Sunshine Oilsands Ltd.

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

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SUNSHINE OILSANDS LTD. 陽光油砂有限公司 *

(a corporation incorporated under the Business Corporations Act of the Province of Alberta, Canada with limited liability)

(HKEx: 2012; TSX: SUO)

Results for Third Quarter 2013

Sunshine Oilsands Ltd. (the “Company” or “Sunshine”) is pleased to announce its results for the three and nine month periods ended September 30, 2013. Please see the attached announcement for further information.

By Order of the Board of Sunshine Oilsands Ltd. Michael John Hibberd Co-Chairman and Songning Shen Co-Chairman

Hong Kong, November 12, 2013

As at the date of this announcement, the Board consists of Mr. Michael John Hibberd and Mr. Songning Shen, as executive directors, Mr. Hok Ming Tseung, Mr. Tingan Liu, Mr. Haotian Li and Mr. Gregory George Turnbull as nonexecutive directors and Mr. Raymond Fong, Mr. Wazir Chand Seth, Mr. Robert John Herdman and Mr. Gerald Franklin Stevenson as independent non-executive directors.

*For identification purposes only

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SUNSHINE OILSANDS LTD. Announcement of results for the three and nine month periods ended September 30, 2013

HONG KONG - ( HKEX: 2012; TSX: SUO ) Sunshine Oilsands Ltd. (“Sunshine” or the “Company”) today announced its financial results for the third quarter of 2013. The Company’s condensed interim consolidated financial statements, notes to the condensed interim consolidated financial statements and Management’s Discussion and Analysis have been filed on SEDAR (www.sedar.com) and with the SEHK at (www.hkexnews.hk) and are available on the Company’s website (www.sunshineoilsands.com). All figures are in Canadian dollars unless otherwise stated.

Highlights

A strategic review process was initiated on August 6, 2013 to look at opportunities for additional funding in the form of debt, equity, JV arrangements or other structures to fund the development of our substantial asset base.
With only about three months remaining to first steam, Sunshine suspended construction of the West Ells project pending the infusion of additional capital. With the construction suspension in effect, the date for Phase 1 first steam will depend on when sufficient funding is obtained and construction restarted.
Our Thickwood 10,000 barrels per day SAGD project received Order in Council approval, a critical step in beginning to realize the potential of the Thickwood area.
Following the end of the quarter, we announced the formation of a joint venture in our Muskwa and Godin areas, with 100% of the initial development funding to be provided by our JV partner, demonstrating the quality of our development potential.

Message to Shareholders

The third quarter of 2013 resulted in substantial changes and fresh challenges for Sunshine, along with new accomplishments and opportunities in some of our asset areas.

The Company had expected to be able to do a term debt financing to advance its initial projects but with market conditions for Canadian oilsands being poor, in August we announced the formation of a special committee of our Board to examine strategic alternatives available to the Company. The special committee has engaged financial advisors who are working with us to determine and progress our best opportunities to fund and develop West Ells and our other extensive opportunities.

Significant progress at West Ells and the expectation of first steam within a few months were unfortunately cut short by the difficult but necessary decision to suspend construction August 18 due to insufficient funding. With the first 5000 bpd pad of 8 well pairs already drilled and completed, drilling was completed on the second 5,000 bpd pad and the wells suspended to await completion activities. The central processing facility and the site generally have been winterized to protect the assets pending funding. With funding in place, a revised Project construction schedule and cost estimate will be executed as quickly as possible to enable commissioning and begin operations, likely within a few months of moving back on site with full construction staff.

Beyond West Ells, we have been pleased with the progress on certain of our other projects. Our second planned project at Thickwood has been approved by the Alberta government through its Order-in-Council issued in September. The Thickwood Project also has the benefit of being approved and supported by the Ft. McKay First Nation up to its maximum expected capacity of 70,000 barrels per day.

