Seafield Resources Ltd V.SFF

RE: RE: RE: RE: Batero

[LuckyVP]

SEAFIELD RESOURCES LTD.

MANAGEMENT’S DISCUSSION AND ANALYSIS

FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011

Prepared by:

SEAFIELD RESOURCES LTD.

360 Bay Street, Suite 500

Toronto, Ontario M5H 2V6

Discussion dated August 25, 2011

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 2

Introduction

The following management’s discussion and analysis (“MD&A”) of the financial condition and results of

the operations of Seafield Resources Ltd. (“Seafield” or the “Company”) constitutes management’s review

of the factors that affected the Company’s financial and operating performance for the three and six

months ended June 30, 2011. This MD&A has been prepared in compliance with the requirements of

National Instrument 51-102 – Continuous Disclosure Obligations. This discussion should be read in

conjunction with the audited annual consolidated financial statements of the Company for the years

ended December 31, 2010 and December 31, 2009, as well as the unaudited condensed interim

consolidated financial statements for the three and six months ended June 30, 2011, together with the

notes thereto. Results are reported in Canadian dollars, unless otherwise noted. In the opinion of

management, all adjustments (which consist only of normal recurring adjustments) considered necessary

for a fair presentation have been included. The results for the interim periods presented are not

necessarily indicative of the results that may be expected for any future period. Information contained

herein is presented as at August 25, 2011, unless otherwise indicated.

On January 1, 2011, Seafield adopted International Financial Reporting Standards (“IFRS”). The

condensed unaudited interim consolidated financial statements for the three and six months ended June

30, 2011, have been prepared in accordance with International Accounting Standard 34, Interim Financial

Reporting (“IAS 34”), using accounting policies consistent with IFRS. Accordingly, they do not include all

of the information required for full annual financial statements required by IFRS as issued by the

International Accounting Standards Board (“IASB”) and interpretations of the International Financial

Reporting Interpretations Committee (“IFRIC”). Readers of this MD&A should refer to “Changes in

Accounting Policies” below for a discussion of IFRS and its effect on the Company’s financial

presentation.

The comparative financial information for 2010 in this MD&A has been restated to conform to IFRS,

unless otherwise stated.

For the purposes of preparing this MD&A, management, in conjunction with the Board of Directors,

considers the materiality of information. Information is considered material if: (i) such information results

in, or would reasonably be expected to result in, a significant change in the market price or value of

Seafield common shares; or (ii) there is a substantial likelihood that a reasonable investor would consider

it important in making an investment decision; or (iii) it would significantly alter the total mix of information

available to investors. Management, in conjunction with the Board of Directors, evaluates materiality with

reference to all relevant circumstances, including potential market sensitivity.

Further information about the Company and its operations is available on Seafield’s website at

www.sffresources.com or on SEDAR at www.sedar.com.

Cautionary Note Regarding Forward-Looking Information

This MD&A contains certain forward-looking information and forward-looking statements, as defined in

applicable securities laws (collectively referred to herein as “forward-looking statements”). These

statements relate to future events or the Company’s future performance. All statements other than

statements of historical fact are forward-looking statements. Often, but not always, forward-looking

statements can be identified by the use of words such as “plans”, “expects”, “is expected”, “budget”,

“scheduled”, “estimates”, “continues”, “forecasts”, “projects”, “predicts”, “intends”, “anticipates” or

“believes”, or variations of, or the negatives of, such words and phrases, or state that certain actions,

events or results “may”, “could”, “would”, “should”, “might” or “will” be taken, occur or be achieved.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 3

cause actual results to differ materially from those anticipated in such forward-looking statements. The

forward-looking statements in this MD&A speak only as of the date of this MD&A or as of the date

specified in such statement. Specifically, this MD&A includes, but is not limited to, forward-looking

statements regarding: the potential of Seafield’s properties to contain economic gold deposits; the

Company’s ability to meet its working capital needs at the current level for the twelve-month period

ending June 30, 2012; the plans, costs, timing and capital for future exploration and development of

Seafield’s property interests, including the costs and potential impact of complying with existing and

proposed laws and regulations; management’s outlook regarding future trends; sensitivity analysis on

financial instruments, which may vary from amounts disclosed; prices and price volatility for gold; and

general business and economic conditions.

Inherent in forward-looking statements are risks, uncertainties and other factors beyond Seafield’s ability

to predict or control. These risks, uncertainties and other factors include, but are not limited to, gold price

volatility, changes in debt and equity markets, timing and availability of external financing on acceptable

terms, the uncertainties involved in interpreting geological data and confirming title to recently acquired

properties, the possibility that future exploration results will not be consistent with Seafield’s expectations,

increases in costs, environmental compliance and changes in environmental and other local legislation

and regulation, interest rate and exchange rate fluctuations, changes in economic and political conditions

and other risks involved in the gold and development industry, as well as those risk factors listed in the

“Risks and Uncertainties” section below. Readers are cautioned that the foregoing list is not exhaustive of

the factors that may affect the forward-looking statements. Actual results and developments are likely to

differ, and may differ materially, from those expressed or implied by the forward-looking statements

contained in this MD&A. Such statements are based on a number of assumptions that may prove to be

incorrect, including, but not limited to, assumptions about the following: the availability of financing for

Seafield’s exploration and development activities; operating and exploration costs; the Company’s ability

to retain and attract skilled staff; timing of the receipt of regulatory and governmental approvals for

exploration projects and other operations; market competition; and general business and economic

conditions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may

cause Seafield’s actual results, performance or achievements to be materially different from any of its

future results, performance or achievements expressed or implied by forward-looking statements. All

forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should

not place undue reliance on forward-looking statements. The Company undertakes no obligation to

update publicly or otherwise revise any forward-looking statements whether as a result of new information

or future events or otherwise, except as may be required by law. If the Company does update one or

more forward-looking statements, no inference should be drawn that it will make additional updates with

respect to those or other forward-looking statements, unless required by law.

Description of Business

Seafield is an exploration company that is currently focused on gold exploration in Colombia, Mexico, and

Canada (Ontario). To date, the Company has not earned significant revenues from its mining properties

and is considered to be in the development stage.

The Company has no revenues, so its ability to ensure continuing operations is dependent on its

completing the acquisition of its mineral property interests, the discovery of economically recoverable

reserves, confirmation of its interest in the underlying mineral claims, and its ability to obtain necessary

financing to complete the exploration activities, development and future profitable production.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 4

Seafield's goal is to deliver superior returns to shareholders by concentrating on the acquisition of

properties that have the potential to contain gold. The Company currently plans to focus on certain

properties, as set out below under “Mineral Property Interests”.

Highlights

• On May 9, 2011, Mr. Cesar Lopez LL.M. accepted the position of Chief Executive Officer of

Seafield and has also been appointed a Director of the Company. In addition, Dr. Tom

Henricksen has accepted the position of Vice President, Exploration. Mr. Lopez replaces Anthony

Roodenburg as Chief Executive Officer, and Dr. Henricksen replaces Dr. James Pirie as VP

Exploration. Both Mr. Roodenburg and Dr. Pirie will remain as Directors of Seafield. Mr. Douglas

Wu has also been appointed to the Board of Directors of Seafield.

• On May 24, 2011, Seafield closed its private placement of 10,000,000 common shares priced at

.30 per share, for gross proceeds of $3,000,000. The shares were acquired by a single

strategic investor with a very positive long term view of the potential at Seafield’s Quinchia

projects in Colombia. The common shares that comprise the private placement will be subject to

a four-month hold period under applicable Canadian securities laws expiring on September 25,

2011. No fees or commissions are payable in connection with the private placement.

• On July 5, 2011, Seafield announced that SRK Consulting (SRK) through its Denver, Colorado

office, has been appointed to complete a preliminary economic assessment or scoping level

study, on Seafield’s Miraflores Property, located in the Quinchia District, Colombia. The purpose

of the study by SRK will be to evaluate the potential positive economics of developing an open-pit

and underground mining operation and to provide recommendations to advance the Miraflores

Project to a prefeasibility study. The Company plans to have a final scoping study report in Q1

2012.

• Seafield filed a National Instrument 43-101 compliant report dated July 8, 2011 has been filed in

support of the May 26, 2011 press release outlining the updated resource estimate at the

Company’s Miraflores Project. The NI 43-101 compliant resource includes a Measured and

Indicated resource of 1.2 Million ounces gold grading 0.9 g/t Au (44.7 Million tonnes at a cut-off of

0.3 g/t Au) and an Inferred resource of 354,512 ounces gold grading 0.9 g/t Au (12.2 Million

tonnes at a cut-off of 0.3 g/t Au). The report has been filed on SEDAR at www.sedar.com.

• On July 28, 2011, Seafield announced that it has mobilized a third diamond drill rig at its Quinchia

Project, Colombia. The drill will be used to further expedite the Phase II drill campaign currently

underway at the Company’s Miraflores target. The Phase II campaign at Miraflores commenced

July 7, 2011 and is expected to be completed by November, 2011 with 6,200 meters planned in

10 holes, with two drill rigs operating on the target. The second phase drill campaign’s purpose is

to better define the shape of the ore body, increase the resource confidence and extend

mineralization. The information provided from the drill campaign will serve as a basis for the

Company’s previously reported engagement of SRK Consulting to complete a scoping study at

Miraflores.

• Exploration and evaluation expenditures increased by $1,680,432 as work continued in the

quarter. See “Mineral Property Interests” below.

• At June 30, 2011, the Company had working capital of $18,184,890, compared to $18,714,852 at

December 31, 2010. The Company had cash of $18,448,039 at June 30, 2011, compared to

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 5

$19,110,000 at December 31, 2010. The net change in cash and working capital during the first

half of fiscal 2011, was primarily due to cash spent on exploration activities which was offset by

cash proceeds from the exercise of stock options and warrants. See “Liquidity and Financial

Position”, below.

Trends

The Company is a mineral exploration company, focused on the acquisition, exploration and development

of properties for the mining of gold. Seafield has exploration operations in Colombia, Mexico and Canada

(Ontario).

There are significant uncertainties regarding the price of gold and the availability of equity financing for

the purposes of exploration and development. The future performance of Seafield is largely tied to the

development of its gold properties and the overall financial markets. Financial markets are likely to be

volatile, reflecting ongoing concerns about the stability of the global economy and weakening global

growth prospects. Unprecedented uncertainty in the credit markets has also led to increased difficulties in

borrowing and raising funds. As a result, Seafield may have difficulties raising equity financing for the

purposes of gold exploration and development, particularly without excessively diluting the interests of

existing shareholders. These trends may limit the ability of Seafield to develop and/or further explore its

gold properties and any other property interests that may be acquired in the future.

