Samex Mining 6K Interim Condensed Consolidated Financial Statements | SMXME 30 Nov 11

THIRD QUARTER

Interim Condensed Consolidated Financial Statements

For The

Nine Months Ended September 30, 2011

(Expressed in Canadian Dollars)

(Unaudited And Subject To Year-End Adjustments)

S A M E X M I N I N G C O R P.

SAMEX MINING CORP.

301 - 32920 Ventura Ave.

Abbotsford, BC V2S 6J3

CANADA

TEL: (604) 870-9920

FAX: (604) 870-9930

TOLL FREE: 1-800-828-1488

EMAIL: 2samex@samex.com

WEB: www.samex.com

TRADING SYMBOLS:

SXG - TSX Venture Exch.

SMXMF - OTC BB

NOTICE TO READER

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim financial statements, they must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim consolidated financial statements have been prepared by and are the responsibility of the management.

The Company's independent auditor has not performed a review of these financial statements in accordance with the standards established by the Canadian Institute of Chartered Accountants for a review of interim financial statements by an entity's auditor.

SAMEX MINING CORP.

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

	SEPTEMBER 30,			DECEMBER 31,			JANUARY 1,
	2011			2010			2010
				(NOTE 14)			(NOTE 14)

ASSETS

CURRENT ASSETS
CASH	$	4,560,474		$	4,870,337		$	1,020,863
GOLD AND SILVER BULLION (NOTE 4)		6,948,063			4,107,333			757
OTHER CURRENT ASSETS (NOTE 5)		45,876			32,551			39,983

		11,554,413			9,010,221			1,061,603
NON-CURRENT ASSETS
EQUIPMENT (NOTE 6)		72,781			56,445			70,482
MINERAL EXPLORATION ASSETS (NOTE 7)		12,057,348			10,299,789			9,021,953

		12,130,129			10,356,234			9,092,435

TOTAL ASSETS	$	23,684,542		$	19,366,455		$	10,154,038

LIABILITIES

CURRENT TRADE PAYABLES AND ACCRUED LIABILITIES (NOTE 8)	$	28,499		$	91,890		$	73,718

SHAREHOLDERS' EQUITY

SHARE CAPITAL (NOTE 9)		49,974,940			44,702,328			34,543,268
RESERVES (NOTE 10)		6,498,090			3,571,617			3,392,015
DEFICIT		(32,816,987	)		(28,999,380	)		(27,854,963	)

		23,656,043			19,274,565			10,080,320

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	23,684,542		$	19,366,455		$	10,154,038

APPROVED BY THE DIRECTORS

	“Jeffrey P. Dahl”

	“Larry D. McLean”

SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SAMEX MINING CORP.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

	THREE MONTH PERIODS ENDED						NINE MONTH PERIODS ENDED
	SEPTEMBER 30,						SEPTEMBER 30,
	2011			2010			2011			2010
										(NOTE 14)

EXPENSES
AMORTIZATION	$	8,897		$	8,809		$	26,692		$	26,932
CONSULTING FEES		6,398			4,599			27,689			15,133
FINANCE CHARGE (NOTE 9)		-			-			359,975			-
FOREIGN EXCHANGE		28,807			(69,824	)		40,340			(22,161	)
INTEREST AND BANK CHARGES		8,630			931			19,617			2,163
MINERAL INTERESTS ADMINISTRATION AND INVESTIGATION COSTS		70,794			47,695			249,702			140,301
OFFICE AND MISCELLANEOUS		34,574			27,780			120,192			80,181
PROFESSIONAL FEES		31,117			30,405			80,693			61,022
REGULATORY FEES		2,507			2,525			24,447			20,827
SALARIES AND BENEFITS		108,752			91,681			505,470			283,359
STOCK-BASED COMPENSATION (NOTE 9)		92,100			99,720			2,274,920			126,535
TRANSFER AGENT FEES		5,957			4,936			10,410			9,566
TRAVEL AND PROMOTION		25,718			10,983			106,396			31,831
NET LOSS FOR THE PERIOD		424,251			260,240			3,846,543			775,689

OTHER COMPREHENSIVE LOSS
UNREALIZED (GAIN) LOSS ON GOLD AND SILVER BULLION (NOTE 4)		(498,886	)		(24,760	)		(857,626	)		(21,852	)

TOTAL OTHER COMPREHENSIVE (INCOME) LOSS		(498,886	)		(24,760	)		(857,626	)		(21,852	)

TOTAL COMPREHENSIVE (INCOME) LOSS FOR THE PERIOD	$	(74,635	)	$	235,480		$	2,988,917		$	753,837

LOSS PER SHARE BASIC AND DILUTED (NOTE 9)	$	(0.01	)	$	(0.01	)	$	(0.03	)	$	(0.01	)

SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SAMEX MINING CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

	SHARE CAPITAL				RESERVES
					SHARE-BASED			INVESTMENT
	NUMBER				PAYMENT			REVALUATION
	OF SHARES		AMOUNT		RESERVE			RESERVE		DEFICIT			TOTAL

RESTATED BALANCE AT JANUARY 1, 2010 (NOTE 14)		96,856,665	$	34,543,268	$	3,391,552		$	463	$	(27,854,963	)	$	10,080,320
COMPREHENSIVE INCOME:
LOSS FOR THE PERIOD		-		-		-			-		(649,154	)		(649,154	)
OTHER COMPREHENSIVE INCOME (LOSS)		-		-		-			21,852		-			21,852
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD		-		-		-			21,852		(649,154	)		(627,302	)
TRANSACTIONS WITH OWNERS, IN
THEIR CAPACITY AS OWNERS, AND
OTHER TRANSFERS
SHARES ISSUED FOR CASH -PRIVATE PLACEMENT		3,647,334		1,091,200		-			-		-			1,091,200
WARRANT EXERCISE		1,035,000		207,000		-			-		-			207,000
SHARE-BASED PAYMENTS (NOTE 10)		-		-		70,790			-		(70,790	)		-
TOTAL TRANSACTIONS WITH OWNERS
AND OTHER TRANSFERS		4,682,334		1,298,200		70,790			-		(70,790	)		1,298,200
RESTATED BALANCE AT SEPTEMBER 30, 2010		101,538,999	$	35,841,468	$	3,462,342		$	22,315	$	(28,574,907	)	$	10,751,218
RESTATED BALANCE AT JANUARY 1, 2011 (NOTE 14)		119,467,719	$	44,702,328	$	3,462,342		$	109,275	$	(28,999,380	)	$	19,274,565
COMPREHENSIVE INCOME:
LOSS FOR THE PERIOD		-		-		359,975			-		(1,571,623	)		(1,211,648	)
OTHER COMPREHENSIVE INCOME (LOSS)		-		-		-			857,626		-			857,626
TOTAL COMPREHENSIVE LOSS FOR THE PERIOD		-		-		359,975			857,626		(1,571,623	)		(354,022	)
TRANSACTIONS WITH OWNERS, IN
THEIR CAPACITY AS OWNERS, AND
OTHER TRANSFERS
SHARES ISSUED FOR CASH - WARRANT EXERCISE		6,941,000		4,675,500		-			-		-			4,675,500
OPTION EXERCISE		300,000		103,540		(43,540	)		-		-			60,000
FINANCE CHARGE - WARRANT EXERCISE		-		493,572		(493,572	)		-		-			-
SHARE-BASED PAYMENTS (NOTE 10)		-		-		2,245,984			-		(2,245,984	)		-
TOTAL TRANSACTIONS WITH OWNERS
AND OTHER TRANSFERS		7,241,000		5,272,612		1,708,872			-		(2,245,984	)		4,735,500
BALANCE AT SEPTEMBER 30, 2011		126,708,719	$	49,974,940	$	5,531,189		$	966,901	$	(32,816,987	)	$	23,656,043

SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SAMEX MINING CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

	NINE MONTHS ENDED
	SEPTEMBER 30,
	2011			2010

CASH PROVIDED (USED) BY

OPERATING ACTIVITIES

NET LOSS FOR THE PERIOD	$	(3,846,543	)	$	(775,689	)
ADJUSTMENTS FOR NON-CASH ITEMS:
AMORTIZATION		26,692			26,932
FINANCE CHARGE		359,975			-
GOLD AND SILVER BULLION VAULT FEES		16,845			-
STOCK-BASED COMPENSATION		2,274,920			126,535
CHANGES IN NON-CASH WORKING CAPITAL ITEMS
OTHER CURRENT ASSETS		(13,325	)		4,520
TRADE PAYABLES AND ACCRUED LIABILITIES		(63,391	)		(45,421	)

