (10,299,753)

1,380,000

20,425,578

(123,030,732)

33,589,351

NORSEMONT MINING INC.

Consolidated Statement of Shareholders Equity (Expressed in Canadian dollars)
Three months ended December 31, 2008 Contributed surplus Share issuance obligation

Balance, beginning of period Convertible note and warrant Share issuance costs Exercise of options Units to be issued Shares issued from RSU plan Stock-based compensation for RSUs Stock-based compensation for options Transfer to share on option exercise Net loss for the period Balance, December 31, 2008

Share capital Number of shares 53,829,578 $ 81,056,962 53,333 15,831 53,898,742 $ 130,000 (33,024) 66,200 48,607 71,066 81,339,811

Warrants Number of warrants 8,431,635 $ 7,501,779 1,764,706 10,196,341 $ 1,170,000 8,671,779

Deficit

Total

13,935,233 (48,607) 15,400 531,054 (71,066) -

(83,299,320) (9,380,472)

19,194,654 1,300,000 (33,024) 66,200 15,400 531,054 (9,380,472)

14,362,014

(92.679.792)

11,693,812

Six months ended December 31, 2008 Contributed surplus Share issuance Obligation

Balance, June 30, 2008 Private placements Convertible note and warrants Share issuance costs Option exercise Units to be issued Shares issued from RSU plan Stock-based compensation for RSUs Stock-based compensation for options Transfer to share on option exercise Net loss for the period Balance, December 31, 2008

Share capital Number of shares 50,822,713 $ 70,914,627 3,000,200 53,333 22,496 53,898,742 $ 10,207,648 130,000 (118,865) 66,200 69,135 71,066 81,339,811

Warrants Number of warrants 6,931,535 $ 5,708,627 1,500,100 1,764,706 10,196,341 $ 1,793,152 1,170,000 8,671,779

Deficit

Total

12,133,565 (20,528) (69,135) 180,100 2,188,550 (71,066) -

6,220,000 (6,220,000) -

(72,381,022) (20,298,792)

22,595,797 12,000,800 1,300,000 (118,865) 66,200 (6,220,000) 180,100 2,185,550 (20,298,770)

14,362,014

(92,679,792)

11,693,812

See accompanying notes to consolidated financial statements.

NORSEMONT MINING INC.

Consolidated Statements of Cash Flows (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

Three months ended December 31 2009 2008 Cash provided by (used in): Operations: Loss for the period Items not involving cash: Amortization Interest on convertible notes Accretion on convertible notes Accretion of asset retirement obligation Stock-based compensation for options Stock-based compensation for RSUs Provision for impairment of long-term investment Provision for impairment of account receivable Foreign exchange loss (gain) Changes in non-cash working capital and other items

Six months ended December 31 2009 2008

(4,393,048) 24,564 196,296 242,773 24,000 335,361 314,444 71,237 (416,072) (3,600,445)

$ (9,380,472) 27,802 32,530 35,750 531,054 15,400 1,144,979 343,541 (7,249,416)

(10,299,753) 49,334 393,907 476,990 48,000 818,848 158,775 747,830 (29,582) (2,044,831) (9,680,482)

$ (20,298,770) 52,212 32,530 71,500 2,188,550 180,100 200,000 1,353,116 371,628 (15,849,134)

Investing: Disposition of long-term investment Purchase of furniture and equipment

(6,121) (6,121)

(27,405) (27,405)

3,218,196 (6,121) 3,212,075

(86,206) (86,206)

Financing: Issuance of shares, net of share issue costs Warrant and option exercise Convertible note & warrants subscription

21,050,411 211,419 21,261,830 17,655,264 9,751,419 $ 27,406,683 $

33,176 6,000,000 6,033,176 (1,243,645) 9,137,070 7,893,425 $

21,050,411 211,419 21,261,830 14,793,423 12,613,260 27,406,683 $

5,728,134 6,000,000 11,728,134 (4,207,206) 12,100,631 7,893,425

Increase (decrease) in cash Cash, beginning of period Cash, end of period Supplementary information: Cash paid during the period: Interest Income taxes Non-cash financing activities: Interest on convertible note converted to shares Reclassification of contributed surplus on exercise of options

724,822 24,354

71,066

71,066

724,822 $ 24,354

See accompanying notes to consolidated financial statements.

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

1.

Nature of operations: The Company was incorporated in 1977 under the laws of British Columbia and its common shares trade on the Toronto Stock Exchange and the Lima Stock Exchange. The Company is in the process of exploring its mineral properties The underlying value and recoverability of the amounts shown for mineral properties is dependent upon the ability of the Company to complete exploration and development and the discovery of economically recoverable reserves, the ability of the Company to obtain necessary financing to explore and develop the properties and upon future profitable production or proceeds from disposition of the Companys mineral properties. These financial statements have been prepared on the going-concern basis under which an entity is considered to be able to realize its assets and satisfy its liabilities in the normal course of business. The continuing operations of the Company are dependent upon its ability to continue to raise adequate financing and to generate future profitable operations. The Company completed one financing in the current fiscal year and four financings in the prior fiscal year. While these financings are substantial, and sufficient to enable the Company to fund near-term operations, they are not sufficient of themselves to enable the Company to fund all aspects of its operations and working capital requirements in the long-term, and, accordingly, there may be doubt regarding the going concern assumption. Management believes that it will be able to secure the necessary financing through a combination of the issue of new equity or debt instruments, the entering into of joint venture arrangements or the exercise of warrants for the purchase of common shares. However, there is no assurance that the Company will be successful in these actions. These financial statements do not reflect the adjustments, which could be material, to the carrying value of assets and liabilities, the reported revenues and expenses and balance sheet classifications that would be necessary were the going concern assumption inappropriate.