Mineral Property Interests

The Company’s exploration activities are at an early stage, and it has not yet been determined whether its

properties contain an economic mineral reserve. There are no known deposits of minerals on any of the

Company’s exploration properties and any activities of the Company thereon will constitute exploratory

searches for minerals. See “Risks and Uncertainties” below.

Elora Project

(i) Description of Elora Project

The Company has completed the terms of the option agreement with Elora Gold Mines, Limited to earn

an 80% undivided interest in 14 patented parcels of mining land and one license of occupation located in

the Kenora Mining Division of Northwestern Ontario. Elora has also elected to convert its 20% interest in

the joint venture to a 2.5% net smelter return royalty. The Company now owns a 100% interest in the

property and is required to make annual advance royalty payments of $20,000.

(ii) Update on the Elora Project

During the first half of fiscal 2011, no significant exploration work was performed on the Elora project.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 6

(iii) Project Expenditures

The following table sets forth a breakdown of material components of exploration expenditures incurred at

the Elora project.

Exploration expenditures

Six Months

Ended

June 30,

2011

$

Six Months

Ended

June 30,

2010

$

Cumulative

to

June 30,

2011

$

Acquisition costs nil nil 240,000

Assays and analyses nil nil 18,627

Drilling 75 225 954,460

Consulting and studies nil nil 2,589

Claim maintenance nil nil 6,241

Other exploration and supplies nil nil 21,320

Geologists’ fees and costs nil 510 167,853

Salaries and wages nil nil 113,681

Travel and accommodation nil nil 60,621

Exploration expenditures 75 735 1,585,392

Budget

Following are the plans related to the Elora project, which is anticipated to be funded from existing funds.

Planned expenditures are as follows:

Project/Property

Name

Plans

for

Project

Planned

Expenditures

for calendar

2011

(approx.)

Timing for

Completion of

Planned

Activities

Elora Project (1) $70,000 (2) December 31,

2011 (3)

(1) Advance royalty payments of $20,000 and line cutting, geological mapping and sampling

estimated at $50,000;

(2) Discretionary, subject to change if management decides to scale back operations or accelerate

exploration; and

(3) The Company did not incur any expenditures towards its Elora budget in Q1 and Q2 (2011) due

to its concentration on its Colombian properties and limited staff availability.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 7

Minera Projects

(i) Description of Minera Projects

The Company owns a 100% interest in the silver-gold Picachos property in Durango State in Mexico

through its wholly owned subsidiary, Minera Tango SA. The Picachos property was subject to an option

whereby Northwestern Mineral Ventures Inc. had an exclusive option for a period of three years, expiring

on December 22, 2009, to acquire a 70% interest in the property by incurring certain expenditures (a total

of US$3,000,000 over the three-year term), issuing and delivering to Minera Yamana Inc. (“Yamana”) a

total of 1,000,000 common shares in the capital of Northwestern and paying to Yamana an aggregate

amount of US$400,000. The terms of the Picachos option remained in effect following the acquisition of

Minera by Seafield in December 2006.

Northwestern did not exercise the Picachos option on or prior to December 22, 2009, and, pursuant to the

terms of the option agreement, the Picachos option has expired. Pursuant to the share purchase

agreement between 4355377 Canada Inc. (now Minera Yamana Inc.), Seafield, Yamana and Minera

Tango as of December 29, 2006, Yamana retains an option to acquire 70% of the Picachos property at

any time for a nominal amount of consideration. The Company and Minera have the right to buy out the

Yamana option by paying to Yamana an amount of $450,000 or by issuing 1,500,000 common shares in

the capital of the Company.

On December 8, 2010, the Company announced that it had acquired the remaining 70% interest in

Picachos Property by issuing 1,500,000 common shares of Seafield (issued and valued at $906,000).

The Company now holds 100% interest in the Picachos Property, subject to a 1.75% net smelter return

royalty.

(ii) Update on the Minera Projects

During the second quarter ended June 30, 2011, the main expenditures consisted of assaying and office

compilation work. The Company assayed a large number of rock samples collected on an earlier

prospecting program. The data will be used to help target further fieldwork including drilling on some of

the known mineralized zones at Picachos.

(iii) Project Expenditures

The following table sets forth a breakdown of material components of exploration expenditures incurred at

the Minera projects.

Exploration expenditures

Six Months

Ended

June 30,

2011

$

Six Months

Ended

June 30,

2010

$

Cumulative

to

June 30,

2011

$

Acquisition costs nil nil 2,254,339

Administrative costs nil nil 4,185

Drilling nil nil 139,563

Assays and analyses 12,677 nil 136,604

Claim maintenance 52,744 45,782 189,600

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 8

Consultants and studies 2,831 9,453 267,775

Geologists’ fees and costs 10,489 nil 50,153

Travel and accommodation 1,640 2,844 231,649

Exploration expenditures 80,381 58,079 3,273,868

(iv) Budget

Following are the plans related to the Picachos property, which is anticipated to be funded from existing

funds. Planned expenditures are as follows:

Project/Property

Name

Plans

for

Project

Planned

Expenditures

for calendar

2011

(approx.)

Spent

(approx.)

Under

Spent

(approx.)

Timing for

Completion of

Planned

Activities

Picachos Property (1) $700,000 (2) $80,000 $620,000 December 31,

2011

(1) Claim maintenance fees of $100,000 and diamond drilling of $600,000; and

(2) Discretionary, subject to change if management decides to scale back operations or accelerate

exploration.

Colombian Properties

(i) Description of Colombian Properties

On March 5, 2010, Seafield signed a Definitive Agreement with privately owned CCGC whereby CCGC

assigned all right, title, and interest in and to the option of the Properties located in the Quinchia district of

Colombia.

Consideration paid by Seafield for the assignment and facilitating of the Properties consists of cash

payments to CCGC and issuances to CCGC of common shares of Seafield. Within five days of the

binding date of the individual option agreements documented in the Definitive Agreement, Seafield will

pay an aggregate amount totalling 5,000,000 common shares and US$250,000. On the first anniversary

of the binding date of two of the option agreements, Seafield may elect to continue the options and make

a final payment to CCGC on each property of US$125,000 and an additional 1,000,000 common shares

of Seafield. Seafield will also assume option payments on the underlying properties totalling

approximately US$6,250,000 over 30 months.

In addition, Seafield will undertake to make aggregate exploration expenditures of not less than

US$650,000 on the Properties during the 12-month period following the binding date of the first option

payment to certain property owners.

Seafield has also established consulting contracts with two directors of CCGC so that they can continue

to assist in managing and supervising the exploration program on the Quinchia project.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 9

On March 15, 2010, Seafield announced CCGC had assigned all rights, title and interest in one property

comprising two mining concession contracts and one concession contract proposal, as well as its interest

in an optioned package of 22 additional permits consisting of eight mining concession contracts and 14

concession contract proposals. The total land package consists of 25 concessions and covers an area of

6,283 hectares. Total consideration is 1.5 million shares (issued and valued at $427,500) of Seafield and

US$75,000 (paid) to CCGC and the assumption of option payments to underlying claim holders totalling

US$750,000 over two years.

On April 20, 2010, Seafield announced it had finalized an option agreement with the Association of

Miners of Miraflores ("AMM") to acquire 100% interest in the Miraflores property located in the Quinchia

district of Colombia. The Miraflores property consists of a 124-hectare mineral exploitation contract and

hosts the Miraflores gold deposit. AMM currently operates a small underground mine at Miraflores that

produces about eight tonnes per day.

At this same time, Seafield completed a National Instrument 43-101 compliant initial inferred resource on

the Miraflores deposit. An estimated 776,000 ounces of gold are contained in 18.65 million tonnes

grading 1.3 g/t gold at a cut-off grade of 0.5 g/t Au. The mineral resource estimate is based on 3,624

metres of drilling in ten diamond drill holes and 154 underground samples.

The Miraflores deposit occurs within a hydrothermal breccia body and is roughly circular in shape,

measuring some 280 metres by 250 metres in outcrop. It has been traced by drilling for over 600 metres

in vertical extent and remains open at depth. During the period 2005-2007, AngloGold Ashanti Limited

and B2Gold Corp. completed the diamond drilling and underground sampling and were successful in

delineating the significant low-grade large-tonnage Au-Ag deposit, which forms the current inferred

resource and is potentially amenable to bulk-tonnage mining and mineral extraction techniques.

The option agreement calls for cash payments of approximately US$1,500,000 in five payments over two

years and a final option payment of approximately US$1,500,000 within 30 months of the initial signing

date. In return for CCGC facilitating the option, Seafield issued to CCGC 2,000,000 common shares of

Seafield (issued and valued at $380,000) and paid US$100,000. Seafield has elected to continue with

the option after the first anniversary of signing the agreement, and therefore it has issued a further

1,000,000 common shares of Seafield and paid a further US$125,000 to CCGC.

At the date of this MD&A, Seafield owed an aggregate amount totaling 1,500,000 common shares and

US$75,000 to CCGC to complete the acquisition of the Properties.

The Properties lie within the Late Miocene mid-Cauca porphyry belt, which hosts a number of important

gold porphyries and porphyry-related deposits. The properties are located 8 km to the southwest of

Marmato where Medoro Resources Ltd. recently announced measured and indicated resources of 7.5

million ounces of gold and inferred resources of 2.23 million ounces of gold. In addition, the mid-Cauca

belt hosts the La Colosa deposit of AngloGold Ashanti, which contains an inferred resource of 12.9 million

ounces of gold (468.8Mt at 0.86 g/t Au), and the Titiribi prospect north of Quinchia where Sunward

Resources Ltd. recently announced an inferred resource of 3.7 million ounces of gold and 460,000 tonnes

of copper.