NET CASH FLOWS FROM (USED IN) OPERATING ACTIVITIES		(1,244,827	)		(663,123	)

INVESTING ACTIVITIES

EXPENDITURES ON MINERAL EXPLORATION ASSETS		(1,757,559	)		(664,731	)
EXPENDITURES ON EQUIPMENT		(43,028	)		(12,732	)
PURCHASE OF GOLD AND SILVER BULLION		(1,999,949	)		(199,848	)

NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES		(3,800,536	)		(877,311	)

FINANCING ACTIVITIES

PROCEEDS ON ISSUANCE OF COMMON SHARES - NET OF SHARE ISSUE COSTS		4,735,500			1,298,200

NET CASH FLOWS FROM (USED IN) INVESTING ACTIVITIES		4,735,500			1,298,200

INCREASE (DECREASE) IN CASH FOR THE PERIOD		(309,863	)		(242,234	)

CASH, BEGINNING		4,870,337			1,020,863

CASH, ENDING	$	4,560,474		$	778,629

SEE ACCOMPANYING NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

1.	NATURE AND CONTINUANCE OF OPERATIONS

SAMEX Mining Corp. (the “Company”) was incorporated on December 15, 1967 under the laws of the province of British Columbia, Canada, and its principal activity is the acquisition and exploration of mineral properties in South America, particularly in the countries of Chile and Bolivia. The Company’s shares are traded on the TSX Venture Exchange (“TSX-V”) under the symbol “SXG”.

The head office and principal address of the Company is located at #301 - 32920 Ventura Ave., Abbotsford, British Columbia, Canada V2S 6J3. The Company’s registered address and records office is located at #2760 - 200 Granville Street, Vancouver, British Columbia, Canada, V6C 1S4.

These unaudited condensed consolidated interim financial statements have been prepared on the assumption that the Company and its subsidiaries (the “Group”) will continue as a going concern, meaning it will continue in operation for the foreseeable future and will be able to realize assets and discharge liabilities in the ordinary course of operations. Different bases of measurement may be appropriate if the Company is not expected to continue operations for the foreseeable future. As at September 30, 2011 the Company had not advanced its properties to commercial production and is not able to finance day to day activities through operations. The Company’s continuation as a going concern is dependent upon the successful results from its mineral properties exploration activities and its ability to attain profitable operations and generate funds there from and/or raise equity capital or borrowings sufficient to meet current and future obligations. Management intends to finance operating costs over the next twelve months with funds on hand and by private placement of common shares and the exercise of warrants.

2.	SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION

Statement of compliance and conversion to International Financial Reporting Standards

The consolidated interim financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (“IFRS”) issued by the International Accounting Standards Board (“IASB”) and interpretations of the International Financial Reporting Interpretations Committee (“IFRIC”). Therefore, these financial statements comply with International Accounting Standard (“IAS”) 34 “Interim Financial Reporting”.

This interim financial report does not include all of the information required of a full annual financial report and is intended to provide users with an update in relation to events and transactions that are significant to an understanding of the changes in financial position and performance of the Group since the end of the last annual reporting period. It is therefore recommended that this financial report be read in conjunction with the annual financial statements of the Group for the year ended December 31, 2010 and the interim condensed consolidated financial statements for three-months ended March 31, 2011. This interim financial report provides selected significant disclosures that are required in the annual financial statements under IFRS. The disclosures concerning the transition from Canadian Generally Accepted Accounting Principles (“Canadian GAAP”) to IFRS are provided in Note 14.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

2.	SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Basis of preparation

The consolidated financial statements of the Group have been prepared on an accrual basis and are based on historical costs, modified where applicable. The consolidated financial statements are presented in Canadian dollars unless otherwise noted.

Consolidation

The consolidated financial statements include the accounts of the Company and its controlled entities. Details of controlled entities are as follows:

		Percentage Owned
	Country of	September 30,
	Incorporation	2011			2010

South American Mining & Exploration Corp. (“S.A.M.E.X.”)	Canada		100.0	%		100.0	%
Samex International Ltd.	Bahamas		100.0	%		100.0	%
Minera Samex Chile S.A.	Chile		99.9	%		99.9	%
Empresa Minera Boliviana S.A. (“Emibol”)	Bolivia		98.0	%		98.0	%
Samex S.A.	Bolivia		98.0	%		98.0	%
Minas Bolivex S.A. (“Bolivex”)	Bolivia		98.0	%		98.0	%

Inter-company balances and transactions, including unrealized income and expenses arising from inter-company transactions, are eliminated on consolidation.

Significant accounting judgments, estimates and assumptions

The preparation of the Company’s consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the reported amounts of assets, liabilities and contingent liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. However, actual outcomes can differ from these estimates.

Areas requiring a significant degree of estimation and judgment relate to the determination of the useful lives of property, plant and equipment, the recoverability of the carrying value of exploration and evaluation assets, fair value measurements for financial instruments and stock-based compensation and other equity-based payments, the recognition and valuation of provisions for restoration and environmental liabilities, and the recoverability and measurement of deferred tax assets and liabilities. Actual results may differ from those estimates and judgments.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

2.	SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Foreign currency translation

The functional currency of the Group’s entities is the Canadian dollar and the consolidated financial statements of the Company are presented in Canadian dollars. The functional currency (the Canadian dollar) is measured relative to other currencies used by the entities in the economic environments in which they operate. The Chilean subsidiary, Minera Samex Chile S.A., used the Chilean peso for its day to day operations and its financial statements are expressed in Chilean pesos. The subsidiaries in Bolivia use the boliviano and the United States dollar for their day to day operations and their financial statements are expressed in both bolivianos and United States dollars. At the end of each reporting period, the results and financial position in the financial statements of each of the foreign subsidiaries are translated into the functional currency, the Canadian dollar, and presented in the consolidated financial statements of the Company in Canadian dollars.

Transactions and balances:

Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the period-end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

Exchange differences arising on the translation of monetary items or on settlement of monetary items are recognized in profit or loss in the statement of comprehensive income in the period in which they arise, except where deferred in equity as a qualifying cash flow or net investment hedge.

Exchange differences arising on the translation of non-monetary items are recognized in other comprehensive income in the statement of comprehensive income to the extent that gains and losses arising on those non-monetary items are also recognized in other comprehensive income. Where the non-monetary gain or loss is recognized in profit or loss, the exchange component is also recognized in profit or loss.

Exploration and evaluation expenditures

Mineral exploration and evaluation expenditures include the costs of acquiring licenses, costs associated with exploration and evaluation activity, and the fair value (at acquisition date) of exploration and evaluation assets acquired in a business combination. Mineral exploration and evaluation expenditures are capitalized as "Mineral Exploration Assets". Costs incurred before the Group has obtained the legal rights to explore an area are recognized in profit or loss.

Government tax credits received are recorded as a reduction to the cumulative costs incurred and capitalized on the related property.

Mineral exploration assets are assessed for impairment if (i) sufficient data exists to determine technical feasibility and commercial viability, and (ii) facts and circumstances suggest that the carrying amount exceeds the recoverable amount.

Once the technical feasibility and commercial viability of the extraction of mineral resources in an area of interest are demonstrable, mineral exploration assets attributable to that area of interest are first tested for impairment and then reclassified to mining property and development assets within property, plant and equipment.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

2.	SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Exploration and evaluation expenditures (Continued)

Recoverability of the carrying amount of any mineral exploration assets is dependent on successful development and commercial exploitation, or alternatively, sale of the respective areas of interest.

Share-based payments

The Group operates an employee stock option plan. Share-based payments to employees are measured at the fair value of the instruments issued and amortized over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the share-based payment reserve. The fair value of options is determined using a Black–Scholes pricing model which incorporates all market vesting conditions. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognized for services received as consideration for the equity instruments granted shall be based on the number of equity instruments that eventually vest.