2.

Significant accounting policies: (a) Basis of consolidation: These consolidated financial statements have been prepared in accordance with Canadian generally accepted accounting principles. They include the accounts of the Company and its wholly-owned subsidiary, Norsemont Peru S.A.C. (Norsemont Peru), incorporate d in Peru. amounts and transactions have been eliminated on consolidation. (b) Furniture, equipment and leasehold improvements: Furniture, equipment and leasehold improvements are carried at cost less accumulated amortization. Amortization is determined at rates which will reduce original cost to estimated residual value over the useful life of each asset. The annual rates used to compute amortization are as follows: All intercompany

Asset Computers Furniture and office equipment Leasehold improvements

Basis Declining-balance Declining-balance Straight-line

Rate 30% per annum 20% per annum Lesser of useful life and term of lease

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

(c)

Mineral properties: The Company expenses, as incurred, exploration expenditures and periodic option payments related to mineral properties. Administrative and land use costs incurred prior to a development decision are also expensed. Mineral property acquisition expenditures under which the Company acquires an ownership interest in a mineral property are capitalized. Capitalized costs for mineral properties represent costs to be charged to operations in the future and do not necessarily reflect the present or future values of the properties. If a project is abandoned or when events or circumstances indicate that the carrying value may not be recovered, capitalized costs, associated with the project, are written down at the time of the determination.

(d)

Impairment of long-lived assets: The Company assesses the impairment of long-lived assets, which consist of mineral properties, notes and other long-term receivables and furniture, equipment and leasehold improvements, whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. The recovery of capitalized costs of mineral properties is dependent upon the existence of economically recoverable reserves, the ability of the Company to obtain the necessary financing to develop the project to profitability or the proceeds from the disposition of the property.

(e)

Asset retirement obligations: The fair value of a liability for an asset retirement obligation, such as site reclamation costs, is recognized in the period in which it is incurred if a reasonable estimate of the fair value of the costs to be incurred can be made. The Company is required to record the estimated present value of future cash flows associated with site reclamation as a liability when the liability is incurred and increase the carrying value of the related assets for that amount. Subsequently, these capitalized asset retirement costs will be amortized to expense over the life of the related assets using the unit-of-production method. At the end of each period, the liability is increased to reflect the passage of time (accretion expense) and increased or decreased for changes in the estimated future cash flows underlying any initial fair value measurements.

(f)

Stock-based compensation: The Company has two stock-based compensation plans which are described in note 8(c) and 8(f). The Company accounts for all stock-based payments and awards under the fair value based method. Under the fair value based method, stock-based payments to non-employees are measured at the fair value of the consideration received, or the fair value of the equity instruments issued, whichever is more reliably measurable. The fair value of stock-based payments to non-employees is periodically re-measured until counterparty performance is complete, and any change therein is recognized over the vesting period of the award and in the same manner as if the Company had paid cash instead of paying with or using equity instruments. The cost of stock-based payments to non-employees that are fully vested and non-forfeitable at the grant date is measured and recognized at that date. Compensation cost attributable to awards to employees is measured at fair value at the grant date and

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

recognized over the vesting period. Compensation cost attributable to awards to employees that call for settlement in cash or other assets is measured at intrinsic value and recognized over the vesting period. Changes in intrinsic value between the grant date and the measurement date result in a change in the measure of compensation cost. Compensation cost is generally recognized on a straight-line basis over the vesting period. (g) Earnings (loss) per share: The Company calculates basic earnings (loss) per share using the weighted average number of common shares outstanding during the period. Diluted net earnings (loss) per share are calculated using the treasury stock method for stock options, warrants and RSUs. Under the treasury stock method, the weighted average number of common shares outstanding assumes that the proceeds to be received on the exercise of dilutive stock options and warrants are applied to repurchase common shares at the average market price for the period in calculating the net dilution impact. Stock options, warrants and RSUs are dilutive when the Company has income from continuing operations and the average market price of the common shares during the period exceeds the exercise price of the options and warrants. For all periods presented, diluted loss per share is the same as basic loss per share as the stock options, warrants and RSUs outstanding are anti-dilutive. For convertible notes, the number of additional shares for inclusion in diluted earnings per share calculations is determined using the as if converted method. The incremental number of common shares issued is included in the number of weighted average shares outstanding and interest on the convertible notes is excluded from the calculation of net income. For all periods presented, diluted loss per share is the same as basic loss per share as the convertible notes are anti-dilutive. (h) Foreign currency transactions: The functional currency of the Company and its subsidiary is the Canadian dollar. Monetary assets and liabilities denominated in a foreign currency are translated into Canadian dollars at the rate of exchange prevailing at the balance sheet date. Non-monetary items are translated at rates of exchange in effect when the amounts were acquired or obligations incurred. Revenue and expenses are translated at rates in effect at the time of the transaction. Foreign exchange gains and losses are recognized in the determination of net earnings (loss) in the period in which they arise. (i) Measurement uncertainty: The presentation of financial statements requires management to make estimates and assumptions which affect the reported amounts of assets and liabilities, and the disclosure of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Significant areas requiring the use of estimates include the assessment of impairment of long-lived assets including mineral properties, impairment of investments and receivables, amortization periods of furniture, equipment and leasehold improvements, valuation of stock-based compensation, and the estimation of future income tax asset valuation allowances. Actual results could differ from those estimates. (j) Income taxes: The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, future tax assets and liabilities are recognized for the future tax consequences