A number of gold-bearing porphyries are located in the Quinchia district, and they are generally quartz

dioritic in nature. Some of these have been drill tested and the highest gold grades were found to be

associated with the occurrence of hydrothermal magnetite. As a result, CCGC conducted an

aeromagnetic survey consisting of 750-line km and detected at least four potential porphyry targets, some

of which are coincident with significant gold geochemical anomalies in both rock and soil samples taken

by previous operators. In 2006, AngloGold Ashanti tested one of these magnetic anomaly targets,

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 10

located on the current Seafield land package in the Dosquebradas area, with two diamond drill holes and

intersected an important gold- bearing quartz diorite porphyry with the following results:

DDH-2 68 m @ 0.62 g/ t Au from 158 m to 226 m depth and

DDH-2 36 m @ 0.90 g/ t Au from 232 m to 268 m depth

DDH-3 90 m @ 0.63 g/ t Au from 140 m to 230 m depth and

DDH-3 39.5 m @ 1.67 g/ t Au from 230 m to 269.5m depth

The Quinchia district has excellent infrastructure, being located near the Pan American highway, three

and a half hours south of Medellin and one hour from Manizales. As well, it is on the national power grid

and adjacent to the new railway being built to connect to the Pacific Coast port of Buenaventura.

(ii) Update on the Colombian Projects

During the year ended December 30, 2010, the Company finalized the agreement with CCGC and

acquired two of three Quinchia area properties.

On April 20, 2010, Seafield announced that it had completed a National Instrument 43-101 compliant

initial inferred resource on the Miraflores deposit. At that time the deposit contained an inferred mineral

resource of 18.6 million tonnes grading 1.3 g/t gold at a cut-off grade of 0.5 g/t Au for a total of 776,373

ounces of gold. (At a cut-off of 0.3 g/t Au, the resource increases to 35 million tonnes grading 0.867 g/t Au

for a total of 976, 550 ounces of gold.) The mineral resource estimate was based on 3,624 metres of

drilling in ten diamond drill holes and 154 underground samples that were carried out during the period

2005-2007 by AngloGold Ashanti Limited and B2Gold Corp. The low-grade large-tonnage Au-Ag deposit

that forms the inferred resource is potentially amenable to open pit, bulk-tonnage mining and mineral

extraction techniques.

The Miraflores property is located within the Quinchia gold mining district and has been the site of

artisanal mining since pre-Colombian times. Mineralization in Quinchia is genetically linked to the

emplacement of a cluster of Miocene-aged porphyry bodies. Magmatic hydrothermal deposit types such

as Miraflores are associated with the cooling history of the porphyries. The Miraflores deposit occurs

within an intrusive and hydrothermal breccia body and is roughly circular in shape, measuring some 280

metres by 250 metres in outcrop. It has been traced by drilling for over 600 metres in vertical extent and

remains open at depth.

From late June to October, Seafield conducted a diamond drill program of 4,132 metres in 12 holes on

the Miraflores property to better delineate the extent of the breccia body that hosts the gold mineralization

and to expand the resource. Significant intersections from the program are listed in the table below.

Hole No. From (m) To (m)

Interval

(m) Au (g/t)

Au cut

to 20

g/t

QM-DH-01 70.70 82.90 12.20 0.66

139.80 218.00 78.20 0.48

264.50 270.50 6.00 0.59

390.90 402.90 12.00 0.38

425.50 437.00 11.50 0.45

QM-DH-02 19.15 329.70 310.55 0.37

inc 59.20 93.20 34.00 0.80

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 11

QM-DH-03 53.10 502.15 449.00 1.29 1.03

inc 231.85 241.85 10.00 2.87

and 282.55 306.50 23.95 9.18 4.67

QM-DH-04 27.55 111.70 84.15 0.46

inc 66.00 105.70 39.70 0.76

123.30 201.30 78.00 0.57

inc 127.30 168.30 41.00 0.94

QM-DH-05 63.50 73.05 11.55 0.53

QM-DH-06 52.50 71.80 19.30 0.30

QM-DH-07 40.50 66.70 26.20 0.41

QM-DH-08 161.00 163.65 2.65 1.08

QM-DH-09 3.70 258.80 255.00 0.49

inc 3.70 49.00 45.30 0.56

and 93.10 131.00 37.90 0.87

inc 101.00 118.70 17.70 1.23

and 149.00 207.00 58.00 0.72

QM-DH-10 1.60 245.30 243.70 0.47

inc 1.60 144.40 142.80 0.63

and 160.60 184.70 24.10 0.73

QM-DH-11 0.00 369.70 369.70 1.09 1.00

inc 4.20 71.70 67.50 0.51

and 87.55 107.65 20.10 2.20

and 251.90 344.95 93.05 2.75 2.42

QM-DH-12 0.80 243.20 242.40 0.54

inc 0.80 72.60 71.80 1.18

inc 2.80 55.10 52.30 1.53

- Note hole QM-DH-12 includes a sample of 116.34 g/t Au over 2.00 m with visible gold. This has been cut to

20 g/t to calculate intervals.

- Cut-off grade 0.1 g/t Au. Intervals above 0.3 g/t reported.

- No more than 6.0 m internal waste included in intersections.

- Grades reported uncut and, if appropriate, cut to 20 g/t Au.

The drilling shows that, geologically, the Miraflores breccia body consists of a number of variably

mineralized separate intrusive porphyry breccia phases with the better gold mineralization being

associated with a later clean breccia phase, which is cemented by vuggy quartz, carbonate and epidote

associated with pyrite, sphalerite, chalcopyrite and galena with local visible gold. The drill program

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 12

showed that the breccia body extends further towards the south and southwest at depth and is less

extensive near surface at the northwest end.

Highlights of the drill program include:

Hole QM DH-03 was drilled from the NE contact to the SW contact through the centre of the Miraflores

porphyry breccia pipe body and intersected 449 metres grading 1.29 g/t Au or 1.03 g/t Au cut to 20 g/t Au,

including 23.95 metres grading 9.18 g/t Au or 4.67 g/t Au cut to 20 g/t Au.

Hole QM DH-11 was drilled at -55° from a location near the southern contact of the Miraflores porphyry

breccia pipe body towards the SW and intersected 369.7 metres grading 1.0 g/t Au cut to 20 g/t Au,

including 93.05 metres grading 2.42 g/t Au cut to 20 g/t Au, from 251.9 metres to 344.95 metres.

Hole QM DH-12, drilled at -60° towards the southern contact of the body, intersected 0.54 g/t Au (cut to

20 g/t Au) over 242 metres including higher grade sections of 1.18 g/t Au (cut to 20 g/t Au) over 71.7

metres and 1.53 g/t Au (cut to 20 g/t Au) over 52.3 metres. One sample, containing visible gold, ran

116.34 g/t Au over 2 metres.

On May 26, 2011, the Company announced an updated NI 43-101 compliant resource estimate for its

Miraflores property, which has incorporated the drilling carried out by the Company in 2010 along with all

the previous drilling mentioned above. The updated estimate includes a Measured and Indicated resource

of 1,227,593 ounces of gold grading 0.9 g/t gold contained in 44,717,000 tonnes at a cut off grade of 0.3

g/t Au. Additionally, the resource contains an Inferred resource of 354,512 ounces of gold grading 0.9 g/t

gold in 12,252,000 tonnes at a cut off grade of 0.3 g/t Au. This represents a significant increase in all

categories, from the previous inferred resource estimate of 776,000 ounces at 1.295 g/t gold in 18.65

million tonnes, at a cut off grade of 0.5 g/t. Updated geological interpretations and increased drilling

density have moved a significant proportion of the resources into the measured and indicated category.

The new mineral resource estimate is based on 7,757 metres of drilling in 22 diamond drill holes and 154

underground channel samples. This includes 4,132 metres in 12 holes completed by Seafield in October

2010 (see press releases of results dated December 2, 1010 and February 14, 2011), and 3,624 metres

in 10 holes carried out by AngloGold Ashanti and B2Gold in 2006-2007.

A second drill program is currently underway at Miraflores for expansion and infill drilling, to better define

the shape of the deposit, and to extend the mineralization laterally and at depth, where it remains open. A

program of preliminary metallurgical test work is also underway at McClelland Laboratories Inc. in Sparks,

Nevada. In addition, on July 5, 2011, the Company announced that SRK Consulting (SRK) through its

Denver, Colorado office has been appointed to complete a preliminary economic assessment or scoping

level study, on the Miraflores Property. The purpose of the study by SRK will be to evaluate the potential

positive economics of developing an open-pit and underground mining operation and to provide

recommendations to advance the Miraflores Project to a prefeasibility study. The Company plans to have

a final scoping study report in Q1 2012. SRK’s work will build on ongoing preliminary metallurgical testing

and the current phase of infill and expansion drilling program which includes 6,200 meters of drilling to be

concluded by November 2011.

In the Dosquebradas area, work has focussed on the magnetic anomaly over the Dosquebradas porphyry

and the extension of the magnetic feature for about 3 km to the northeast on the property. Since

magnetite alteration and veining are important features of gold porphyries in the Quinchia project,

magnetic surveys are a key to discovering hidden porphyries in areas of very little outcrop. Previous

sampling also identified anomalous gold values in soil and rock geochemical samples across the trend of

this magnetic anomaly.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 13

Follow-up geological mapping and sampling and soil survey programs are now well advanced in the

general Dosquebradas area. The initial detailed soil geochemical program covered an area of

approximately 3.6 km by 2.0 km and collected 1,129 samples at 50 m intervals on a NE trending grid with

line spacing of 100 m. Gold values in soils ranged from below detection up to a high of 4.73 g/t Au. The

principal new gold-in-soil anomaly is called Santa Sofia and is located one km to the northeast of the

Dosquebradas porphyry.

A second gold-in-soil anomaly defines the northern extension of the Dosquebradas porphyry on

Seafield’s property and has an area of about 700 metres by 550 metres as defined by soil samples above

50 ppb Au (0.05 g/t Au). Values in soils are as high as 0.58 g/t Au. The soil anomaly is in an

aeromagnetic low, which may be related to phyllic alteration associated with the mineralizing event. The

gold anomaly is associated with a copper anomaly, defined by values above 250 ppm and up to 620 ppm

Cu, and a stronger molybdenum anomaly than the Santa Sofia zone, with anomalous values between 5

and 96 ppm Mo, again indicative of potential porphyry-related mineralization. Currently, diamond drilling

is underway to test the Dosquebradas zone and the associated soil anomaly to the north. To date a total

of 5,648 metres have been drilled in 13 holes. The program is designed to identify and delineate the

extent of gold mineralization to the north of the Dosquebradas quartz diorite porphyry intrusion. Assay

data have been received for all thirteen holes of the program and the significant results are listed in the

table below:

Hole No.

