Operating costs skyrocketed Aggregate operating expenses for the year ended November 30, 2013 were $16,606,177 representing an increase of $11,690,986
or 237.9% from $4,915,191 for the year ended November 30, 2012. Stripping, clearing and crushing expenses of $3,011,390 were
incurred during YE 2013, which primarily consisted of subcontractor crushing expense at the Logan pit, and crushing related payroll
costs at the Kearl pit. During YE 2012 $3,271,468 was spent on stripping, clearing and crushing expenses. Amortization,
depreciation and depletion expense was $1,471,558 during YE 2013 compared with $379,082 during YE 2012. The increase was
due to increased property and equipment depreciation expense at corporate-owned pits, and increased corporate pit production,
thus increasing depletion of corporate-owned pit setup costs and amortization of decommissioning and restoration costs. All other
aggregate operating expenses increased by 858.6% during YE 2013, up $10,858,588 to $12,123,229 compared to $1,264,641
during YE 2012. $6,433,145 of this increase was due to hauling costs for corporate-owned pit sales. YE 2013 additional cost
increases in other aggregate operating expenses involved: diesel and other fuel costs- $1,609,636; aggregate operations payroll
costs- $1,957,490; accommodation and meal costs for work crews- $1,319,091; equipment repair and maintenance and rentals-
$2,230,686; and other less significant cost increases totaling $742,704. These cost increases were decreased by $3,434,164,
representing the net change in the cost of goods produced less the costs of goods sold between fiscal 2013 and fiscal 2012.