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Future tax assets and liabilities are measured using enacted or substantively enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on future tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The amount of future income tax assets recognized is limited to the amount that is more likely than not to be realized. (k) Transaction costs: Transaction costs are incremental costs that are directly attributable to the acquisition of a financial asset or financial liability. Transaction costs are included with the carrying amounts of the financial asset or financial liability on initial recognition and amortized using the effective interest method. (l) Financial instruments: The Company has designated its cash as held-for-trading, which are measured at fair value. Financial instruments included in amounts receivable are classified as loans and receivables, which are measured at amortized cost. The Company has designated long-term investments as available for sale. (m) Comparative figures: Certain comparative figures have been reclassified to conform to the presentation adopted in the current period. (n) Change in accounting policies: Effective July 1, 2008, the Company adopted the provisions of the following new Canadian Institute of Chartered Accountants (CICA) accounting standards: i Capital Disclosures Handbook Section 1535, Capital Disclosures, establishes standards for disclosing information about an entitys capital and how it is managed. The entitys disclosure should include information about its objectives, policies and processes for managing capital and disclose whether or not it has complied and the consequences of non-compliance with any capital requirements to which it is subject. The new disclosures resulting from the adoption of this standard is included in note 14. ii Mining Exploration Costs In March 2009, the CICA issued EIC Abstract 174 - Mining Exploration Costs (EIC-174) which supersedes EIC Abstract 126 -Accounting by Mining Enterprises for Exploration Costs (EIC -126), to provide additional guidance for mining exploration enterprises on the accounting for capitalization of exploration costs and when an impairment test of these costs is required. EIC 174 is applicable for the Companys annual consolidated financial statements for its fiscal year ending June 30, 2009, with retroactive application. The adoption of EIC 174 did not result in a material impact on the Companys consolidated financial statements. Financial Instruments Disclosures and Financial Instruments Presentation I iii In December 2006, the CICA issued Handbook Section 3862 Financial Instruments Disclosures and

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

Section 3863 Financial Instruments Presentation. Section 3862 modifies the disclosure requirements of Section 3861 Financial Instruments - Disclosures and Presentation including required disclosure of the assessment of the significance of financial instruments for an entitys financial position and performance; and of the extent of risks arising from financial instruments to which the Company is exposed and how the Company manages those risks. The new disclosures resulting from the adoption of this standard is included in note 10. iv The Canadian Institute of Chartered Accountants (CICA) issued the following accounting standards : Goodwill and Intangible Assets In November 2007, the CICA approved Section 3064 addressing when an internally developed intangible asset meets the criteria for recognition as an asset. This section is effective for fiscal years beginning on or after October 1, 2008. The Company does not expect the adoption to have a significant effect on the consolidated financial statements. In June 2009, the CICA amended Section 3862, Financial Instruments Disclosures that includes additional disclosure requirements about fair value measurement for financial instruments and liquidity risk disclosures. These amendments entail a three-level hierarchy that takes into account the significance of the inputs used in making the fair value measurements. The amendments to Section 3862 apply for annual financial statements relating to fiscal years ending after September 30, 2009. The Company has not yet adopted the disclosure requirements of this standard and does not expect them to have a material impact on the Company's consolidated financial statements. Business Combinations ("Section 1582"), This new standards will be effective for fiscal years beginning on or after January 1, 2011. The Company is in the process of evaluating the requirement and impact to the consolidated financial statements of the new standard. Section 1582 replaces Section 1581, Business Combinations, and establishes standards for the accounting for a business combination. It provides the Canadian equivalent to International Financial Reporting Standards ("IFRS") 3, Business Combinations. The section applies prospectively to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after January 1, 2011. Section 1601, Consolidated Financial Statements ("Section 1601"), and Section 1602, Non-Controlling Interest ("Section 1602").Sections 1601 and 1602 together replace Section 1600, Consolidated Financial Statements. Section 1601 establishes standards for the preparation of consolidated financial statements. Section 1601 applies to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011. Section 1602 establishes standards for accounting for a non-controlling interest in a subsidiary in consolidated financial statements subsequent to a business combination. It is equivalent to the corresponding provisions of IAS 27, Consolidated and Separate Financial Statements, and applies to interim and annual consolidated financial statements relating to fiscal years beginning on or after January 1, 2011. The Company is in the process of evaluating the impact to the consolidated financial statements of the two new standards.

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

3.

Receivables: December 31, 2009 Value added tax Peru (i) Other receivables $ $ 289,844 78,800 368,644 $ $ June 30, 2009 1,695,920 74,893 1,770,813

(i)

The Company incurs value added tax (VAT) in Peru. Effective August 29, 2006 the Company entered into an agreement with the Ministry of Energy and Mines to recover such amounts incurred after that date on an accelerated basis. The Company had successfully renewed the agreement annually up to and including March 31, 2009. The Company has been informed by the Peruvian Government that agreements of this nature will not be renewed after this time. VAT paid related to mineral property expenditures prior to August 29, 2006, balances determined to be outside of the scope of the agreement during the tenure of the agreement, and VAT which has been paid during the period April 1, 2009 to December 31, 2009, amounting to $3 million, are deemed recoverable only when future sales revenues are earned from the related mineral properties, by offsetting the VAT otherwise payable at that time. Due to the uncertainty of the recoverability of these amounts, the Company has recognized a full provision against their value.