From

(m) To (m)

Interval

(m) Au (g/t)

PREVIOUSLY REPORTED

QDQ-DH-01 0.00 268.80 268.80 0.37

inc 20.10 31.20 11.10 2.00

and 52.70 69.20 16.50 1.18

and 181.20 257.90 76.70 0.45

QDQ-DH-02 0.00 511.50 511.50 0.58

inc 122.10 421.00 298.90 0.81

inc 122.10 322.00 199.90 0.98

inc 197.20 234.20 37.00 1.66

and 266.20 302.35 36.15 1.98

and 378.80 421.00 42.20 0.72

QDQ-DH-03 No significant intersections

NEW RESULTS

QDQ-DH-04 8.10 390.60 382.80 0.20

inc 10.90 170.90 160.00 0.29

inc 84.50 153.10 71.60 0.40

inc 96.85 120.70 23.85 0.48

and 129.50 143.40 13.90 0.65

and 217.50 228.80 11.30 0.42

and 241.10 254.00 12.95 0.30

QDQ-DH-05 No significant intersections

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 14

QDQ-DH-06 0.00 569.40 569.40 0.23

inc 0.00 160.00 160.00 0.28

inc 15.10 112.00 96.90 0.37

inc 64.00 79.00 15.00 0.58

and 230.5 567.90 337.40 0.24

inc 310.40 354.00 52.65 0.37

inc 389.40 438.20 48.80 0.50

QDQ-DH-07 No significant intersections

QDQ-DH-08 No significant intersections

QDQ-DH-09 86.4 502.40 416.00 0.19

inc 237.7 252.35 14.65 0.38

and 356.4 370.40 14.00 0.33

and 478.4 490.40 12.00 0.90

QDQ-DH-10 No significant intersections

QDQ-DH-11 31.5 108.60 77.05 0.38

QDQ-DH-12 197.9 205.90 8.00 0.31

and 236 242.30 6.30 0.40

QDQ-DH-13 4.5 367.70 363.20 0.30

inc 278 338.40 60.40 0.63

Note: Cut-off grade 0.1 g/t Au. Grades reported are uncut. (There are no high grades that require cutting.)

Highlight of the results to date is Hole QDQ-DH-02, which was drilled at -50° westward to test the

extension of the gold mineralization outlined in the trench (1.75 g/t Au over 94 m) reported in the

Company press release of December 8, 2010. The hole intersected 511.5 metres grading 0.58 g/t Au,

0.05% Cu including 199.9 metres grading 0.98 g/t Au, 0.09% Cu from 122 metres to 322 metres and

terminated in mineralization. In 2006, AngloGold Ashanti, a previous operator on the property, drilled two

shorter holes on the same section as QDQ-DH-02. Anglo Hole DQ-DD-2 returned 0.62 g/t Au, 0.07% Cu

over 68 metres and 0.90 g/t Au, 0.10 % Cu over 36 metres. Hole DQ-DD-3 drilled at -60° returned grades

of 0.63 g/t Au over 90.0 metres and 1.67 g/t Au over 39.5 metres. The best gold mineralization to date at

Dosquebradas is associated with an early quartz diorite porphyry and associated intrusive breccias. The

grades above 0.3 g/t gold are concentrated in a zone approximately 250 metres wide (E-W) and greater

than 300 metres long (N-S). The zone is open at depth and is interpreted to plunge to the north. This

zone was intersected by holes QDQ-DH-02, with 511.5 m at 0.58 g/t Au including 199.9 m at 0.98 g/t Au

(reported in press release of March 7, 2011) and QDQ-DH-13 with 60.4 m at 0.63 g/t Au. This is part of a

larger porphyry system at least 600 meters long (N-S) by 600 meters wide (E-W). Other drill holes at

Dosquebradas intersected lower grades of gold mineralization associated with inter-mineral and late

diorite porphyries and breccias and basalt wall rock. Seafield has commenced a second diamond drill

program of some 5,600 metres in 12 holes over an area of approximately 300m x 200m with one drill rig

in order to better define the gold mineralization in the early quartz diorite porphyry and be able to make a

mineral resource estimate.

At Santa Sofia, the soil anomaly extends over an area of about 1,050 metres by 850 metres as defined by

soil samples above 50 ppb Au (0.05 g/t Au), with maximum values of 1.3 and 2.3 g/t Au, and overlaps the

northern half of a strong aeromagnetic high anomaly. The gold anomaly is associated with a copper

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 15

anomaly, defined by values above 250 ppm and up to 820 ppm Cu, and a weak molybdenum anomaly

with values up to 23 ppm Mo. A drilling program has tested the Santa Sofia soil anomaly with a total of

2,368 metres drilled in 7 holes to date. The host rock is largely basalt cut by a number of narrow veins

and shear zones but no significant mineralized intersections have been identified to date. Further surface

exploration, including mapping, prospecting, trenching and geophysics will be required prior to further

drilling.

At the La Loma zone, 1.2 km east of Santa Sofia, a third soil anomaly with values up to 4.7 g/t Au has

been identified and the soil sample grid has been extended to the south east to define the extent of this

anomaly. Drilling of 1,222 metres in three holes was completed to test the La Loma soil geochemical

anomaly. The holes intersected diorite porphyry and gabbroic rocks cut by NNW trending shears with no

significant assays to date.

(iii) Project Expenditures

The following table sets forth a breakdown of material components of exploration expenditures incurred at

the Colombia projects.

Exploration expenditures

Six Months

Ended

June 30,

2011

$

Six Months

Ended

June 30,

2010

$

Cumulative

to

June 30,

2011

$

Acquisition costs 926,516 1,705,801 2,974,386

Administrative costs 219,992 201,377 859,548

Amortization 4,275 932 6,662

Assays and analyses 233,927 3,566 307,383

Drilling 1,146,200 nil 2,134,853

Claim staking 40,624 1,147 54,569

Supplies, equipment and rentals 163,466 30,046 269,038

Geologist fees and costs 735,577 73,326 914,587

Travel and accommodation 44,248 29,964 201,778

Security 5,066 nil 5,066

Environment 9,580 nil 9,580

Tax 175,478 nil 175,478

Exploration expenditures 3,704,949 2,046,159 7,912,928

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 16

(iv) Budget

Following are the plans related to the Colombian properties, which will be funded from existing funds.

Planned expenditures are as follows:

Project/Property

Name

Plans

for

Project

Planned

Expenditures

for calendar

2011

(approx.)

Spent

(approx.)

Under

Spent

(approx.)

Timing for

Completion of

Planned

Activities

Colombian

Properties

(1) $6,295,000 (2) $3,469,000 $2,826,000 December 31,

2011

(1) Options payments of $975,000, geological, geochemical and geophysical surveys of $760,000,

land maintenance costs of $60,000 and diamond drilling of $4,500,000; and

(2) Discretionary, subject to change if management decides to scale back operations or accelerate

exploration.

Technical Disclosure

The technical disclosure under the heading “Mineral Property Interests” has been prepared under the

supervision of James Pirie, P.Eng., and a “qualified person” within the meaning of National Instrument 43-

101. Mr. Pirie is a Director of the Company.

Overall Objective

The primary business objective of Seafield is to build a significant gold exploration and development

company based upon Seafield’s current holdings in Colombia, Mexico and Canada (Ontario). In

furtherance of this objective, Seafield established the following business strategy:

• Develop and implement a discretionary exploration budget on acquired property interests with a

view to establishing a viable gold deposit; and

• capitalize on management's technical expertise and ability to identify, evaluate and acquire

exploration and development properties.

See “Risks and Uncertainties” below.

Summary of Quarterly Results

For quarters ending after January 1, 2010, the quarterly results have been restated to reflect accounting

policies consistent with IFRS. Quarterly results for quarters ended before January 1, 2010, have been

prepared in accordance with Canadian generally accepted accounting principles (“Canadian GAAP”).

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 17

Three Months

Ended

Profit and loss

Total Assets

($)

Accounting

Policies

Total

($)

Per Share

($)

2011-June 30 IFRS (4,732,327) (1) (0.03) 18,885,984

2011-March 31 IFRS (1,631,357) (2) (0.01) 18,445,382

2010-December 31 IFRS (2,939,620) (3) (0.03) 19,415,924

2010-September 30 IFRS (983,747) (4) (0.01) 3,375,928

2010-June 30 IFRS (1,794,049) (5) (0.02) 4,288,699

2010-March 31 IFRS (1,400,858) (6) (0.02) 2,602,105

2009-December 31 Canadian GAAP (621,836) (7) (0.03) 4,185,458

2009-September 30 Canadian GAAP (2,421,547) (8) (0.05) 2,420,766

Notes:

(1) Net loss of $4,732,327 consisted primarily of: exploration and evaluation expenditures of

$2,460,953; consulting fees of $781,210; investor relations of $53,734; and foreign exchange

loss of $1,363. All other expenses related to general working capital purposes.

(2) Net loss of $1,631,357 consisted primarily of: exploration and evaluation expenditures of

$1,324,452; consulting fees of $90,000; investor relations of $26,986; and foreign exchange

loss of $86,393. All other expenses related to general working capital purposes.

(3) Net loss of $2,939,620 consisted primarily of: exploration and evaluation expenditures of

$2,396,076; salaries and benefits of $75,154; consulting fees of $150,000; investor relations

of $57,896; and foreign exchange loss of $183,006. All other expenses related to general

working capital purposes.

(4) Net loss of $983,747 consisted primarily of: exploration and evaluation expenditures of

$764,275; salaries and benefits of $90,995; consulting fees of $60,000; professional fees of

$28,957; and office and general expenses of $24,022. All other expenses related to general

working capital purposes.

(5) Net loss of $1,794,049 consisted primarily of: exploration and evaluation expenditures of

$1,183,948; salaries and benefits of $270,400; investor relations expense of $294,268; and

consulting fees of $60,000. All other expenses related to general working capital purposes.

(6) Net loss of $1,400,858 consisted primarily of: exploration and evaluation expenditures of

$921,025; salaries and benefits of $325,000; and consulting fees of $50,000. All other

expenses related to general working capital purposes.

(7) Net loss of $621,836 consisted primarily of: consulting fees $195,000; stock-based

compensation $215,600; and investor relations expense $173,042. All other expenses related

to general working capital purposes. In addition, total assets have increased by $1,764,692

over the previous quarter due to various financings completed during Q4 2009.

(8) Net loss of $2,421,547 consisted primarily of: write-off of mining interests $2,085,226 (Tango

property in Mexico); stock-option compensation $197,400; and consulting fees $45,000. All

other expenses related to general working capital purposes.