Financial instruments

The Group follows Canadian Institute of Chartered Accountants (“CICA”) Handbook Sections 3855, “Financial Instruments - Recognition and Measurement”. Under Section 3855, financial instruments must be classified into one of five categories: held-for-trading, held-to-maturity, loans and receivables, available-for-sale financial assets, or other financial liabilities. All financial instruments, including derivatives, are measured at the balance sheet date at fair value except for loans and receivables, held-to-maturity investments, and other financial liabilities which are measured at amortized cost. The Company’s financial instruments consist of cash, gold and silver bullion and accounts payable. Cash, which is measured at its face value, representing fair value, is classified as held for trading. Gold and silver bullion, which are measured at fair value, are classified as available-for-sale financial assets. Accounts payable, which are measured at amortized cost, are classified as other financial liabilities. The Company has determined that it does not have derivatives or embedded derivatives.

The CICA Handbook Section 3862, Financial Instruments – Disclosure, requires an entity to classify fair value measurements in accordance with an established hierarchy that prioritizes the inputs in valuation techniques used to measure fair value. The levels and inputs which may be used to measure fair value are as follows:

·	Level 1 – fair values are based on quoted prices in active markets for identical assets or liabilities;

·	Level 2 – fair values are based on inputs other than quoted prices that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices); or

·	Level 3 – applies to assets and liabilities for inputs that are not based on observable market data, which are unobservable inputs.

Financial instruments classified as level 1 includes cash and gold and silver bullion.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

2.	SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Impairment of assets

The carrying amount of the Group’s assets (which include equipment and mineral exploration assets) is reviewed at each reporting date to determine whether there is any indication of impairment. If such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss. An impairment loss is recognized whenever the carrying amount of an asset or its cash generating unit exceeds its recoverable amount. Impairment losses are recognized in the statement of income and comprehensive income.

The recoverable amount of assets is the greater of an asset’s fair value less cost to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects the current market assessments of the time value of money and the risks specific to the asset. For an asset that does not generate cash inflows largely independent of those from other assets, the recoverable amount is determined for the cash-generating unit to which the asset belongs.

An impairment loss is only reversed if there is an indication that the impairment loss may no longer exist and there has been a change in the estimates used to determine the recoverable amount, however, not to an amount higher than the carrying amount that would have been determined had no impairment loss been recognized in previous years.

Assets that have an indefinite useful life are not subject to amortization and are tested annually for impairment.

Income taxes

Deferred income tax:

Deferred income tax is provided using the balance sheet method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and recognized only to the extent that it is probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilized.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period.

Deferred income tax assets and deferred income tax liabilities are offset, if a legally enforceable right exists to set off current tax assets against current income tax liabilities and the deferred income taxes relate to the same taxable entity and the same taxation authority.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

2.	SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PREPARATION (CONTINUED)

Restoration and environmental obligations

The Group recognizes liabilities for statutory, contractual, constructive or legal obligations associated with the retirement of long-term assets, when those obligations result from the acquisition, construction, development or normal operation of the assets. The net present value of future restoration cost estimates arising from the decommissioning of plant and other site preparation work is capitalized to exploration and evaluation assets along with a corresponding increase in the restoration provision in the period incurred. Discount rates using a pre-tax rate that reflect the time value of money are used to calculate the net present value. The restoration asset will be depreciated on the same basis as other mining assets.

The Group’s estimates of restoration costs could change as a result of changes in regulatory requirements, discount rates and assumptions regarding the amount and timing of the future expenditures. These changes are recorded directly to mining assets with a corresponding entry to the restoration provision. The Group’s estimates are reviewed annually for changes in regulatory requirements, discount rates, effects of inflation and changes in estimates.

Changes in the net present value, excluding changes in the Group’s estimates of reclamation costs, are charged to profit and loss for the period.

The net present value of restoration costs arising from subsequent site damage that is incurred on an ongoing basis during production are charged to profit or loss in the period incurred.

The costs of restoration projects that were included in the provision are recorded against the provision as incurred. The costs to prevent and control environmental impacts at specific properties are capitalized in accordance with the Group’s accounting policy for exploration and evaluation assets.

Equipment

Equipment is stated at historical cost less accumulated depreciation and accumulated impairment losses.

Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the statement of income and comprehensive income during the financial period in which they are incurred.

Gains and losses on disposals are determined by comparing the proceeds with the carrying amount and are recognized in profit or loss.

Depreciation and amortization are calculated on a straight-line method to write off the cost of the assets to their residual values over their estimated useful lives. The depreciation and amortization rates applicable to each category of equipment are as follows:

Class of equipment Depreciation rate

Motor vehicles 5 years

Exploration equipment 4 to 8 years

Office equipment 4 to 10 years

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

3.	ACCOUNTING STANDARDS ISSUED BUT NOT YET EFFECTIVE

In May 2011, the IASB issued the following standards which have not yet been adopted by the Corporation: IFRS 10, Consolidated Financial Statements (“IFRS 10”), IFRS 11, Joint Arrangements (“IFRS 11”), IFRS 12, Disclosure of Interests in Other Entities (“IFRS 12”), IAS 27, Separate Financial Statements (“IAS 27”), IFRS 13, Fair Value Measurement (“IFRS 13”) and amended IAS 28, Investments in Associates and Joint Ventures (“IAS 28”). Each of the new standards is effective for annual periods beginning on or after January 1, 2013 with early adoption permitted. The Corporation has not yet begun the process of assessing the impact that the new and amended standards will have on its financial statements or whether to early adopt any of the new requirements.

The following is a brief summary of the new standards: IFRS 10 requires an entity to consolidate an investee when it is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Under existing IFRS, consolidation is required when an entity has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. IFRS 10 replaces SIC-12 Consolidation—Special Purpose Entities and parts of IAS 27 Consolidated and Separate Financial Statements.

IFRS 11 requires a venturer to classify its interest in a joint arrangement as a joint venture or joint operation. Joint ventures will be accounted for using the equity method of accounting whereas for a joint operation the venture will recognize its share of the assets, liabilities, revenue and expenses of the joint operation. Under existing IFRS, entities have the choice to proportionately consolidate or equity account for interests in joint ventures. IFRS 11 supersedes IAS 31, Interests in Joint Ventures, and SIC-13, Jointly Controlled Entities—Non-monetary Contributions by Venturers.

IFRS 12 establishes disclosure requirements for interests in other entities, such as joint arrangements, associates, special purpose vehicles and off balance sheet vehicles. The standard carries forward existing disclosures and also introduces significant additional disclosure requirements that address the nature of, and risks associated with, an entity’s interests in other entities.

IFRS 13 is a comprehensive standard for fair value measurement and disclosure requirements for use across all IFRSs. The new standard clarifies that fair value is the price that would be received to sell an asset, or paid to transfer a liability in an orderly transaction between market participants, at the measurement date. It also establishes disclosures about fair value measurement. Under existing IFRS, guidance on measuring and disclosing fair value is dispersed among the specific standards requiring fair value measurements and in many cases does not reflect a clear measurement basis or consistent disclosures.

In addition, there have been amendments to existing standards, including IAS 27 and IAS 28. IAS 27 addresses accounting for subsidiaries, jointly controlled entities and associates in non-consolidated financial statements. IAS 28 has been amended to include joint ventures in its scope and to address the changes in IFRS 10 – 13.

4.	SHORT-TERM INVESTMENTS

Short-term investments consist of holdings of gold and silver bullion.

Gold and Silver Bullion Holdings - During the three month period ended September 30, 2011, the Company did not purchase any additional gold and silver bullion to hold in lieu of cash. The Company held 87,406.141 grams of gold and 70,196.106 ounces of silver which had a market value of $6,948,063 at September 30, 2011.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

5.	ACCOUNTS RECEIVABLE

	Sepember 30,		December 31,
	2011		2010

Value-added tax receivable	$	8,179	$	8,916
Other receivables		37,697		23,635

	$	45,876	$	32,551

6. EQUIPMENT

	Motor			Exploration			Office
	Vehicles			Equipment			Equipment		Total

Cost
At December 31, 2010	$	150,225		$	61,329		$	132,321	$	343,875
Additions		26,735			-			16,293		43,028
Disposals		(18,510	)		-			-		(18,510	)
At September 30, 2011		158,450			61,329	��		148,614		368,393
Depreciation
At December 31, 2010		114,833			59,544			113,053		287,430
Charge for the period		18,821			1,164			6,707		26,692
Disposals		(18,510	)		-			-		(18,510	)
At September 30, 2011		115,144			60,708			119,760		295,612
Net book value
At December 31, 2010		35,392			1,785			19,268		56,445
At September 30, 2011	$	43,306		$	621		$	28,854	$	72,781