4.

Long-term Investments As at June 30, 2009, the Company held a $7 million investment in long-term notes issued by a trust set up during the restructuring of the secured debt obligations, commonly known as Asset Backed Commercial Paper (ABCP). In August 2007, a number of sponsors of non -bank managed ABCP, including those with which the Company had invested, announced that they could not place ABCP due to unfavourable conditions in the Canadian capital markets. As a result, the affected ABCP funds were subject to a plan of arrangement (the Plan) restructuring the ABCP into new, long -term notes. The Plan obtained court approval from the Ontario Superior Court of Justice in June 2008 and was implemented in January 2009. The breakdown of the new notes allocated to ABCP holders was determined by the relative value of the underlying assets that each trust contributed. The Companys ABCP was contained in Structured Investment Trust III Series A and has been replaced with five new notes according to the following table: Security CLASS A-1 CLASS A-2 CLASS B CLASS C CLASS 15 $ $ $ $ $ $ 4,700,000 1,200,000 200,000 200,000 700,000 7,000,000

Based on a fair value estimation of the recoverability of the investments, management calculated the fair value of its holdings of ABCP as $3.6 million and has recorded a provision for impairment of $3.5 million to June 30, 2009. The Company received $0.3 million in interest in the previous fiscal year and this was

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

recognized as a credit to the estimated fair value of the asset on the balance sheet as at June 30, 2009. In the current fiscal year, the Company disposed of its holdings of Class A-1 and Class A-2 notes for proceeds of $3.2 million. As there appeared to be no evidence of certainty that, either holding or disposing of the remaining Class B, C and 15 notes, would result in a recovery of the estimated fair value, at June 30, 2009, a full provision was recorded against value of the remaining notes. In December 2009, the Company disposed of the Class 15 notes for proceeds of $0.5 million and recorded a gain on the statement of operations. Management will continue to monitor the situation and seek to maximize returns on the investment in the remaining Class B and C notes.

5.

Equipment and leasehold improvements: Accumulated amortization $ 128,373 2,395 280,794 411,562 Accumulated amortization $ 116,470 1,854 243,904 362,228 $ $ Net book value 60,293 4,071 310,271 374,635 Net book value 68,387 4,612 344,849 417,848

December 31, 2009 Computers Vehicle Furniture and office equipment $

Cost 188,666 6,466 591,065 786,197

June 30, 2009 Computers Vehicle Furniture and office equipment $

Cost 184,857 6,466 588,753 780,076

$ 6. Mineral properties: Constancia Project, Peru Mineral properties (i) Asset retirement obligation (note 12) Surface rights (ii)

December 31, 2009 9,395,469 598,200 5,502,951 15,496,620

June 30, 2009 9,395,469 598,200 5,502,951 15,496,620

(i)

Constancia Project: The Company holds a 100% interest in the Constancia copper-silver-gold-molybdenum porphyry deposit located in Chumbivilcas Province, Peru (Constancia). On February 9, 2005, the Company signed an agreement with Rio Tinto Mining and Exploration Ltd. (Rio Tinto) whereby the Company obtained the right to acquire up to a 70% interest in Constancia. An initial option, within the agreement, allowed the Company to earn an undivided 51% interest in the Constancia project by making payments of US$5,000,000, completing work expenditures of US$7,800,000 and issuing 1,250,000 common shares of the Company (or cash in lieu of shares) over

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

a period of nearly five years, ending October 31, 2009. During the year ended June 30, 2008, the Company issued 500,000 shares to Rio Tinto with a fair value of $2.70 per share and paid US$3,600,000 to fulfill all requirements pursuant to this initial option. The Company exercised the initial option in November 2007 and acquired a 51% interest in Constancia. Under the same agreement, upon exercise of the initial option, Rio Tinto had a 60-day right to claw back an undivided 17% interest if, in the reasonable opinion of Rio Tinto, global resource estimates for the property were not less than four million tonnes of copper, by paying the Company up to 300% of the Companys net cash payments (including cash payments, work expenditures and share issuances) on the project. In January 2008, Rio Tinto notified the Company that it would not be exercising its claw back right. Also under the same agreement, a subsequent and final option allowed the Company to earn an additional 19% interest in Constancia by paying Rio Tinto US$8,000,000. In March, 2008 the Company paid Rio Tinto US$8,000,000 and exercised the final option of the agreement acquiring the remaining 19% interest in Constantia. Upon commencement of commercial production, the Company is required to make a final one-time payment of US$500,000 to Rio Tinto and will pay a net smelter return royalty (NSR) of 0.5% to a maximum of US$10,000,000 to the previous underlying owners. In November 2007, Norsemont entered into a Mining Concessions Transfer Agreement and Assignment of Contractual Positions with Mitsui Mining and Smelting Company Limited (Mitsui). Pursuant to the agreement, Mitsui transferred its 30% interest in the Constancia property to Norsemont for a total consideration of US$9.8 million. Norsemont has paid Mitsui in full and there are no further obligations to Mitsui or the underlying owners of the property. Combined with the Companys 70% interest in the Constancia project obtained from Rio Tinto, the purchase provided Norsemont with the control of 100% of the Constancia project. This purchase has been capitalized to mineral properties on the balance sheet as at December 31, 2009. Annually, Norsemont Peru renews its surface rights lease agreements with two Peruvian communities to gain access to the surface of the Constancia Property for its mining exploration activities for a total cash monthly lease cost of approximately US$6,000. The two leases have twelve-month terms and are renewable at the end of each term for an additional twelve months. One of two agreements has been finalized for the current year and the second is being renegotiated. In addition to making cash rental payments to the communities, the Company is obligated, under the existing agreements, to provide educational assistance, medical and veterinary services as well as an irrigation system in each of the communities. These obligations approximate US$25,000 monthly (ii) During the year ended June 30, 2009, the Company purchased 1,443 hectares of land from private property owners within the Constancia Project, securing permanent surface rights for $2,825,000. During the year ended June 30, 2008, the Company purchased 1,583 hectares of land from three private property owners within the Constancia Project, securing permanent surface rights for $1,525,000.