Discussion of Operations

a) Operations

The Company has chosen to expense its exploration and evaluation expenditures as incurred instead of

capitalizing these costs to the statement of financial position. The Company has chosen this policy

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 18

because management has not yet determined that there will be a future benefit from its exploration

properties.

For the three and six months ended June 30, 2011, Seafield personnel evaluated a number of new

business opportunities, including both exploration and development properties with potential for hosting

commercial deposits containing gold. The search for additional projects continues.

Significant uncertainty concerning the short and medium term global economic outlook persists.

Management, in conjunction with the Board of Directors, will continue to monitor these developments and

their effect on Seafield’s business.

b) Six months ended June 30, 2011, compared with six months ended June 30, 2010

Seafield’s net loss totalled $6,363,684 for the six months ended June 30, 2011, with basic and diluted

loss per share of
.04. This compares with net loss of $3,194,907 with basic and diluted loss per share

of
.04 for the six months ended June 30, 2010. The increase of $3,168,777 in net loss was principally

because:

• The Company incurred a decrease in professional fees of $5,855 for the six months ended June

30, 2011, compared to the six months ended June 30, 2010. The decrease can be attributed to

less use of the Company’s corporate lawyers and external accountant in 2011 compared to 2010.

• The Company incurred a decrease in investor relations expense of $224,448 for the six months

ended June 30, 2011, compared to the six months ended June 30, 2010. The decrease can be

attributed to business development and travel charges incurred to raise Seafield’s investor profile,

including developing its prospects in Colombia in 2010. These activities were minimal in 2011.

• Office and general expense decreased by $16,820. Office and general expenses totalled $32,520

for the six months ended June 30, 2011 (six months ended June 30, 2010 - $49,340) and

consisted of costs such as advertising and promotion, telephone, rent, travel, insurance, postage,

and courier charges. The decrease in office and general expenses can be attributed to cost

saving initiatives implements by management.

• Consulting fees of $871,210 for the six months ended June 30, 2011 (six months ended June 30,

2010 - $119,000) can be attributed to payment of $385,000 (six months ended June 30, 2010 -

$55,000) to Anthony Roodenburg, Director, former President and Chief Executive Officer of the

Company, and $385,000 (six months ended June 30, 2010 - $55,000) to James Pirie, Director,

the former Chief Financial Officer (acting in the capacity of), Secretary and Vice-President of the

Company.

• The Company incurred an increase in accounting and corporate services expense of $10,774 for

the six months ended June 30, 2011, compared to the six months ended June 30, 2010. In

general, these costs were higher because the Company required assistance from external

consultants to assist the Company with its IFRS conversion.

• The Company incurred an increase in foreign exchange loss of $195,526, up from a gain of

$107,770 in the comparative 2010 period. The increase can be attributed to US dollar exchange

rate fluctuations in the parent company of Seafield.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 19

• Salaries and benefits increased in the six months ended June 30, 2011 to $1,341,052, compared

with $595,400 for the same period in 2010, due to the following items:

2011 Share based payments

o On September 28, 2010, 280,000 options to purchase common shares of the Company

at a price of
.25 have been granted to consultants expiring on September 28, 2012. A

value of $58,240 was assigned using the Black-Scholes option pricing model with the

following assumptions: dividend yield of 0%, expected volatility of 194% based on

historical trends, share price on the date of grant of
.26, risk-free interest rate of 1.39%,

and an expected life of 2 years. These options vest as to 25% after three, six, nine, and

twelve months from the date of grant. For the six months ended June 30, 2011, the

impact on salaries and benefits was $23,926.

o On June 22, 2010, 2,600,000 options to purchase common shares of the Company at a

price of
.175 have been granted to consultants, officers and directors of Seafield,

expiring on June 22, 2015. A value of $439,400 was assigned using the Black- Scholes

option pricing model with the following assumptions: dividend yield of 0%, expected

volatility of 187% based on historical trends, share price on the date of grant of
.175,

risk-free interest rate of 2.65%, and an expected life of 5 years. 1,600,000 options vested

immediately with a value of $270,400 and 1,000,000 options with a value of $169,000 will

vest 25% after three, six, nine, and twelve months from the date of grant. For the six

months ended June 30, 2011, the impact on salaries and benefits was $33,605.

o On May 6, 2011, the Company granted an aggregate of 6,400,000 incentive stock

options to the new management and board appointees and consultants of the Company.

The options are priced at
.235 and will expire May 6, 2016. The options are part of a

negotiated incentive package for the incoming directors and officers. A value of

$1,250,560 was assigned using the Black-Scholes option pricing model with the following

assumptions: dividend yield of 0%, expected volatility of 105% based on historical trends,

share price on the date of grant of
.25, risk-free interest rate of 2.51%, and an

expected life of 5 years. These options vest immediately. For the six months ended June

30, 2011, the impact on salaries and benefits was $1,250,560.

o On May 10, 2011, 50,000 options to purchase common shares of the Company at a price

of
.25 have been granted to a consultant, expiring on May 10, 2016. A value of $9,685

was assigned using the Black- Scholes option pricing model with the following

assumptions: dividend yield of 0%, expected volatility of 105% based on historical trends,

share price on the date of grant of
.25, risk-free interest rate of 2.57%, and an

expected life of 5 years. These options vest immediately. For the six months ended June

30, 2011, the impact on salaries and benefits was $9,685.

2010 Share based payments

o On March 5, 2010, 1,250,000 options to purchase common shares of the Company at a

price of
.29 have been granted to consultants of Seafield, expiring on March 5, 2013. A

value of $325,000 was assigned using the Black-Scholes option pricing model with the

following assumptions: dividend yield of 0%; expected volatility of 196.4%; risk-free

interest rate of 1.82%; and an expected life of 3 years.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 20

o On June 22, 2010, 2,600,000 options to purchase common shares of the Company at a

price of
.175 have been granted to consultants, officers and directors of Seafield,

expiring on June 22, 2015. A value of $439,400 was assigned using Black-Scholes option

pricing model with the following assumptions: dividend yield of 0%; expected volatility of

192%; risk-free interest rate of 2.65%; and an expected life of 5 years. 1,600,000 options

vested immediately with a value of $270,400 and 1,000,000 options with a value of

$169,000 will vest 25% after three, six, nine, and twelve months from the date of grant.

Several variables are used when determining the value of stock options using the Black-Scholes

valuation model:

o The expected term: the Company used the maximum term ascribed to the stock options

issued, for the purposes of calculating their value. The Company chose the maximum

term because it is difficult to determine with any reasonable degree of accuracy when

these stock options will be exercised.

o Volatility: the Company used historical information on the market price of its common

shares to determine the degree of volatility at the date the stock options were granted.

Therefore, depending on when the stock options are granted and the period of historical

information examined, the degree of volatility can be different when calculating the value

of different stock options.

o Risk-free interest rate: the Company used the interest rate available for government

securities of an equivalent expected term at the date of the grant of the stock options.

The risk-free interest rate will vary depending on the date of the grant of the stock options

and their expected term.

o Dividend yield: the Company has not paid dividends in the past because it is in the

exploration stage and has not yet earned any significant income. Also, the Company

does not expect to pay dividends in the foreseeable future because it does not expect to

bring its mineral properties into production and earn significant revenue any time soon.

Therefore, a dividend rate of 0% was used for the purposes of the valuation of the stock

options.

• All other expenses related to general working capital purposes.

c) Three months ended June 30, 2011, compared with three months ended June 30, 2010

Seafield’s net loss totalled $4,732,327 for the three months ended June 30, 2011, with basic and diluted

loss per share of
.03. This compares with net loss of $1,794,049 with basic and diluted loss per share

of
.02 for the three months ended June 30, 2010. The increase of $2,938,278 in net loss was

principally because:

• The Company incurred a decrease in professional fees of $3,720 for the three months ended

June 30, 2011, compared to the three months ended June 30, 2010. The decrease can be

attributed to less use of the Company’s corporate lawyers and external accountant in 2011

compared to 2010.

• The Company incurred a decrease in investor relations expense of $240,534 for the three months

ended June 30, 2011, compared to the three months ended June 30, 2010. The decrease can be

attributed to business development and travel charges incurred to raise Seafield’s investor profile,

including developing its prospects in Colombia in 2010. These activities were minimal in 2011.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 21

• Office and general expense decreased by $6,481. Office and general expenses totalled $17,293

for the three months ended June 30, 2011 (three months ended June 30, 2010 - $23,774) and

consisted of costs such as advertising and promotion, telephone, rent, travel, insurance, postage,

and courier charges. The decrease in office and general expenses can be attributed to cost

saving initiatives implements by management.

• Consulting fees of $781,210 for the three months ended June 30, 2011 (three months ended

June 30, 2010 - $69,000) can be attributed to payment of $340,000 (three months ended June

30, 2010 - $30,000) to Anthony Roodenburg, Director, former President and Chief Executive

Officer of the Company, and $340,000 (three months ended June 30, 2010 - $30,000) to James

Pirie, Director, the former Chief Financial Officer (acting in the capacity of) Secretary and Vice-

President of the Company.

• The Company incurred an increase in accounting and corporate services expense of $4,205 for

the three months ended June 30, 2011, compared to the three months ended June 30, 2010. In

general, these costs were higher because the Company required assistance from external

consultants to assist the Company with its IFRS conversion.

• The Company incurred an increase in foreign exchange loss of $124,657, up from a gain of

$123,294 in the comparative 2010 period. The increase can be attributed to US dollar exchange

rate fluctuations in the parent company of Seafield.

• Salaries and benefits increased in the three months ended June 30, 2011 to $1,289,375,

compared with $270,400 for the same period in 2010, due to the following items:

2011 Share based payments

o On September 28, 2010, 280,000 options to purchase common shares of the Company

at a price of
.25 have been granted to consultants expiring on September 28, 2012. A

value of $58,240 was assigned using the Black-Scholes option pricing model with the

following assumptions: dividend yield of 0%, expected volatility of 194% based on

historical trends, share price on the date of grant of
.26, risk-free interest rate of 1.39%,

and an expected life of 2 years. These options vest as to 25% after three, six, nine, and

twelve months from the date of grant. For the three months ended June 30, 2011, the

impact on salaries and benefits was $8,422.

o On June 22, 2010, 2,600,000 options to purchase common shares of the Company at a

price of
.175 have been granted to consultants, officers and directors of Seafield,

expiring on June 22, 2015. A value of $439,400 was assigned using the Black- Scholes

option pricing model with the following assumptions: dividend yield of 0%, expected

volatility of 187% based on historical trends, share price on the date of grant of
.175,

risk-free interest rate of 2.65%, and an expected life of 5 years. 1,600,000 options vested

immediately with a value of $270,400 and 1,000,000 options with a value of $169,000 will

vest 25% after three, six, nine, and twelve months from the date of grant. For the three

months ended June 30, 2011, the impact on salaries and benefits was $10,049.

o On May 6, 2011, the Company granted an aggregate of 6,400,000 incentive stock

options to the new management and board appointees and consultants of the Company.