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

6. EQUIPMENT (CONTINUED)

	Motor		Exploration		Office
	Vehicles		Equipment		Equipment		Total

Cost
At January 1, 2010	$	124,308	$	61,169	$	128,379	$	313,856
Additions		25,917		160		3,942		30,019
At December 31, 2010		150,225		61,329		132,321		343,875
Depreciation
At January 1, 2010		91,060		47,476		104,838		243,374
Charge for the period		23,773		12,068		8,215		44,056
At December 31, 2010		114,833		59,544		113,053		287,430
Net book value
At January 1, 2010		33,248		13,693		23,541		70,482
At December 31, 2010	$	35,392	$	1,785	$	19,268	$	56,445

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

7.	MINERAL EXPLORATION ASSETS

	Chile										Bolivia
									Miscellaneous		Eskapa		Total for nine		Total for
	Los Zorros		Chimberos		INCA		Espejismo		Properties -		El Desierto		months ended		year ended
									Chile		Santa Isabel		Sep. 30, 2011		Dec. 31, 2010
Property acquisition costs
Balance beginning of period	$	1,289,919	$	14,298	$	1,768,993	$	1,000	$	1,000	$	3,000	$	3,078,210	$	3,056,457
Additions		69,549		-		150,883		-		-		-		220,432		23,688
Write-down due to impairment		-		-		-		-		-		-		-		(1,935	)
Balance end of period	$	1,359,468	$	14,298	$	1,919,876	$	1,000	$	1,000	$	3,000	$	3,298,642	$	3,078,210

Exploration and evaluation costs
Balance beginning of period	$	5,179,191	$	153,887	$	1,888,501	$	-	$	-	$	-	$	7,221,579	$	5,965,496
Costs incurred during period
Amortization		-		-		-		-		-		-		-		5,287
Drilling and sub-contracts		573,563		3,555		40,802		-		-		-		617,920		506,491
Field camp supplies		25,234		-		12,958		-		-		596		38,788		41,960
Geology, mapping, surveys		485,986		-		-		-		-		-		485,986		263,573
Legal		3,112		-		-		-		-		876		3,988		8,123
Property patent payments		130,117		-		5,852		-		-		-		135,969		159,324
Site/project administration		13,021		-		38,150		-		-		-		51,171		75,795
Travel and accommodation		30,951		-		717		-		-		-		31,668		-
		1,261,984		3,555		98,479		-		-		1,472		1,365,490		1,060,553
Other
Advance royalty payments		97,740		-		-		-		-		-		97,740		106,203
Value-added taxes		73,897		-		-		-		-		-		73,897		124,528
Write-down due to impairment		-		-		-		-		-		-		-		(35,201	)
		171,637		-		-		-		-		-		171,637		195,530
Balance end of period	$	6,612,812	$	157,442	$	1,986,980	$	-	$	-	$	1,472	$	8,758,706	$	7,221,579
Total	$	7,972,280	$	171,740	$	3,906,856	$	1,000	$	1,000	$	4,472	$	12,057,348	$	10,299,789

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

7.	MINERAL EXPLORATION ASSETS (CONTINUED)

The following is a description of the Group’s mineral exploration assets and the related spending commitments:

The Company has invested in various mineral interests located in Chile and Bolivia. The mineral interests have been acquired by purchase agreements, staking, option agreements, purchase at government auctions, or by earning a percentage interest in certain properties pursuant to a joint venture or other type of agreement. Government patent fees must be paid each year in order to keep the mineral concessions valid and in effect.

CHILE

Los Zorros Property – As described below, the Company has a 100% interest in approximately 7,782 hectares of mineral concessions acquired by staking, purchase at government auction, purchase agreement, and by option contracts. The Company also has an option to acquire a 100% interest in approximately 3,000 hectares of adjacent mineral concessions.

Minera Ojos del Salado Purchase – The Company acquired a 100% interest in 1,429 hectares of mineral interests for U.S. $50,000 (paid). The vendor retained a back-in option to earn a 30% to 51% interest in the event that the Company discovers a deposit containing not less than 2,000,000 tonnes of contained equivalent copper on the property.

Hochschild Option – The Company acquired a 100% interest in 209 hectares of mineral interests for consideration of option payments totaling U.S. $230,000 (paid). The concessions are subject to an NSR of up to 2%. The Company has the option to buyout the NSR at any time for U.S. $1,800,000. As the concessions were not in production as at December 31, 2007, the Company is required to pay annual advance NSR payments of U.S. $100,000 per year from February 29, 2008 to March 1, 2012 to a maximum of U.S. $500,000 (U.S. $400,000 paid). The advance NSR payments are recoverable from future NSR payments.

San Estaban Option – The Company acquired a 100% interest in 95 hectares of mineral interests for consideration of option payments totaling U.S. $200,000 (paid). A 1.5% NSR retained by the vendor.

Geosupply Servicios Bonus and Royalty - Pursuant to a consulting agreement dated September 25, 2002 the concessions above comprising the Los Zorros property are subject to a bonus of U.S. $150,000 payable within one year from the date of commencement of commercial production on the concessions; and to a 0.25% NSR.

Aravena Option – The Company has an option to acquire a 100% interest in approximately 3,000 hectares of mineral concessions adjacent to the Los Zorros property by making option payments totaling the Chilean peso equivalent of U.S. $250,000. The option payments are due: U.S. $60,000 due on signing (paid); U.S. $100,000 due January 31, 2012 and U.S. $90,000 due January 31, 2013. The vendor did not retain an NRS on the concessions.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

7.	MINERAL EXPLORATION ASSETS (CONTINUED)

CHILE (CONTINUED)

Chimberos Property – The Company has a 100% interest in approximately 1,672 hectares of mineral concessions acquired by staking and purchasing concessions at government auction.

iii.

INCA Property – As described below, the Company has a 100% interest in approximately 3,513 hectares of mineral concessions acquired by staking, purchase at government auction, a purchase agreement, and two option agreements:

Araya Option – The Company acquired a 100% interest in 45 hectares of mineral interests (the Providencia Mine concessions situated within the greater INCA project area) for consideration of option payments totaling U.S. $300,000 (paid). A 1% NSR retained by the vendor for a period of 20 years. The Company has the option to buyout the NSR at any time for U.S. $500,000.

Rojas Option – The Company acquired a 100% interest in 20 hectares of mineral concessions for consideration of U.S. $ 300,000 (paid). The vendor did not retain an NRS on the concessions

The Company also has the option to acquire additional mineral concessions in the INCA project area pursuant to the Minera Porvenir Option agreement:

Minera Porvenir Option - Option to acquire 2,138 hectares of mineral interests for consideration of U.S. $2,000,000 (U.S. $1,000,000 paid). Option payment due: U.S. $1,000,000 comprised of U.S. $38,500 (has not been paid) payable on behalf of the optionor to a third party when they resolve certain title issues on a 85-hectare portion of the property, and U.S. $961,500 that was due March 31, 2009 (has not been paid). A 1% NSR has been retained by the vendor and the vendor has the right to purchase up to 50% of any oxide-copper production at cost from the Company (to a limit of 10,000 tonnes per month) and subject to a cumulative maximum of 1,200,000 tonnes or ten years, whichever is reached first.

The Company has not made the option payment of U.S. $1,000,000 that was due March 31, 2009 pursuant to the Minera Porvenir Option, therefore the owner may terminate the option by giving 30 days written notice. The Company has not received written notice of default with respect to non-payment of the option payment, however the option may be terminated and the Company may be required to relinquish the option on this portion of the INCA property. Due to this possibility, the Company wrote-off a $2,699,263 portion of the deferred expenditures on the INCA property at December 31, 2009.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

7.	MINERAL EXPLORATION ASSETS (CONTINUED)

CHILE (CONTINUED)

iv.

Espejismo Prospects – The Company has 100% interest in approximately 817 hectares of mineral concessions acquired by staking and purchasing concessions at government auction. The property is inactive and no exploration is planned until additional concessions are acquired, consequently the interest was written down at December 31, 2010 to a nominal value of $1,000.

Miscellaneous Property Interests - The Company holds mineral concessions (approximately 25 hectares) for possible future evaluation. The property is inactive and no exploration is currently planned, consequently the interest was written down at December 31, 2010 to a nominal value of $1,000.

BOLIVIA

The Eskapa, El Desierto and Santa Isabel properties in Bolivia have been on "care and maintenance" status since the Company suspended its exploration activities in Bolivia in 2009.