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

7.

Long-term debt convertible notes: Unsecured convertible promissory notes: On December 19, 2008, the Company issued a convertible, unsecured promissory note (Note 1) and 1,764,706 warrants for an aggregate principal amount of $6 million. Note 1 has a principal amount of $6,000,000, bears interest at a rate of 8% per annum and is convertible by the holders into common shares of the Company at any time up to December 19, 2011 at a conversion price of $1.70 per share. Each whole warrant entitles the note-holder to purchase one common share of the Company at a price of $2.05 per share at any time until December 19, 2010. Note 1 does not allow forced conversion by the Company; however, the Company can fully prepay principal and accrued interest at any time after December 19, 2009. The Company has allocated $4 million of the $6 million fair value as a liability based on the fair value of a similar debt instrument without an associated conversion option. $2 million has been allocated to the fair value of the warrants ($1.17 million) and the conversion option ($0.83 million). On March 31, 2009, the Company issued a convertible, unsecured promissory note (Note 2) and 1,117,647 warrants for an aggregate principal amount of $3.8 million to an existing shareholder of the Company. Note 2 has a principal amount of $3,800,000 and bears interest at a rate of 8% per annum. Principal is convertible by the holder into common shares of the Company at any time up to March 31, 2012 at a conversion price of $1.70 per share. Interest on Note 2 is convertible by the holder into common shares of the Company at prevailing market prices less allowable discounts to market. Note 2 does not allow forced conversion by the Company however, the Company can fully prepay principal and accrued interest at any time after March 31, 2010. The Company has allocated $2.6 million of the $3.8 million fair value as a liability based on the fair value of a similar debt instrument without an associated conversion option. $1.2 million has been allocated to equity for the fair value of the warrants ($0.65 million) and the conversion option ($0.55 million). If both Note 1 and Note 2 were converted on December 31, 2009 and settlement occurred on December 31, 2009, the Company would have issued 5,764,706 common shares with an aggregate fair value of approximately $11.8 million based on the closing share price on December 31, 2009.

The notes are classified as compound financial instruments for accounting purposes because of the holder conversion option. For Note 1 interest is payable in arrears in annual installments on December 31 of 2009 and 2010 and a final interest payment on Dec ember 19, 2011. Note 2s interest schedule is December 31, 2009, 2010 and 2011 and a final payment on March 31, 2012. The Company issued 440,751 common shares to the note-holders in full settlement of accrued interest of $0.7 million, on both notes, to December 31, 2009. The liability component of the two notes is being accreted over the expected term to maturity using the effective interest method. The current year interest and accretion charge of $0.4 million is

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

reflected in the statement of operations for the quarter ended December 31, 2009.

8.

Share capital: (a) Authorized: Unlimited number of common shares without par value (b) (i) Unit issuances In July 2008, the Company completed a non-brokered private placement of 3,000,200 units at $4.00 per unit for gross proceeds of $12 million. Each unit consisted of one common share and one-half of one common share purchase warrant. Each whole share purchase warrant entitles the holder to acquire one additional common share at an exercise price of $4.50 per common share for a period of two years expiring July, 2010. As at June 30, 2008, the Company had collected $6.2 million of the $12 million proceeds and these funds are reflected in cash and cash equivalents and share issuance obligation on the June 30, 2008 balance sheet. The remaining $5.8 million was collected in July 2008, prior to the close of the financing, and the units were issued to investors. (ii) On December 19, 2008, the Company issued a convertible, unsecured promissory note ( Note 1) and 1,764,706 warrants for an aggregate principal amount of $6 million. The Note has a principal amount of $6,000,000, bears interest at a rate of 8% per annum and is convertible by the holders into common shares of the Company at any time up to December 19, 2011 at a conversion price of $1.70 per share. Each whole warrant will entitle the shareholder to purchase one common share of the Company at a price of $2.05 per share at any time until December 19, 2010. The Company has allocated $4.0 million of the $6 million fair value as a liability based on the fair value of a similar debt instrument without an associated conversion option. $2 million has been allocated to equity for the fair value of the warrants ($1.17 million) and the conversion option ($0.83 million). (iii) On March 31, 2009, the Company issued a convertible, unsecured promissory note (Note 2) and 1,117,647 warrants for an aggregate principal amount of $3.8 million to an existing shareholder of the Company. Note 2 has a principal amount of $3,800,000 and bears interest at a rate of 8% per annum. Principal is convertible by the holder into common shares of the Company at any time up to March 31, 2012 at a conversion price of $1.70 per share. Interest on Note 2 is convertible by the holder into common shares of the Company at prevailing market prices less allowable discounts to market. Note 2 does not allow forced conversion by the Company, however the Company can fully prepay principal and accrued interest at any time after March 31, 2010. Each whole warrant will entitle the holder to purchase one common share of the Company at a price of $2.05 per share at any time until March 31, 2011. The Company has allocated $2.6 million of the $3.8 million fair value as a liability based on the fair value of a similar debt instrument without an associated conversion option. $1.2 million has been allocated to equity for the fair value of the warrants ($0.65 million) and the conversion option ($0.55 million). (iv) In March and April 2009, the Company completed a private placement of units made up of common