The options are priced at
.235 and will expire May 6, 2016. The options are part of a

negotiated incentive package for the incoming directors and officers. A value of

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 22

$1,250,560 was assigned using the Black-Scholes option pricing model with the following

assumptions: dividend yield of 0%, expected volatility of 105% based on historical trends,

share price on the date of grant of
.25, risk-free interest rate of 2.51%, and an

expected life of 5 years. These options vest immediately. For the three months ended

June 30, 2011, the impact on salaries and benefits was $1,250,560.

o On May 10, 2011, 50,000 options to purchase common shares of the Company at a price

of
.25 have been granted to a consultant, expiring on May 10, 2016. A value of $9,685

was assigned using the Black- Scholes option pricing model with the following

assumptions: dividend yield of 0%, expected volatility of 105% based on historical trends,

share price on the date of grant of
.25, risk-free interest rate of 2.57%, and an

expected life of 5 years. These options vest immediately. For the three months ended

June 30, 2011, the impact on salaries and benefits was $9,685.

2010 Share based payments

o On June 22, 2010, 2,600,000 options to purchase common shares of the Company at a

price of
.175 have been granted to consultants, officers and directors of Seafield,

expiring on June 22, 2015. A value of $439,400 was assigned using Black-Scholes option

pricing model with the following assumptions: dividend yield of 0%; expected volatility of

192%; risk-free interest rate of 2.65%; and an expected life of 5 years. 1,600,000 options

vested immediately with a value of $270,400 and 1,000,000 options with a value of

$169,000 will vest 25% after three, six, nine, and twelve months from the date of grant.

Several variables are used, including the expected term, volatility, risk-free interest rate and

dividend yield, when determining the value of stock options, using the Black-Scholes valuation

model, as described on pages 17 to 19.

• All other expenses related to general working capital purposes.

Liquidity and Financial Position

The activities of the Company, principally the acquisition and exploration of properties that have the

potential to contain gold, are financed through equity offerings and the exercise of stock options and

warrants.

During the six months ended June 30, 2011, the following equity transactions occurred:

o 1,640,000 stock options were exercised for cash proceeds of $295,875;

o 6,856,400 warrants were exercised for cash proceeds of $1,077,697; and

o 10,000,000 common shares priced at
.30 per share, for gross proceeds of $3,000,000.

At June 30, 2011, Seafield had $18,448,039 in cash (December 31, 2010 - $19,110,000).

The budgeted corporate activities for Toronto, Canada, will account for approximately $1.5 million for the

year ended December 31, 2011. The Elora project exploration program in NW Ontario will account for

$70,000. The program is expected to be completed in the fourth quarter of fiscal 2011. The Minera

projects exploration program in Mexico will account for $700,000 and is expected to be completed in the

fourth quarter of fiscal 2011. In addition, the exploration expenditures on the Colombian properties will be

about $6.3 million and are expected to be completed in the fourth quarter of fiscal 2011.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 23

The Company must also comply with the payment schedule for the Colombian properties, which requires

the payment of US$250,000 (US$175,000 paid) within five days of the binding date of the individual

option agreements documented in the Definitive Agreement. On the first anniversary of the binding date

of two of the option agreements, Seafield may elect to continue the options and make a final payment to

CCGC on each property of US$125,000. Seafield will also assume option payments on the underlying

properties totalling approximately US$6,250,000 (US$1,100,000 paid) over 30 months.

Accounts payable and accrued liabilities decreased to $539,385 at June 30, 2011, compared to $584,040

at December 31, 2010, primarily due to less exploration related amounts due at June 30, 2011. The

Company’s cash as at June 30, 2011, is sufficient to pay these liabilities.

The Company has no operating revenues and therefore must utilize its current cash reserves and other

financing transactions to maintain its capacity to meet ongoing discretionary and committed exploration

and operating activities.

As of June 30, 2011, and to the date of this MD&A, the cash resources of Seafield are held with select

Canadian, Mexican and Colombian financial institutions.

The Company has no debt and its credit and interest rate risk is minimal. Accounts payable and accrued

liabilities are short term and non-interest bearing.

The Company’s use of cash at present occurs, and in the future is expected to occur, principally in two

areas, namely, funding of its general and administrative expenditures and funding of its investment

activities. Those investing activities include the cash components of the cost of acquiring and exploring its

mineral claims. During the year ending December 31, 2011, the Company’s operating expenses are

expected to increase compared to prior years due to its support costs for the Company’s exploration

program in Colombia (See “Colombian Properties” under “Mineral Property Interests” above). Corporate

head office costs are estimated to average approximately $375,000 per quarter for fiscal 2011. The

$375,000 covers professional fees, reporting issuer costs, management fees, business development

costs and general and administrative costs. In addition, the Company plans to spend approximately $7.1

million for its ongoing exploration programs in Colombia, Mexico and Canada for fiscal 2011. The $7.1

million includes ongoing drilling, line cutting, geological mapping and sampling, geochemical and

magnetic surveys, royalty payments, claim maintenance, option payments and land maintenance costs.

The Company will determine if further work is warranted in Colombia as the program proceeds, based on

drilling results. If the drilling results are successful, additional financing will be required for Seafield to

continue its exploration program in Colombia. In 2011, the exploration programs on the Elora and

Minera projects are expected to continue. Seafield will begin its exploration programs budgeted at

$70,000 for the Elora project and $700,000 for the Minera projects. The Company has sufficient funds to

pay for its acquisition costs of its Colombian properties of US$250,000 (US$175,000 paid), its drilling

campaign in Colombia of $6.3 million, and its corporate head office costs of approximately $1.5 million for

fiscal 2011. In addition, the Company will be required to pay royalty payments, claim maintenance, option

payments and land maintenance costs of approximately $1.03 million. These carrying costs will be paid in

due course, if management decides to continue with each project.

Regardless of whether or not the Company develops its projects in Colombia, Mexico and Canada, its

working capital of $18,184,890 as of June 30, 2011, is anticipated to be adequate for it to continue

operations at the current level for the twelve-month period ending June 30, 2012, even if its expected

plans discussed above do not materialize and new plans are developed. However, to meet long-term

business plans, exploring its property interests in Colombia, Mexico and Canada is an important

component of the Company’s financial success.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 24

Related Party Transactions

Related parties include the Board of Directors, officers, close family members and enterprises that are

controlled by these individuals as well as certain persons performing similar functions. Related party

transactions conducted in the normal course of operations are measured at the exchange value (the

amount established and agreed to by the related parties).

Salaries and benefits – Director Fees

Six Months

Ended

June 30,

2011

$

Six Months

Ended

June 30,

2010

$

Chris Irwin 5,000 nil

William McGuinty 5,000 nil

Michael E. Power 6,000 nil

James Paterson 5,000 nil

Total 21,000 nil

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 25

Salaries and benefits – Director Fees

Three Months

Ended

June 30,

2011

$

Three Months

Ended

June 30,

2010

$

Chris Irwin 2,500 nil

William McGuinty 2,500 nil

Michael E. Power 3,000 nil

James Paterson 2,500 nil

Total 10,500 nil

Details

Six Months

Ended

June 30,

2011

$

Six Months

Ended

June 30,

2010

$

Anthony Roodenburg (director, former president and chief

executive officer of the Company)

• executive compensation (1)

385,000 55,000

James Pirie, (director, former chief financial officer (acting

in the capacity of), secretary, and vice-president of the

Company)

• executive compensation (2) 385,000 55,000

Greencastle Resources Ltd., a company that has Anthony

Roodenburg and James Pirie in common

• rent (3) 15,000 6,000

Irwin Lowry LLC (4) nil 8,591

Cesar Lopez (5) 55,288 nil

Douglas Wu (6) 20,000 nil

Total 860,288 124,591

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 26

Details

Three Months

Ended

June 30,

2011

$

Three Months

Ended

June 30,

2010

$

Anthony Roodenburg (director, former president and chief

executive officer of the Company)

• executive compensation (1)

340,000 30,000

James Pirie, (former chief financial officer (acting in the

capacity of), secretary, director and former vice-president

of the Company)

• executive compensation (2) 340,000 30,000

Greencastle Resources Ltd., a company that has Anthony

Roodenburg and James Pirie in common

• rent (3) 7,500 3,000

Irwin Lowry LLC (4) nil 8,591

Cesar Lopez (5) 55,288 nil

Douglas Wu (6) 20,000 nil

Total 762,788 71,591

(1) Consulting fees charged by Anthony Roodenburg, former Chief Executive Officer and current Director

of Seafield.

(2) Consulting fees charged by James Pirie, former Vice President of Exploration and former Chief

Financial Officer (acting in the capacity of) and current Director of Seafield. As at March 31, 2011, James

Pirie was owed $814 (December 31, 2010 - $nil) and these amounts were included in accounts payable

and other liabilities.

(3) Rent charged by Greencastle Resources Ltd., a company that has Anthony Roodenburg and James

Pirie in common.

(4) During the three and six months ended June 30, 2011, legal fees of $nil (three and six months ended

June 30, 2010 - $8,591) were paid to Irwin Lowy LLC, a law firm in which Chris Irwin, a former director of

the Company, is a partner. At June 30, 2011, the law firm was owed $nil (December 31, 2010 - $45,796)

and this amount was included in accounts payable and accrued liabilities.

(5) Fees for performing the function of Chief Executive Officer.