Eskapa Property – The Company has a 99% interest in 3,700 hectares of mineral concessions. The concessions are owned by Empresa Minera El Roble S.A. (“El Roble S.A.”), a company controlled by a Bolivian national, Patricio Kyllmann, a former director of the Company. Emibol earned a 99% interest in any mining operations that may be established on the concessions pursuant to an agreement dated April 16, 1996, and as amended November 23, 1998 with El Roble S.A. The property is subject to a 0.06% NSR and to a U.S. $2,000,000 cash royalty, to be paid out of production on the property in eight equal quarterly payments of U.S. $250,000 beginning after the ninth month of continuous commercial mining operations on the property. The property is inactive and consequently the interest was written down at December 31, 2010 to a nominal value of $1,000.

ii.

El Desierto Property - The Company has a 99% interest in 319 hectares of mineral concessions. The concessions are owned by El Roble S.A. Emibol earned a 99% interest in any mining operations which may be established on the concessions pursuant to an agreement dated April 16, 1996 and as amended November 23, 1998 with El Roble S.A. The property is subject to an NSR of 0.6%. The property is inactive and consequently the interest was written down at December 31, 2010 to a nominal value of $1,000.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

7.	MINERAL EXPLORATION ASSETS (CONTINUED)

BOLIVIA (CONTINUED)

iii. Santa Isabel Property – The Company has an interest in 1,803 hectares of mineral concessions covering a portion of the Goya I and El Bonete concessions pursuant to an agreement between Corporation Minera de Bolivia (“Comibol”) and the Company’s Bolivian subsidiary, Samex S.A. Comibol owns the Goya I and Bonete concessions and pays the annual patents on these concessions. The concessions are subject to a royalty payable to Comibol, equal to 5.5% of net positive cash flow until recovery of capital investment and thereafter 16% of net positive cash flow. The concessions are also subject to a 1.2% Net Profits interest based on Samex S.A.’s net profits interest in the property. Subsequent to 1998, the Company suspended its activities on the property due to certain legal proceedings between Comibol and a third party. Comibol confirmed that a 10-hectare and a 24-hectare portion of the property was subject to a claim by a third party. Samex S.A. advised Comibol that it considered Comibol to be in default of its obligations under the Comibol Agreement because of the dispute, but agreed to await the results of legal proceedings before taking further action. Issues concerning the Agreement between Comibol and Samex S.A. have not yet been resolved. The property is inactive and consequently the interest was written down at December 31, 2010 to a nominal value of $1,000.

8.	TRADE PAYABLES AND ACCRUED LIABILITIES

	September 30,		December 31,
	2011		2010

Trade payables	$	13,499	$	41,890
Amounts due to related parties		-		-
Accrued liabilities		15,000		50,000

	$	28,499	$	91,890

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

9.	SHARE CAPITAL

Authorized share capital

Unlimited number of common shares without par value.

Unlimited number of Preferred Shares - In addition to common shares, the Company’s authorized share capital includes preferred shares without par value, none of which are issued. The board of directors is authorized, without further action by the shareholders, to issue preferred shares in one or more series and to set the number of shares constituting any such series and the designation, rights, privileges, restrictions and conditions attaching to the shares of such series including dividend rights and rates, redemption provisions (including sinking fund provisions), rights of conversion or exchange, liquidation preferences and voting rights, if any. The preferred shares as a class are entitled to priority over the common shares if the board of directors decides to pay any dividends, and, if the Company is dissolved, liquidated or wound up, the preferred shares are entitled as a class to priority in respect of return of capital. Except as required by law or the provisions of any designated series of preferred shares, the holders of preferred shares as a class is not entitled to receive notice of, attend or vote at any meeting of the Company’s shareholders.

Issued share capital

	Number of
	Common Shares		Value
Common Shares
Balance at December 31, 2009		96,856,665	$	34,543,268
Private placement
at $0.30 per share		3,647,334		1,094,200
at $0.50 per share		17,583,720		8,791,860
Financing costs
Cash		-		(3,000	)
Warrants exercised
at $0.20 per share		1,380,000		276,000
Balance at December 31, 2010		119,467,719		44,702,328
Options exercised
at $0.20 per share		300,000		60,000
Stock-based compenstaion - options exercised		-		43,540
Warrants exercised
at $0.20 per share		1,536,000		307,200
at $0.30 per share		500,000		150,000
at $0.70 per share		1,282,500		897,750
at $0.78 per share		1,372,500		1,070,550
at $1.00 per share		2,250,000		2,250,000
Finance charge - warrants exercised		-		493,572
		126,708,719	$	49,974,940

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

9.	SHARE CAPITAL (CONTINUED)

Basic and diluted loss per share

The calculation of basic and diluted loss per share for the nine month period ended September 30, 2011 was based on the loss attributable to common shareholders of $0.03 (2010 - $0.01) and the weighted average number of common shares outstanding of 124,413,386 (2010 - 98,990,776).

Diluted loss per share did not include the effect of outstanding warrants and stock options as the effect would be anti-dilutive.

Warrants

During the third quarter ended September 30, 2011, warrants were exercised for a total of 250,000 shares for total proceeds of $90,000 as follows: 200,000 shares at $0.20 per share and 50,000 at $1.00 per share. The weighted average share price of warrants exercised during the three-month period ended September 30, 2011 was $0.36 (2010 - $0.20).

During the second quarter ended June 30, 2011, warrants were exercised for a total of 3,873,500 shares for total proceeds of $2,800,950 as follows: 1,141,000 shares at $0.20 per share; 532,500 shares at $0.70 per share; and 2,200,000 at $1.00 per share. The weighted average share price of warrants exercised during the three-month period ended June 30, 2011 was $0.72 (2010 - $0.20).

During the first quarter ended March 31, 2011, warrants were exercised for a total of 2,817,500 shares for total proceeds of $1,784,550 as follows: 195,000 shares at $0.20 per share; 500,000 shares at $0.30 per share; 750,000 shares at $0.70 per share; and 1,372,500 at $0.78 per share. The weighted average share price of warrants exercised during the three-month period ended March 31, 2011 was $0.63 (2010 - $0.20). During the first quarter, warrants expired for the purchase of 371,500 shares at $0.78 per share.

Balance					Balance								Balance
Dec. 31,		Issued/			Dec. 31,		Issued/						Sept. 30,		Exercise
2009		(Exercised)			2010		(Exercised)			(Expired)			2011		Price		Term to

	1,744,000		-			1,744,000		(1,372,500	)		(371,500	)	-		$	0.78	Feb. 13, 2011
	1,282,500		-			1,282,500		(1,282,500	)		-		-		$	0.70	Apr. 15, 2011
	2,871,250		-			2,871,250		(2,250,000	)		-			621,250	$	1.00	Mar. 16, 2012
	-		1,823,668			1,823,668		-			-			1,823,668	$	0.35	Jul. 8, 2012
	5,565,500		(1,380,000	)		4,185,500		(1,536,000	)		-			2,649,500	$	0.20	Mar. 24, 2014
	500,000		-			500,000		(500,000	)		-			-	$	0.30	Jun. 29, 2014
	-		17,583,720			17,583,720		-			-			17,583,720	$	0.65	Nov. 1, 2011
															$	or 0.70	to Nov. 1, 2012

	11,963,250		18,027,388			29,990,638		(6,941,000	)		(371,500	)		22,678,138

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

9.	SHARE CAPITAL (CONTINUED)

As at September 30, 2011, the weighted average remaining life of the share purchase warrants is 1.20 years and the weighted average exercise price is $0.58. At December 31, 2010, the weighted average remaining life of the share purchase warrants was 1.71 years and the weighted average exercise price was $0.61.

During the third quarter ended September 30, 2011, warrants to acquire 50,000 shares at $1.00 per share were exercised for proceeds of $50,000 and finance charges totalling $9,074 relating to these warrants were transferred from the stock-based payment reserve to share capital.

During the second quarter ended June 30, 2011, warrants to acquire 2,200,000 shares at $1.00 per share were exercised for proceeds of $2,200,000 and finance charges totalling $484,498 relating to these warrants were transferred from the stock-based payment reserve to share capital.

During the first quarter ended March 31, 2011, the Company extended the term of 2,871,250 warrants at $1.00 per share by one additional year from March 16, 2011 to March 16, 2012. This resulted in an incremental increase in the fair value of the warrants of $359,975 that was expensed as a finance charge in the statements of comprehensive loss.