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

shares and warrants. 6,364,706 units comprising one common share and one-half of one common share purchase warrant were placed at a price of $1.60 per unit for gross proceeds of $10.2 million. Each whole share purchase warrant entitles the holder to acquire one additional common share at an exercise price of $1.90 per common share for a period of two years expiring in 2011. (v) On June 26, 2009, the Company completed a rights offering to holders of its common shares of record at the close of business on June 1, 2009. Shareholders received one right for each common share held. Six rights entitled the holder to purchase one Unit at a price of $1.60 per unit. Each unit was comprised of one common share and one-half of a common share purchase warrant. Each whole warrant entitles the holder to purchase one common share for a term of two years at a price of $1.90. An aggregate of 9,746,760 units, each unit comprising of one common share and one-half of one warrant, were issued and $15.5 million of gross proceeds were raised. (vi) In November 2009 the Company issued 9,792,250 Units (the Units) consisting of 9,792,250 common shares and 4,896,125 common share purchase warrants at a price of $2.35 per Unit, representing an aggregate issue amount of $23 million. Each whole warrant is exercisable for one common share at an exercise price of $2.75 per share on or before April 30, 2011. (vii) During the six months ended December 31, 2009, 9,900 options were exercised for proceeds of $10,494. During the year ended June 30, 2009, 53,333 options were exercised for proceeds of $66,200.

(c)

Stock options: The Company established a stock option plan under which the Company may grant incentive stock options for the purchase of common shares of the Company to its officers, directors, and consultants. Stock options are non-transferable and the aggregate number of shares that may be reserved for issuance pursuant to stock options may not exceed certain levels and may not exceed 5% to any individual (maximum of 2% to any consultant). During the year ended June 30, 2008, shareholders of the Company approved an amendment to the plan from a fixed plan with an authorized number of shares of 5,222,526 to a plan allowing for a maximum of 20% of the issued and outstanding shares authorized for issuance. The exercise price of options is determined by the Board of Directors at the time of grant, but cannot be less than the volume weighted average trading price of the Companys shares for the 5 trading days immediately preceding the date the option is granted. As determined by the Board of Directors, options may vest immediately, in installments or pursuant to a vesting schedule, 1/3 on date of grant, 1/3 on the first anniversary and 1/3 on the second anniversary of the grant. Once vested, options are exercisable at any time. Options have a maximum term of five years and terminate ninety days from the date of termination of the optionees employment or such longer period as determined by the Board, provided that no option shall remain outstanding for any period which exceeds the later of the expiry date of the option and 36 months following the termination date. In addition, the Board may delegate authority to the Chief Executive Officer to make any determination with respect to vesting of options held by any departing employee, other than the Chief Executive Officer.

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

A summary of the status of the options outstanding follows: Number of options Balance, June 30, 2008 Granted Exercised Cancelled/expired , Balance, June 30, 2009 Granted Exercised Cancelled/expired Balance, December 31, , 2009 6,655,941 5,155,000 (53,333) (33,333) 11,724,275 9,900 11,714,375 Weighted average exercise price $ 1.86 2.68 1.24 1.53 2.23 1.06 2.23

The following table summarizes the stock options outstanding and exercisable at December 31, 2009: Number of shares 74,375 140,000 260,000 140,000 300,000 150,000 500,000 1,240,000 230,000 2,050,000 400,000 200,000 300,000 50,000 125,000 100,000 100,000 200,000 2,305,000 150,000 2,700,000 11,714,375 Exercise price $1.00 $1.06 $1.33 $2.38 $4.00 $2.00 $2.00 $1.60 $1.60 $1.62 $1.57 $1.72 $1.77 $1.68 $1.77 $2.90 $2.77 $4.04 $4.00 $1.88 $1.60 Expiry date July 28, 2010 August 17, 2010 August 21, 2010 September 9, 2010 April 13, 2011 July 7, 2011 July 24, 2011 December 10, 2011 April 25, 2012 June 1, 2012 June 25, 2012 July 19, 2012 July 26, 2012 September 24, 2012 October 1, 2012 Feb 13, 2013 Feb 20, 2013 June 1, 2013 August 7, 2013 November 18, 2013 June 29, 2014 Exercisable 74,375 140,000 260,000 140,000 300,000 150,000 500,000 1,240,000 230,000 2,050,000 400,000 200,000 300,000 50,000 125,000 66,667 66,667 200,000 1,536,667 100,000 2,133,333 10,262,708

During the six months ended December 31, 2009, $977,623 (2008 $2,368,650) in compensation expense under the fair-value-based method, related to the stock option and RSU plans, was recorded in the consolidated statements of operations. The compensation costs reflected in these consolidated financial statements were calculated using the Black-Scholes option pricing model using the following weighted average assumptions:

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

2009 Risk free interest rate Expected dividend yield Stock price volatility Expected life of options 2.43% 0% 74% 3 years