(6) Fees for performing the function of Chief Financial Officer.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 27

Share based payments

Six Months

Ended

June 30,

2011

$

Six Months

Ended

June 30,

2010

$

Cesar Lopez 390,800 nil

Douglas Wu 293,100 nil

Total 683,900 nil

Share based payments

Three Months

Ended

June 30,

2011

$

Three Months

Ended

June 30,

2010

$

Cesar Lopez 390,800 nil

Douglas Wu 293,100 nil

Total 683,900 nil

Off-Balance-Sheet Arrangements

As of the date of this MD&A, the Company does not have any off-balance-sheet arrangements that have,

or are reasonably likely to have, a current or future effect on the results of operations or financial

condition of the Company, including, and without limitation, such considerations as liquidity, capital

expenditures and capital resources that would be material to investors.

Proposed Transactions

There are no proposed transactions of a material nature being considered by the Company at the date of

this MD&A. However, the Company continues to evaluate properties and corporate opportunities to

advance its exploration, development and objectives.

Critical Accounting Estimates

The preparation of the unaudited condensed consolidated interim financial statements requires

management to make certain estimates, judgments and assumptions that affect the reported amounts of

assets and liabilities at the date of the financial statements and reported amounts of expenses during the

reporting period. Actual outcomes could differ from these estimates. These unaudited condensed

consolidated interim financial statements include estimates that, by their nature, are uncertain. The

impacts of such estimates are pervasive throughout the unaudited condensed consolidated interim

financial statements, and may require accounting adjustments based on future occurrences. Revisions to

accounting estimates are recognized in the period in which the estimate is revised and future periods if

the revision affects both current and future periods. These estimates are based on historical experience,

current and future economic conditions and other factors, including expectations of future events that are

believed to be reasonable under the circumstances.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 28

Critical accounting estimates

Significant assumptions about the future that management has made that could result in a material

adjustment to the carrying amounts of assets and liabilities, in the event that actual results differ from

assumptions made, relate to, but are not limited to, the following:

• the recoverability of accounts receivable that are included in the unaudited condensed

consolidated interim statements of financial position;

• the recoverability of exploration and evaluation expenditures incurred on the Company's property

interests. The Company expenses the exploration and evaluation expenditures in the statements

of comprehensive profit or loss;

• the estimated useful lives and residual value of plant and equipment which are included in the

unaudited condensed consolidated interim statements and the related depreciation included in

profit or loss;

• the inputs used in accounting for share based payment transactions and in valuation of warrants

included in financial assets at fair value through profit or loss;

• management's judgment in determining the functional currency of the Company as Canadian

Dollars;

• management's assumption of no material restoration, rehabilitation and environmental, based on

the facts and circumstances that existed during the period; and

• management's position that there is no income tax considerations required within these unaudited

condensed consolidated interim financial statements.

Critical accounting judgments

The categorization of financial assets and liabilities is an accounting policy that requires management to

make judgments or assessments.

Changes in Accounting Policies

Impact of Adopting IFRS on the Company’s Accounting Policies

On January 1, 2011, the Company began preparing its financial statements in accordance with IFRS.

Reconciliations, descriptions and explanations of how the transition to IFRS has affected the reported

financial position, financial performance and cash flows of the Company are provided in Note 22,

“Conversion to IFRS” of the unaudited condensed interim consolidated financial statements. This note

also includes reconciliations of equity and comprehensive loss for comparative periods reported under

Canadian GAAP with amounts reported for those periods under IFRS.

The Company has changed certain accounting policies to be consistent with IFRS as it is expected to be

effective or available on December 31, 2011, the Company’s first annual IFRS reporting date. The

changes to its accounting policies have resulted in certain changes to the recognition and measurement

of assets, liabilities, equity, revenue and expenses within its financial statements.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 29

The following summarizes the significant changes to the Company’s accounting policies on adoption of

IFRS.

(a) Impairment of (non-financial) assets

IFRS requires a write down of assets if the higher of the fair market value and the value in use of a group

of assets is less than its carrying value. Value in use is determined using discounted estimated future

cash flows. Current Canadian GAAP requires a write down to estimated fair value only if the

undiscounted estimated future cash flows of a group of assets are less than its carrying value.

The Company's accounting policies related to impairment of non-financial assets have been changed to

reflect these differences. There was no impact on the unaudited condensed consolidated interim financial

statements.

(b) Decommissioning Liabilities (Asset Retirement Obligations)

IFRS requires the recognition of a decommissioning liability for legal or constructive obligations, while

current Canadian GAAP only requires the recognition of such liabilities for legal obligations. A

constructive obligation exists when an entity has created reasonable expectations that it will take certain

actions.

The Company's accounting policies related to decommissioning liabilities have been changed to reflect

these differences. There is no impact on the unaudited condensed consolidated interim financial

statements.

(c) Exploration and evaluation

On transition to IFRS, the Company elected to expense exploration and evaluation expenditures as

incurred. Previously, the Company's Canadian GAAP policy was to capitalize exploration and evaluation

expenditures as incurred.

(d) Flow-through shares

On transition to IFRS, the Company has adopted a policy whereby proceeds from flow-through issuance

are allocated between the offering of shares and the sale of tax benefits based on the difference between

the quoted price of the existing shares and the amount the investor pays for the shares. A flow through

share liability is recognized for this difference and is extinguished by recognizing an income tax recovery

when the entity renounces the tax deductions. Previously, the Company's Canadian GAAP policy was to

adopt the recommendations of Emerging Issues Committee ("EIC") 146 with respect to the accounting for

flow-through shares. This resulted in the Company reducing the net proceeds of the flow-through share

issuance by the future tax liability of the Company resulting from the renunciation of the exploration and

development expenditures in favour of the flow-through share subscribers.

(e) Foreign currency translation

Under Canadian GAAP, the Company used the temporal method of foreign exchange translation for its

fully integrated subsidiary in Mexico and Colombia. Under the temporal method, non-monetary assets

were converted to the presentation currency using historical foreign exchange rates and the resulting

difference between the translation of the balance sheet and income statement was recorded in the

statement of operations.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 30

Under IFRS, the temporal method is not recognized and translation occurs using the equivalent of the

current rate method under Canadian GAAP. Under this method, all assets and liabilities are treated as

monetary and translated to the presentation currency using the foreign exchange rate at the end of the

reporting period. Differences between the translation of the balance sheet and the statement of

operations are accumulated in an account in equity. The change in translation methodology has resulted

in changes in the presentation currency for the Company’s Mexican and Colombian subsidiary. As a

result, income and expenses of these foreign subsidiaries are recorded using the rate of exchange in

effect at the dates of the transactions and the translation of assets and liabilities are at the rates of

exchange in effect at the period end date resulting to currency translation adjustments recognized in the

statement of other comprehensive loss.

Recent Accounting Pronouncements

Certain pronouncements were issued by the IASB or the IFRIC that are mandatory for accounting periods

after December 31, 2010 or later periods. Many are not applicable or do not have a significant impact to

the Company and have been excluded from the table below. The following have not yet been adopted

and are being evaluated to determine their impact on the Company.

(i) IFRS 9 – Financial instruments (“IFRS 9”) was issued by the IASB in October 2010 and will replace IAS

39 Financial Instruments: Recognition and Measurement (“IAS 39”). IFRS 9 uses a single approach to

determine whether a financial asset is measured at amortized cost or fair value, replacing the multiple

rules in IAS 39. The approach in IFRS 9 is based on how an entity manages its financial instruments in

the context of its business model and the contractual cash flow characteristics of the financial assets.

Most of the requirements in IAS 39 for classification and measurement of financial liabilities were carried

forward unchanged to IFRS 9. The new standard also requires a single impairment method to be used,

replacing the multiple impairment methods in IAS 39. IFRS 9 is effective for annual periods beginning on

or after January 1, 2013. IASB has proposed to move the effective date of IFRS 9 to January 1, 2015.

(ii) IFRS 10 – Consolidated financial statements (“IFRS 10”) was issued by the IASB in May 2011. IFRS

10 is a new standard which identifies the concept of control as the determining factor in assessing

whether an entity should be included in the consolidated financial statements of the parent company.

Control is comprised of three elements: power over an investee; exposure to variable returns from an

investee; and the ability to use power to affect the reporting entity’s returns. IFRS 10 is effective for

annual period beginning on or after January 1, 2013. Earlier adoption is permitted.

(iii) IFRS 11 – Joint arrangements (“IFRS 11”) was issued by the IASB in May 2011. IFRS 11 is a new

standard which focuses on classifying joint arrangements by their rights and obligations rather than their

legal form. Entities are classified into two groups: parties having rights to the assets and obligations for

the liabilities of an arrangement, and rights to the net assets of an arrangement. Entities in the former

case account for assets, liabilities, revenues and expenses in accordance with the arrangement, whereas

entities in the latter case account for the arrangement using the equity method. IFRS 11 is effective for

annual periods beginning on or after January 1, 2013. Earlier application is permitted.

(iv) IFRS 12 – Disclosure of interests in other entities (“IFRS 12”) was issued by the IASB in May 2011.

IFRS 12 is a new standard which provides disclosure requirements for entities reporting interests in other

entities, including joint arrangements, special purpose vehicles, and off balance sheet vehicles. IFRS 12

is effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

(v) IFRS 13 – Fair value measurement (“IFRS 13”) was issued by the IASB in May 2011. IFRS 13 is a

new standard which provides a precise definition of fair value and a single source of fair value

measurement considerations for use across IFRSs. The key points of IFRS 13 are as follows:

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 31

• fair value is measured using the price in a principal market for the asset or liability, or in the

absence of a principal market, the most advantageous market;

• financial assets and liabilities with offsetting positions in market risks or counterparty credit risks

can be measured on the basis of an entity’s net risk exposure;

• disclosures regarding the fair value hierarchy has been moved from IFRS 7 to IFRS 13, and

further guidance has been added to the determination of classes of assets and liabilities;

• a quantitative sensitivity analysis must be provided for financial instruments measured at fair

value;

• a narrative must be provided discussing the sensitivity of fair value measurements categorised

under Level 3 of the fair value hierarchy to significant unobservable inputs;

• and information must be provided on an entity’s valuation processes for fair value measurements

categorized under Level 3 of the fair value hierarchy.

IFRS 13 is effective for annual periods beginning on or after January 1, 2013. Earlier application is

permitted.

(vi) IAS 1 – Presentation of financial statements (“IAS 1”) was amended by the IASB in June 2011 in

order to align the presentation of items in other comprehensive income with US GAAP standards. Items in

other comprehensive income will be required to be presented in two categories: items that will be

reclassified into profit or loss and those that will not be reclassified. The flexibility to present a statement

of comprehensive income as one statement or two separate statements of profit and loss and other

comprehensive income remains unchanged. The amendments to IAS 1 are effective for annual periods

beginning on or after July 1, 2012.