Stock options

The Company maintains a “rolling” incentive stock option plan (the “Plan”) which authorizes the issuance of common shares to qualified option holders under the Plan. The Plan, which was approved by shareholders at its 2010 Annual General Meeting, authorizes the Board of Directors to grant options to purchase common shares of the Company to any person who is an employee, director, officer, or consultant for the Company or one of its subsidiaries and who is not otherwise prevented from receiving the Option under the terms of applicable policy of the TSX Venture Exchange (the “TSX-V”), or a company which is owned by one or more such individuals (an “Eligible Person”). The maximum number of Common Shares which may be reserved for issuance under the Plan is 10% of the Common Shares outstanding at the time of the grant (on a non-diluted basis) less the aggregate number of Common Shares reserved for issuance under any other existing stock options or similar share compensation arrangement to persons who are eligible to receive options under the Plan. The maximum number which may be reserved for issuance to any one person under the Plan is 5% (unless otherwise approved by a majority of disinterested shareholders, which approval has not been sought or granted). The Board is entitled, subject to the requirements of applicable TSX-V policy, to set the exercise price of each option (provided it is greater than the minimum prescribed under TSX-V Policy), the term during which it may be exercised (to a maximum of 10 years) and any vesting provisions as they may deem appropriate and as are in compliance with TSX-V policy. Any options granted under the Plan are exercisable only while the holder remains an Eligible Person or the time period determined by the Board after ceasing to be an Eligible Person, and are not assignable or transferable other than by will or the laws of descent and distribution.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

9.	SHARE CAPITAL (CONTINUED)

		Granted					Granted
Balance		(Exercised)/			Balance		(Exercised)/			Balance
Dec. 31,		(expired) or			Dec. 31,		(expired) or			Sept. 30,		Exercise
2009		(Cancelled)			2010		(Cancelled)			2011		Price		Term to

	50,000		-			50,000		-			50,000	$	0.80	Sep. 24, 2012
	60,000		-			60,000		-			60,000	$	0.70	Dec. 20, 2012
	150,000		(150,000	)		-		-			-	$	0.65	May 1, 2013
	60,000		-			60,000		-			60,000	$	0.20	Jan. 15, 2014
	-		110,000			110,000		-			110,000	$	0.35	Jan. 29, 2015
	1,955,000		-			1,955,000		-			1,955,000	$	0.40	Apr. 20, 2015
	-		430,000			430,000		-			430,000	$	0.35	Sep. 16, 2015
	1,640,000		-			1,640,000		-			1,640,000	$	0.85	May 2, 2016
	-		-			-		100,000			100,000	$	1.40	Sep. 6, 2016
	1,170,000		-			1,170,000		-			1,170,000	$	0.84	Feb. 23, 2017
	3,555,000		-			3,555,000		(300,000	)		3,255,000	$	0.20	Sep. 4, 2019
	-		-			-		200,000			200,000	$	0.70	Jan 6, 2021
	-		-			-		2,425,000			2,425,000	$	1.50	May 2, 2021

	8,640,000		390,000			9,030,000		2,425,000			11,455,000

As at September 30, 2011, the weighted average remaining contractual life of the options is 6.50 years and the weighted average exercise price is $0.70. At December 31, 2010, the weighted average remaining contractual life of the options was 6.43 years and the weighted average exercise price was $0.46. All options have fully vested as at September 30, 2011.

Stock-Based Compensation - During the three months ended September 30, 2011, the Company granted stock options to a consultant on a total of 100,000 shares at $1.40 per share with a fair value on the grant date of $92,100 that was expensed in the statement of comprehensive loss in the category “Stock-Based Compensation”. The following assumptions were used for the Black-Scholes valuation of the stock options granted during the third quarter of 2011: Expected dividend rate – 0%; Expected stock price volatility – 81%; Risk-free interest rate – 3%; Expected life of options – 5 years. During the three months ended September 30, 2011, an option to acquire 200,000 shares at $0.20 per share was excised for proceeds of $40,000 and stock-based compensation of $29,027 relating to this option was transferred from the stock-based payment reserve to share capital.

During the three months ended June 30, 2011, the Company granted stock options to consultants, employees, directors and officers on a total of 2,425,000 shares at $1.50 per share with a fair value on the grant date of $2,096,150 that was expensed in the statement of comprehensive loss in the category “Stock-Based Compensation”. The following assumptions were used for the Black-Scholes valuation of the stock options granted during the second quarter of 2011: Expected dividend rate – 0%; Expected stock price volatility – 79%; Risk-free interest rate – 3%; Expected life of options – 5 years. During the three months ended June 30, 2011, an option to acquire 100,000 shares at $0.20 per share was excised for proceeds of $20,000 and stock-based compensation of $14,513 relating to this option was transferred from the stock-based payment reserve to share capital.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

9.	SHARE CAPITAL (CONTINUED)

During the three months ended March 31, 2011, the Company granted a stock option to a new director on a total of 200,000 shares at $0.70 per share with a fair value on the grant dates of $86,670 that was expensed in the statement of comprehensive loss in the category “Stock-Based Compensation”. The following assumptions were used for the Black-Scholes valuation of the stock options granted during the first quarter of 2011: Expected dividend rate – 0%; Expected stock price volatility – 78%; Risk-free interest rate – 3%; Expected life of options – 5 years.

10.

RESERVES

Share-based payment reserve

The share-based payment reserve records the fair value of options and warrants recorded in accordance with IFRS 2 "Share-based payments" until such time that the stock options or warrants are exercised at which time the corresponding amount will be transferred to share capital, or the time that the stock options or warrants expire or are cancelled at which time the corresponding amount is transferred to deficit.

Investment revaluation reserve

The investment revaluation reserve records unrealized gains and losses arising on available-for-sale financial assets, except for impairment losses and foreign exchange gains and losses.

11.	RELATED PARTY TRANSACTIONS

Professional fees - Allen D. Leschert, one of our directors, provides legal services to us through Leschert & Company Law Corporation. Leschert & Company charged $9,902 for legal services during the three months ended September 30, 2011 compared to $5,465 for the three months ended September 30, 2010. During the three months ended September 30, 2011, Malcolm Fraser, one of our directors, charged $2,800 for conducting research and consulting for the Company.

Key management personnel compensation – During the three months ended September 30, 2011, employees who are also directors or officers of the Company were paid salaries totaling $126,450, a $36,000 portion of which was capitalized to mineral exploration assets as compared to $105,890, of which $29,990 was capitalized for the three months ended September 30, 2010.

Options Exercised – During the three months ended September 30, 2011, one of our directors exercised a stock option to acquire 200,000 shares at $0.20 per share for proceeds of $40,000 to the Company.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

12.	FINANCIAL RISK MANAGEMENT

Financial Risk Management - The Company is exposed in varying degrees to a variety of financial instrument related risks.

Credit Risk – Credit risk is the risk that one party to a financial instrument will fail to discharge an obligation and cause the other party to incur a financial loss. The Company’s primary exposure to credit risk is on its bank accounts. The Company’s bank accounts are held with a major bank in Canada, a major bank in Chile which is a subsidiary of a major Canadian bank, and a bank in Bolivia. The Company’s cash is held by the major bank in Canada, and specific amounts are transferred to the bank in Chile or Bolivia as and when required to fund the Company’s budgeted exploration activities in these countries. As the majority of the Company’s cash is held by one bank in Canada, there is a concentration of credit risk. This risk is managed by using a major bank that is a high credit quality financial institution as determined by rating agencies. The Company is not exposed to credit risk.

Currency Risk - The Company operates in Canada, Chile and Bolivia and is consequently exposed to foreign exchange risk arising from transactions denominated in foreign currency. The Company’s functional currency is the Canadian dollar, and it has obligations and commitments in other currencies including mainly Chilean Pesos, and to a lesser degree, United States dollars, and Bolivian Bolivianos. Fluctuations in foreign currency exchange rates may affect the Company’s results of operations and the value of the Company’s foreign assets. The Company manages currency risk by closely monitoring relevant exchange rates and when possible, executes currency exchange transactions at times when exchange rates are most advantageous for the Company. The Company does not use hedging to manage its currency risk.