2008 3.08% 0% 73% 3 years

No options were granted during the six months ended December 31, 2009. The weighted average fair value of options granted during the six months year ended December 31, 2008 was $1.61 per option. Option pricing models require the input of highly substantive assumptions, including expected term to exercise and stock price volatility. Changes in assumptions can materially impact fair value estimates. (d) Warrants The following is a summary of warrants outstanding at December 31, 2009: Number of Warrants 1,975,000 1,731,035 1,500,100 1,764,706 858,875 15,575 1,117,647 625,000 43,750 1,325,000 373,478 196,175 4,873,380 1,454 4,257,500 638,625 21,297,300 (i) In August 2009, the Company extended the expiry date of 1,975,000 warrants with an exercise price of $1.95, originally expiring on July 19, 2009, to January 19, 2010. The fair value of the extension of $327,258 was charged to retained earnings in the first fiscal quarter of the 2010. Subsequent to the current quarter end, in January 2010, 1,125,000 of these warrants were exercised $ Exercise price 1.95 3.50 4.50 2.05 1.90 1.70 2.05 1.90 1.70 1.90 1.90 1.70 1.90 1.90 2.75 2.75 Expiry date July 19, 2009 (i) February 21, 2010 July 10, 2010 December 19. 2010 March 31, 20011 March 31, 20011 March 31, 20011 April 1, 2011 April 1, 2011 April 2, 2011 April 3, 2011 April 3, 2011 June 29, 2011 September 30, 2011 April 30, 2011 April 30, 2011

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

and 1,125,000 shares were issued upon receipt of $2.2 million. 850,000 warrants expired unexercised. The exercises and expiries will be accounted for in the third fiscal quarter of 2010. The warrant values reflected in these consolidated financial statements were calculated using the Black-Scholes option pricing model using the following weighted average assumptions: Fiscal 2010 Risk free interest rate Expected dividend yield Stock price volatility Expected life of options 0.99% 0% 87.30% 1.54 years Fiscal 2009 3.15% 0% 66.13% 2 years

(e)

Shareholder rights plan: The Directors of the Company approved the adoption of a shareholder rights plan, dated May 29, 2006, (the Rights Plan). The objective of the Board of Directors in adopting this Plan is to achieve full and fair value for the Companys shareholders in the event of an unsolicited take-over bid for the Company. The rights become exercisable only when a person or party acquires or announces its intention to acquire 20 per cent or more of the outstanding shares of the Company without complying with certain provisions of the Rights Plan. Each right would entitle each holder of common shares (other than the acquiring person or party) to purchase additional common shares of the Company at a 50 per cent discount to the market price at the time.

(f)

Restricted stock unit incentive plan: On September 24, 2007, the Board of Directors adopted a Restricted Stock Unit Incentive Plan (Restricted Stock Plan) and received shareholder approval on November 7, 2007. The employees, officers and directors of the Company, other than the Chairman and Chief Executive Officer of the Company are eligible to participate in the Restricted Stock Plan. The Restricted Stock Plan allows the Company the authority to issue common shares for no consideration. Furthermore, restricted stock units (RSUs) may also be granted to such other persons, other than the Chairman and the Chief Executive Officer of the Company, as determined to be in the best interests of the Company by the Board of Directors. The Restricted Stock Plan has a term of 10 years, subject to amendment of the term by the Board of Directors. RSUs shall vest within 3 years of the award grant date. Subject to the terms and conditions of an award agreement, vesting may be accelerated by achieving performance targets, but shall not occur prior to the expiry of one year following the award grant date. The vesting of RSUs granted to independent directors is subject to an election that must be made at the time the RSU is granted whereby the RSUs will either (a) vest within a minimum of one and a maximum of three years following the award grant date or (b) upon the independent director s resignation from the Board. The maximum number of the Companys common shares available for issuance upon the vesting of RSUs is 1,000,000 common shares. This represents approximately 2% of the issued and outstanding

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

common shares of the Company. The maximum number of shares issuable to insiders of the Company under all security-based compensation arrangements, including the Restricted Stock Plan, at any time cannot exceed 10% of the issued and outstanding common shares of the Company and the number of securities to be issued to insiders of the Company pursuant to such arrangements within any one-year period, cannot exceed 10% of the issued and outstanding common shares of the Company. Upon the termination of the employee, officer or director service with the Company, any RSUs held by such individual that have not vested within 30 days of such termination, shall be deemed forfeited. The Company accounts for the issuance of RSUs under the fair-value-based method, whereby the market value of the common shares of the Company, on the date the RSU is granted, is used to calculate compensation expense. During the six months ended December 31, 2009, 109,500 RSUs were issued to employees in Peru. The compensation costs reflected in these consolidated financial statements were calculated using the market value of the Companys shares on the grant date. The value has been charged to the statement of operations in the current year.

9.

Related party transactions: During the six months ended December 31, 2009, the Company paid $ 118,350 (2008 - $ 45,500) for legal fees to a company controlled by an officer of the Company. There remained no liability to this related party as at December 31, 2009. Related-party transactions are in the normal course of operations and have been recorded at the exchange amounts agreed between the Company and related party.

10.