Financial Instruments

The Company's activities expose it to a variety of financial risks: credit risk, liquidity risk and market risk

(including interest rate, foreign currency risk and commodity and equity price risk).

Risk management is carried out by the Company's management team with guidance from the Audit

Committee and the Board of Directors.

(i) Credit risk

Credit risk is the risk of loss associated with a counterparty’s inability to fulfill its payment obligations. The

Company's credit risk is primarily attributable to cash and accounts receivable. Cash is held with select

major Canadian, Mexican and Colombia chartered banks, from which management believes the risk of

loss to be minimal.

(ii) Liquidity risk

Liquidity risk is the risk that the Company will not have sufficient cash resources to meet its financial

obligations as they come due. The Company’s liquidity and operating results may be adversely affected if

its access to the capital market is hindered, whether as a result of a downturn in stock market conditions

generally or matters specific to the Company. The Company generates cash flow primarily from its

financing activities. As at June 30, 2011, the Company had cash of $18,448,039 (December 31, 2010 -

$19,110,000) to settle current liabilities of $539,385 (December 31, 2010 - $584,040). All of the

Company's financial liabilities have contractual maturities of less than 90 days and are subject to normal

trade terms. The Company regularly evaluates its cash position to ensure preservation and security of

capital as well as liquidity.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 32

(iii) Market risk

Market risk is the risk of loss that may arise from changes in market factors such as interest rates, foreign

exchange rates and commodity and equity prices.

(a) Interest rate risk

The Company has cash balances and no interest-bearing debt. the Company's current policy is to

invest excess cash in investment-grade short-term deposit certificates issued by a Canadian

chartered bank with which it keeps its bank accounts. The Company periodically monitors the

investments it makes and is satisfied with the creditworthiness of its Canadian chartered bank.

(b) Foreign currency risk

The Company's functional and reporting currency is the Canadian Dollar and major purchases are

transacted in Canadian Dollars. As of June 30, 2011, the Company funds certain operations,

exploration and administrative expenses in Mexico and Colombia on a cash call basis using US

Dollar currency converted from its Canadian Dollar bank accounts held in Canada. The Company

maintains US Dollar bank accounts in Canada, Mexico and Colombia. The Company is subject to

gains and losses from fluctuations in the US Dollar.

Sensitivity analysis

Based on management's knowledge and experience of the financial markets, the Company believes the

following movements are reasonably possible over a six month period:

(i) The Company has no debt and receives low interest rates on its cash balances. Sensitivity to a plus or

minus one percentage point change in interest rates would not have a material impact on the reported net

loss and comprehensive loss.

(ii) The Company holds balances in the US Dollar, Mexican peso and Colombian peso which could give

rise to exposure to foreign exchange risk. Sensitivity to a plus or minus 10% change in the US Dollar,

Mexican peso and Colombian peso exchange rates against the Canadian Dollar, with all other variables

held constant, would affect the reported loss and comprehensive loss for the six months ended June 30,

2011 by approximately $179,000.

The sensitivity analysis shown in the notes above may differ materially from actual results.

Capital Management

The Company manages its capital with the following objectives:

• to ensure sufficient financial flexibility to achieve the ongoing business objectives including

funding of future growth opportunities, and pursuit of accretive acquisitions; and

• to maximize shareholder return through enhancing the share value.

The Company monitors its capital structure and makes adjustments according to market conditions in an

effort to meet its objectives given the current outlook of the business and industry in general. The

Company may manage its capital structure by issuing new shares, repurchasing outstanding shares,

adjusting capital spending, or disposing of assets.

The capital structure is reviewed by management and the Board of Directors on an ongoing basis.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 33

The Company considers its capital to be equity, which comprises share capital, reserves and deficit,

which at June 30, 2011, totaled $18,346,599 (December 31, 2010 - $18,831,884).

The Company manages capital through its financial and operational forecasting processes. The Company

reviews its working capital and forecasts its future cash flows based on operating expenditures, and other

investing and financing activities. The forecast is updated based on activities related to its mineral

properties. Selected information is provided to the Board of Directors of the Company. The Company’s

capital management objectives, policies and processes have remained unchanged during the three and

six months ended June 30, 2011.

The Company is not subject to any external capital requirements.

Outlook

For the remainder of fiscal 2011, the Company plans to continue its exploration and drilling programs in

Colombia, Mexico and Canada and determine if further work is warranted at the Colombian properties,

the Elora project and the Minera projects. The Company is continually evaluating direct or indirect

acquisitions of additional properties. The Company continues to monitor its spending and will amend its

plans and budgets based on exploration results and expectations of being able to raise financing as and

when required.

Environmental Contingency

The Company’s mining and exploration activities are subject to various government laws and regulations

relating to the protection of the environment. These environmental regulations are continually changing

and generally becoming more restrictive. As of the date of this MD&A, the Company does not believe that

there are any significant environmental obligations requiring material capital outlays in the immediate

future.

Share Capital

As of the date of this MD&A, the Company had 167,046,249 issued and outstanding common shares and

an aggregate of 47,615,918 warrants outstanding. At the date of this MD&A, the Company had

12,830,000 stock options outstanding, each entitling the holder to acquire one common share. Therefore,

the Company had 229,536,269 common shares on a fully diluted basis.

Subsequent Events

(a) Subsequent to June 30, 2011, the following options and warrants were exercised:

• On July 8, 2011, 50,000 stock options with an exercise price of
.175 and expiry date of

December 15, 2014 were exercised for cash proceeds of $8,750. In addition, 150,000 stock

options with an exercise price of
.175 and expiry of June 22, 2015 were exercised for cash

proceeds of $26,250.

• On July 8, 2011, 150,000 stock options with an exercise price of
.175 and expiry date of

December 15, 2014 were exercised for cash proceeds of $26,250. In addition, 150,000 stock

options with an exercise price of
.10 and expiry of August 13, 2014 were exercised for cash

proceeds of $15,000.

• On July 8, 2011, 200,000 warrants with an exercise price of
.25 and an expiry date of June 9,

2012 were exercised for cash proceeds of $50,000.

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 34

• On July 20, 2011, 100,000 warrants with an exercise price of
.16 and an expiry date of October

22, 2011 were exercised for cash proceeds of $16,000.

(b) On July 25, 2011, the Company granted incentive stock options to its directors, officers, employees

and consultants entitling them to purchase an aggregate of 865,000 shares in the capital of the company

subject to the policies of the TSX Venture Exchange. The options are exercisable until July 25, 2016 at a

price of
.28 per share.

Risks and Uncertainties

An investment in the securities of the Company is highly speculative and involves numerous and

significant risks. Only investors whose financial resources are sufficient to enable them to assume such

risks and who have no need for immediate liquidity in their investment should undertake such investment.

Prospective investors should carefully consider the risk factors that have affected, and which in the future

are reasonably expected to affect, the Company and its financial position. Please refer to the section

entitled "Risks and Uncertainties" in the Company's management's discussion and analysis for the fiscal

year ended December 31, 2010, available on SEDAR at www.sedar.com. There have been no

significant changes to such risk factors since the date thereof.

In addition to the risks outlined in the Company’s December 31, 2010 MD&A, Seafield has identified the

extreme volatility occurring in the financial markets as at the date hereof as a significant risk for the

Company. As a result of the market turmoil, investors are moving away from assets they perceive as risky

to those they perceive as safe and less risky. Companies like Seafield are considered risk assets and as

mentioned above are highly speculative. The volatility in the markets and investor sentiment may make it

difficult for Seafield to access the capital markets in order to raise the capital it will need to fund its current

level of expenditures.

Disclosure of Internal Controls

Management has established processes to provide them sufficient knowledge to support representations

that they have exercised reasonable diligence that (i) the unaudited condensed interim consolidated

financial statements do not contain any untrue statement of material fact or omit to state a material fact

required to be stated or that is necessary to make a statement not misleading in light of the

circumstances under which it is made, as of the date of and for the years presented by the unaudited

condensed interim consolidated financial statements, and (ii) the unaudited condensed interim

consolidated financial statements fairly present in all material respects the financial condition, results of

operations and cash flow of the Company, as of the date of and for the years presented.

In contrast to the certificate required for non-venture issuers under National Instrument 52-109,

Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”), the Venture Issuer Basic

Certificate does not include representations relating to the establishment and maintenance of disclosure

controls and procedures (“DC&P”) and internal control over financial reporting (“ICFR”), as defined in NI

52-109. In particular, the certifying officers filing this certificate are not making any representations

relating to the establishment and maintenance of:

(i) controls and other procedures designed to provide reasonable assurance that information required to

be disclosed by the issuer in its annual filings, interim filings or other reports filed or submitted under

securities legislation is recorded, processed, summarized and reported within the time periods specified

in securities legislation; and

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 35

(ii) a process to provide reasonable assurance regarding the reliability of financial reporting and the

preparation of financial statements for external purposes in accordance with the issuer’s GAAP (IFRS).

The issuer’s certifying officers are responsible for ensuring that processes are in place to provide them

with sufficient knowledge to support the representations they are making in the certificate. Investors

should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design

and implement on a cost effective basis DC&P and ICFR as defined in NI 52-109 may result in additional

risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports

provided under securities legislation.

Additional Disclosure for Venture Issuers Without Significant Revenue

A summary of general and administrative for the periods set forth below is as follows:

Detail

Six months

ended

June 30,

2011

$

Six months

ended

June 30,

2010

$

Accounting and corporate services 29,848 19,074

Consulting fees 871,210 119,000

Investors relations 80,720 305,168

Travel 68,393 nil

Administrative and general 32,520 49,340

Regulatory costs 99,828 72,485

Professional fees 31,382 37,237

Salaries and benefits 1,341,052 595,400

Total 2,554,953 1,197,704

Seafield Resources Ltd.

Management’s Discussion & Analysis

Three and Six Months Ended June 30, 2011

Discussion dated: August 25, 2011

www.sffresources.com Page | 36

Detail

Three months

ended

June 30,

2011

$

Three months

ended

June 30,

2010

$

Accounting and corporate services 11,883 7,678

Consulting fees 781,210 69,000

Investors relations 53,734 294,268

Travel 68,393 nil

Administrative and general 17,293 23,774

Regulatory costs 70,633 50,138

Professional fees 14,417 18,137

Salaries and benefits 1,289,375 270,400

Total 2,306,938 733,395