Foreign Exchange risk - The following is an analysis of Canadian dollar equivalent of financial assets and liabilities that are denominated in Chilean pesos (CLP):

	September 30,			December 31,
	2011			2011

Cash	$	119,830		$	97,817
Accounts receivable		1,099			3,100
Accounts payable		(2,209	)		(9,760	)

	$	118,720		$	91,157

Based on the above net exposures as at September 30, 2011, a 10% change in the Chilean peso to Canadian dollar exchange rate would impact the Group’s net loss by $11,872.

Liquidity Risk - Liquidity risk arises through the excess of financial obligations over available financial assets due at any point in time. The Company’s objective in managing liquidity risk is to maintain sufficient readily available reserves in order to meet its liquidity requirements at any point in time. The Company achieves this by maintaining sufficient cash and gold and silver bullion holdings.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

12.	FINANCIAL RISK MANAGEMENT (CONTINUED)

Historically, the Group's sole source of funding has been the issuance of equity securities for cash, primarily through private placements. The Group’s access to financing is always uncertain. There can be no assurance of continued access to significant equity funding.

Commodity Risk - Commodity price risk is the risk that market values and future incomes will fluctuate because of changes in commodity prices. The Company is exposed to significant commodity price risk through its gold and silver bullion holdings.

Interest Rate Risk - Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. The Company is not exposed to significant interest rate risk.

Capital Management - The Company identifies capital as cash and share capital. The Company raises capital through private placement and public share offerings. Capital is managed in a manner consistent with the risk criteria and policies provided by the board of directors and followed by management. All sources of financing are analyzed by management and approved by the board of directors. To maintain or adjust its capital structure, the Company may issue new shares, acquire or dispose of assets or adjust the amount of cash and cash equivalents.

The Company’s primary objectives when managing capital is to safeguard and maintain the Company’s financial resources for continued operations and to fund expenditure programs to further advance mineral interests. The Company is able to scale its expenditure programs and the use of capital to address market conditions by reducing expenditures and the scope of operations during periods of commodity pricing decline and economic downturn. There are no externally imposed capital restrictions.

Classification of financial instruments - Financial assets included in the statement of financial position are as follows:

	September 30,		December 31,
	2011		2011

Cash	$	4,560,474	$	4,870,337
Loans and receivables
Other receivables		45,876		32,551
Available-for-sale financial instruments
Gold and silver bullion		6,948,063		4,107,333

	$	11,554,413	$	9,010,221

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

12.	FINANCIAL RISK MANAGEMENT (CONTINUED)

Financial liabilities included in the statement of financial position are as follows:

	September 30,		December 31,
	2011		2011

Financial liabilities
Trade payables	$	28,499	$	91,890

Fair value - The fair value of the Group’s financial assets and liabilities approximates the carrying amount.

Financial instruments measured at fair value are classified into one of three levels in the fair value hierarchy according to the relative reliability of the inputs used to estimate the fair values. The three levels of the fair value hierarchy are:

·	Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities (cash and gold and silver bullion are Level 1 financial instruments);

·	Level 2 – Inputs other than quoted prices that are observable for the asset or liability either directly or indirectly; and

·	Level 3 – Inputs that are not based on observable market data.

The following is an analysis of the Group’s financial assets measured at fair value as at September 30, 2011 and December 31, 2010:

	As at September 30, 2011
	Level 1		Level 2		Level 3
Cash	$	4,560,474	$	-	$	-
Gold and silver bullion		6,948,063		-		-

	$	11,508,537	$	-	$	-

	As at December 31, 2010
	Level 1			Level 2		Level 3
Cash	$	4,870,337	$	-	$	-
Gold and silver bullion		4,107,333		-		-

	$	8,977,670	$	-	$	-

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

13.	SEGMENTED INFORMATION

Operating segments

The Group operates in a single reportable operating segment – the acquisition and exploration of mineral properties located in South America. The Group has operations and incurs costs associated with assets in different geographic locations.

Geographic segments

The Group’s non-current assets are located in the following countries:

	As at September 30, 2011
	Canada		Chile		Bolivia		Total

Equipment	$	20,192	$	49,978	$	2,611	$	72,781
Mineral exploration assets		-		12,052,876		4,472		12,057,348

	$	20,192	$	12,102,854	$	7,083	$	12,130,129

		As at December 31, 2010
	Canada		Chile		Bolivia		Total

Equipment	$	14,456	$	39,046	$	2,943	$	56,445
Mineral exploration assets		-		10,296,789		3,000		10,299,789

	$	14,456	$	10,335,835	$	5,943	$	10,356,234

14.	TRANSITION TO IFRS

As result of the Accounting Standards Board of Canada’s decision to adopt IFRS for publicly accountable entities for financial reporting periods beginning on or after January 1, 2011, the Group adopted IFRS in its financial statements for the three-months ended March 31, 2011, which were the first interim financial statements prepared using IFRS, and the financial statements for the nine-months ended September 30, 2011 have also been prepared under IFRS. The Group previously applied the available standards under previous Canadian GAAP that were issued by the Accounting Standards Board of Canada.

As required by IFRS 1 “First-time Adoption of International Financial Reporting Standards”, January 1, 2010 has been considered to be the date of transition to IFRS by the Group. Therefore, the comparative figures that were previously reported under previous Canadian GAAP have been restated in accordance with IFRS.

Exemptions applied

The Group has applied the following optional transition exemptions to full retrospective application of IFRS:

·	IFRS 3 “Business Combinations” has not been applied to acquisitions of subsidiaries or of interests in associates and joint ventures that occurred before January 1, 2010.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

14.	TRANSITION TO IFRS (CONTINUED)

IFRS 2 “Share-based Payment” has not been applied to equity instruments that were granted on or before November 7, 2002, or equity instruments that were granted subsequent to November 7, 2002 and vested before the later of the date of transition to IFRS and January 1, 2005. The Group has elected not to apply IFRS 2 to awards that vested prior to January 1, 2010, which have been accounted for in accordance with Canadian GAAP.

IAS 37 “Provisions, Contingent Liabilities and Contingent Assets” has been applied prospectively to all provisions for restoration and environmental obligations that are within the scope of International Financial Reporting Interpretations Committee (“IFRIC”) “Changes in Existing Decommissioning, Restoration and Similar Liabilities”. The Group has:

o	re-measured the liabilities as at January 1, 2010 in accordance with IAS 37;

estimated the amount that would have been included in the cost of the related asset when the liability first arose, by discounting the liability to that date using its best estimate of the historical risk-adjusted discount rates that would have applied for that liability over the intervening period; and

o	calculate the accumulated depreciation on that amount, as at January 1, 2010, on the basis of the current estimate of the useful life of the asset, using the depreciation policy adopted by the entity.

·	The Group has applied the transitional provision in IFRIC 4 “Determining whether an Arrangement contains a Lease” and has assessed all arrangements as at January 1, 2010.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

14.	TRANSITION TO IFRS (CONTINUED)

Reconciliation of assets

	As at December 31, 2010						As at January 1, 2010
	Canadian		Effect of				Canadian		Effect of
	GAAP		Transition		IFRS		GAAP		Transition		IFRS
ASSETS

CURRENT ASSETS

Cash	$	4,870,337	$	-	$	4,870,337	$	1,020,863	$	-	$	1,020,863
Gold and silver bullion		4,107,333		-		4,107,333		757		-		757
Accounts receivable		32,551		-		32,551		39,983		-		39,983
		9,010,221		-		9,010,221		1,061,603		-		1,061,603

NON-CURRENT ASSETS
Equipment		56,445		-		56,445		70,482		-		70,482
Mineral exploration assets		10,299,789		-		10,299,789		9,021,953		-		9,021,953
		10,356,234		-		10,356,234		9,092,435		-		9,092,435

	$	19,366,455	$	-	$	19,366,455	$	10,154,038	$	-	$	10,154,038

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

14.	TRANSITION TO IFRS (CONTINUED)

Reconciliation of liabilities

	As at December 31, 2010									As at January 1, 2010
	Canadian			Effect of						Canadian			Effect of
	GAAP			Transition			IFRS			GAAP			Transition			IFRS
LIABILITIES
CURRENT LIABILITIES
Trade payables and accrued liabilities	$	91,890		$	-		$	91,890		$	73,718		$	-		$	73,718
NON-CURRENT LIABILITIES
Finance lease obligations		-			-			-			-			-			-
Deferred tax liabilities		-			-			-			-			-			-
Provision for restoration and environmental obligations		-			-			-			-			-			-
		-			-			-			-			-			-
		91,890			-			91,890			73,718			-			73,718
SHAREHOLDERS' EQUITY
Share capital		44,702,328			-			44,702,328			34,543,268			-			34,543,268
Contributed surplus		5,094,793			(5,094,793	)		-			4,968,258			(4,968,258	)		-
(Notes 14(b), (c))
Reserves (Notes 14(b), (c)		109,275			3,462,342			3,571,617			463			3,391,552			3,392,015
Deficit (Note 14(b))		(30,631,831	)		1,632,451			(28,999,380	)		(29,431,669	)		1,576,706			(27,854,963	)
		19,274,565			-			19,274,565			10,080,320			-			10,080,320
	$	19,366,455		$	-		$	19,366,455		$	10,154,038		$	-		$	10,154,038