Financial instruments: (a) Fair values of financial instruments: For certain of the Companys financial instruments, including cash and cash equivalents, short -term, receivables, long term investments and accounts payable and accrued liabilities, the carrying amounts approximate fair value due to the short-term nature of the financial instruments. Fair value adjustments associated with receivables, long-term receivables, long term investments, convertible debt and asset retirement obligations are discussed in notes 3, 4, 9 and 12 respectively. (b) Foreign currency risk: The Company conducts a major part of its business in US dollars and Peruvian New Sol and therefore is affected by variations in exchange rates. The Company holds minimal cash reserves in any foreign currency at any given time but does have a significant Peruvian New Soles denominated value added tax (IGV) receivable. Foreign exchange rates between the Canadian dollar and Peruvian New Soles have been relatively stable over the last several years ranging in rates of 2.7 to 3 New Soles to the Canadian dollar. Wider fluctuations are not expected but difficult to estimate. Management believes the

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

foreign exchange risk derived from currency conversions of this receivable and other financial instruments are not significant to its operations and therefore does not hedge its foreign exchange risk.

(c)

Credit risk: Credit risk reflects the risk that the Company may be unable to recover contractual receivables. The Company significant receivable risks are the recovery of IGV (Peruvian value added tax) and the recovery of investments held in MAV ll, both senior notes (Class A-1 and A-2) and junior notes (Class B, C and 15). The Company has no significant concentration of credit risk arising from operations. Financial instruments included in receivables consist of goods and services tax due from the Federal Government of Canada and the Peruvian Government (IGV). Management believes that the risk of loss with respect to financial instruments included in amounts receivable to be minimal as both governments have demonstrated recurring refunds under the value added tax systems. The risk associated with the recovery of long-term investments has been deemed to be significant and fair value adjustments related to their carrying costs are discussed in note 4.

(d)

Liquidity risk: The Company's approach to managing liquidity risk is to ensure that it will have sufficient liquidity to meet liabilities when due. As at December 31, 2009, the Company had cash balances of $27.4 million (December 31, 2008 - $7.9 million) to settle current liabilities of $1.7 million (December 31, 2008 $12.0 million). All of the Company's financial liabilities have contractual maturities of 30 days and are subject to normal trade terms.

(e)

Market (interest rate) risk: The Company has cash balances and only fixed interest-bearing debt and fluctuations in market rates currently do not affect future cash flows.

Sensitivity Analysis The Company has designated its cash as held-for-trading, which are measured at fair value. Financial instruments included in amounts receivable are classified as loans and receivables, which are measured at amortized cost. Accounts payable and accrued liabilities are classified as other financial liabilities, which are measured at amortized cost. As at December 31, 2009, the carrying and fair value amounts of the Company's financial instruments are the same. Based on management's knowledge and experience of the financial markets, the Company believes the following movements are "reasonably possible" over a year: (i) At December 31, 2009 the Company had IGV receivable denominated in Peruvian New Soles of 0.8 million, which with a 10% change in exchange rates, would affect net income by $0.01 million. At December 31, the Company had accounts payable denominated in Peruvian New Soles of 3.0 million, which with a 10% change in exchange rates, would affect net income by $0.3 million.

(ii)

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

11.

Commitments: a) The Company has a Vancouver office premise lease for approximately $10,500 per month expiring December 31, 2009. On January 1, 2008, the Company relocated its head office to Toronto, Ontario and has entered into an agreement that eliminates any further commitment on the lease. The Company entered into a 3 year lease in Toronto for $4,000 per month expiring in April 2011 and a lease in Lima, Peru for $13,000 per month also expiring in April 2011. b) The Company also has various commitments as described in note 6 related to mineral properties.

12.

Asset retirement obligations: The Companys asset retirement obligations relate to site -restoration and clean-up costs related to its Peruvian mineral properties. The accretion expense has been charged to the statement of operations for the three months ended December 31, 2009. A reconciliation of the provision for asset retirement obligations is as follows:

December 31, 2009 Balance - beginning of period Accretion expense June 30, 2009 fair value adjustment Balance, end of period $ 960,000 48,000 1,008,000 $

June 30, 2009 1,300,000 143,000 (483,000) 960,000

During the year ended June 30, 2009, a re-evaluation of future site restoration costs at Constancia was carried out and revealed that the area of disturbance estimated in the prior year was greater than determined currently. As such, the estimated fair value of the estimate was adjusted by $483,000. The provision for asset retirement obligations are based upon the following assumptions:

The total undiscounted cash flow required to settle the obligation is approximately $1,280,000; Asset retirement obligation payments are expected to occur during fiscal year 2012; A credit adjusted risk-free rate of 10% has been used to discount cash flows.

13.

Capital management: The Company relies on the advice and expertise of management to manage its capital structure. Management deems common shares, warrants, convertible notes and retained earnings (deficit) to be capital. Depending on working capital position, the Company adjusts its capital in order to sustain future development of the business, including the acquisition of mineral properties and advancing exploration and development of those properties. The Board of Directors and management have not established return on capital criteria.

NORSEMONT MINING INC.

Notes to Consolidated Financial Statements (Expressed in Canadian dollars) Three and six months ended December 31, 2009 and 2008 (Unaudited)

The Company is currently in the exploration stage with Constancia and as such the Company relies on external capital markets to finance and fund its activities. In order to carry out the planned exploration and pay for administrative costs, the Company will spend its existing working capital and raise additional amounts as needed. Management reviews its capital management approach on an ongoing basis and believes that this approach, given the relative size of the Company, is reasonable. The Company will continue to assess strategies and prospective properties in order to enhance the value of the Company and there were no changes in the Company's approach to capital management during the six months ended December 31, 2009. The Company is not subject to externally imposed capital requirements.