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

14.	TRANSITION TO IFRS (CONTINUED)

Reconciliation of loss and comprehensive loss for the nine-month period ended September 30, 2010

	Canadian			Effect of
	GAAP			Transition			IFRS

Expenses
Amortization	$	26,932		$	-		$	26,932
Consulting fees (Note 14(b))		65,138			(50,005	)		15,133
Foreign exchange		(22,161	)		-			(22,161	)
Interest and bank charges		2,163			-			2,163
Mineral interests administration
and investigation costs		140,301			-			140,301
Office and miscellaneous		80,181			-			80,181
Professional fees		61,022			-			61,022
Regulatory fees		20,827			-			20,827
Salaries and benefits (Note 14(b))		359,889			(76,530	)		283,359
Stock-based compensation (Note 14(b))		-			126,535			126,535
Transfer agent fees		9,566			-			9,566
Travel and promotion		31,831			-			31,831

		775,689			-			775,689

Other items
Impairment of exploration and evaluation asset
Interest income		-			-			-

		-			-			-

Net loss for the period	$	775,689		$	-		$	775,689

Other comprehensive loss (income)
Unrealized gain on short-term investments		(21,852	)		-			(21,852	)
Total comprehensive loss for the period	$	753,837		$	-		$	753,837

Loss per share Basic and diluted	$	(0.01	)	$	-		$	(0.01	)

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

14.	TRANSITION TO IFRS (CONTINUED)

Reconciliation of loss and comprehensive loss for the year ended December 31, 2010


	Canadian			Effect of
	GAAP			Transition			IFRS

Expenses
Amortization	$	38,769		$	-		$	38,769
Consulting fees (Note 14(b))		71,380			(50,005	)		21,375
Foreign exchange (gain)		(10,310	)		-			(10,310	)
Interest and bank charges		5,169			-			5,169
Mineral interests administration
and investigation costs		208,939			-			208,939
Office and miscellaneous		102,474			-			102,474
Professional fees		125,029			-			125,029
Regulatory fees		55,150			-			55,150
Salaries and benefits (Note 14(b))		487,938			(76,530	)		411,408
Stock-based compensation (Note 14(b))		-			126,535			126,535
Transfer agent fees		11,906			-			11,906
Travel and promotion		66,582			-			66,582

		1,163,026			-			1,163,026

Other items
Impairment of exploration and evaluation asset		37,136			-			37,136
Interest income		-			-			-

		37,136			-			37,136

Net loss for the period	$	1,200,162		$	-		$	1,200,162

Other comprehensive loss (income)
Unrealized gain on short-term investments		(108,812	)		-			(108,812	)
Total comprehensive loss for the period	$	1,091,350		$	-		$	1,091,350

Loss per share Basic and diluted	$	(0.01	)	$	-		$	(0.01	)

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

14.	TRANSITION TO IFRS (CONTINUED)

Reconciliation of equity for the nine-month period ended September 30, 2010

	Canadian			Effect of
	GAAP			Transition			IFRS
Shareholders' Equity
Share capital	$	35,841,468		$	-		$	35,841,468
Contributed surplus (Notes 14(b), (c))		5,094,793			(5,094,793	)		-
Reserves (Notes 14(b), (c))		22,315			3,462,342			3,484,657
Deficit (Note 14(b))		(30,207,358	)		1,632,451			(28,574,907	)

Total Shareholders' Equity	$	10,751,218		$	-		$	10,751,218

There were no adjustments required to the statements of cash flows for the nine-month period ended September 30, 2010 and the year ended December 31, 2010 upon the adoption of IFRS by the Company and, therefore, reconciliations of the statements of cash flows for those periods are not presented.

Notes to reconciliations

a.	Functional and presentation currency

The Company has determined that the functional currency of the entities is the Canadian dollar and the presentation currency of the parent Company (the reporting entity) is the Canadian dollar. IFRS requires that functional currency be determined in accordance with primary and secondary indicators in International Accounting Standards 21 “The Effects of Changes in Foreign Exchange Rates”. In determining the functional currency, various factors were considered including the following: the functional currency of the parent company, SAMEX Mining Corp. in Canada is the Canadian dollar; the parent Company operates in Canada and the Canadian dollar is the currency in which funds from financing activities are generated by the parent Company which raises funding for the activities of the Company and its foreign subsidiaries; all activities of the foreign subsidiaries are carried out as an extension of the reporting entity (the parent Company) under the exclusive direction and control of the parent Company; the parent Company provides all the funding for the activities of its foreign subsidiaries which are in the exploration stage and do not have any properties in production and therefore do not generate any revenue from operations to fund their own activities. Based on these factors, we determined that the functional currency of the Group's entities is the Canadian dollar.

Each of the Group’s entities use the currency of the primary economic environment in which that entity operates. The Chilean subsidiary, Minera Samex Chile S.A., uses the Chilean peso for its day to day operations and its financial statements are expressed in Chilean pesos. The subsidiaries in Bolivia use the Bolivian boliviano and the United States dollar and their financial statements are expressed in both bolivianos and United States dollars. At the end of each reporting period, the results and financial position in the financial statements of each of the foreign subsidiaries are translated into the functional currency, the Canadian dollar, and presented in the consolidated financial statements of the parent Company in Canadian dollars.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

14.	TRANSITION TO IFRS (CONTINUED)

Notes to reconciliations (Continued)

a.	Functional and presentation currency (Continued)

Under IFRS, the results and financial position of all the group entities that use a foreign currency different from the presentation currency are translated into the functional currency as follows:

assets and liabilities are translated at the closing exchange rates at the date of the financial period end;

income and expenses are translated at average exchange rates for the period; and

Exchange differences arising on translation of foreign operations are transferred directly to the Group’s foreign currency translation reserve in the statement of comprehensive income and are recognized in the profit or loss in the period in which the operation is disposed.

The Company has determined that no adjustment was required to the balances reported in its Canadian GAAP financial statements upon the transition to IFRS on account of the functional and presentation currencies.

b.	Share-based payments

The Group grants stock options that have a graded vesting schedule. Under Canadian GAAP, the Group accounted for grants of options with graded vesting as a single award and determined the fair value using the average life of the options granted. Stock-based compensation was recognized on a straight-line basis over the total vesting period. Under IFRS, the Group treats each installment as its own award. Therefore, each installment is measured and recognized separately.

On transition to IFRS the Company elected to change its accounting policy for the treatment of share-based payments whereby amounts recorded for expired unexercised stock options are transferred to deficit. Previously, the Company’s Canadian GAAP policy was to leave such amounts in contributed surplus. As a result of this application, the deficit and share-based payment reserve balances as at January 1, 2010 decreased by $1,576,706 and as at September 30, 2010 and December 31, 2010 decreased by $1,632,451.

The Company has reclassified to stock-based compensation the share-based payments previously reported as consulting fees and salaries and benefits for consistency.

SAMEX MINING CORP.

NOTES TO THE CONDENSED CONSOLIDATED INTERIM FINANCIAL STATEMENTS

FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 2011 AND 2010

(EXPRESSED IN CANADIAN DOLLARS - UNAUDITED)

14.	TRANSITION TO IFRS (CONTINUED)

Notes to reconciliations (Continued)

Reserves

Under Canadian GAAP, amounts recorded in relation to the fair value of stock options granted and warrants issued were recorded to contributed surplus. Under IFRS, these amounts have been reclassified as reserves.

d.	Interest income

Under Canadian GAAP, the Group classified interest income as operating activities. Under IFRS, interest income has been reclassified as an investing activity.

Samex Mining (SMXME) Inactive 6-KInterim Condensed Consolidated Financial Statements