During the quarter we negotiated, and following the quarter closed and announced, a Joint Venture arrangement at our Muskwa and Godin properties. Under the terms of the JV, our new partner earns up to a 50% working interest in the properties by spending up to $250 million, or achieving production of 5,000 barrels per day, whichever comes first. The deal excludes the carbonate Oilsands rights, which remain 100% owned by Sunshine, and provides a solid indication of the potential value of our extensive properties.

We appreciate the patience and support of all of our stakeholders, particularly our vendors and suppliers, as we work through these challenging times to begin realizing the value of our large and attractive asset base, starting with our very near term operation at West Ells. We expect the enormous embedded value in our assets will galvanize potential investors and partners into participating with us as we develop that value.

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SUNSHINE OILSANDS LTD.

We also want to thank our staff for their dedication and efforts towards the success of the Company at a difficult time. Regretfully we accepted the resignation of our Senior Vice President of Engineering and Geosciences, Mark Montemurro, and wish him the best of luck; we are searching for a replacement and in the meantime are relying on our depth of professional technical staff to carry on. We thank you for your support and believe we will secure funding to enable the completion of West Ells and then move to develop our other extensive potential.

FORWARD-LOOKING INFORMATION AND DISCLAIMER

This document contains forward-looking information relating to, among other things: (a) the future financial performance and objectives of Sunshine Oilsands Ltd. (“Sunshine” or the “Company”); and (b) the plans and expectations of the Company. Such forward-looking information is subject to various risks, uncertainties and other factors. All statements other than statements and information of historical fact are forward-looking statements. The use of words such as “estimate”, “forecast”, “expect”, “project”, “plan”, “target”, “vision”, “goal”, “outlook”, “may”, “will”, “should”, “believe”, “intend”, “anticipate”, “potential”, and similar expressions are intended to identify forward-looking statements. Forward-looking statements are based on Sunshine’s experience, current beliefs, assumptions, information and perception of historical trends available to Sunshine, and are subject to a variety of risks and uncertainties including, but not limited to those associated with resource definition and expected reserves and contingent and prospective resources estimates, unanticipated costs and expenses, regulatory approval, fluctuating oil and gas prices, expected future production, the ability to access sufficient capital to finance future development and credit risks, changes in Alberta’s regulatory framework, including changes to regulatory approval process and land-use designations, royalty, tax, environmental, greenhouse gas, carbon and other laws or regulations and the impact thereof and the costs associated with compliance. Although Sunshine believes that the expectations represented by such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct. Readers are cautioned that the assumptions and factors discussed in this document are not exhaustive and readers are not to place undue reliance on forward-looking statements as our actual results may differ materially from those expressed or implied. Sunshine disclaims any intention or obligation to update or revise any forward-looking statements as a result of new information, future events or otherwise, subsequent to the date of this document, except as required under applicable securities legislation. The forward-looking statements speak only as of the date of this document and are expressly qualified by these cautionary statements.

Readers are cautioned that the foregoing lists are not exhaustive and are made as at the date hereof. For a full discussion of our material risk factors, see “Risk Factors” in our most recent Annual Information Form, “Risk Management” in our current MD&A for the three and nine months ended September 30, 2013 and risk factors described in other documents we file from time to time with securities regulatory authorities, all of which are available on the Hong Kong Stock Exchange at www.hkexnews.hk, on the SEDAR website at www.sedar.com or our website at www.sunshineoilsands.com.

About Sunshine Oilsands Ltd.

The Company is engaged in the evaluation and the development of oil properties for the future production of bitumen in the Athabasca oil sands region in Alberta, Canada. Sunshine trades on the HKEX under the symbol “2012” and on the TSX under the symbol “SUO”.

For further enquiries, please contact:

Mr. John Zahary, President and CEO

Mr. David Sealock, Executive VP, Corporate Operations Telephone: (403) 984-1446

Email: [email protected] and Website: www.sunshineoilsands.com

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SUNSHINE OILSANDS LTD.

Management's Discussion and Analysis

This Management's Discussion and Analysis ("MD&A") of the financial condition and performance of Sunshine Oilsands Ltd. (" Sunshine " or the "Company") for the three and nine month periods ended September 30, 2013 is dated November 12, 2013. This MD&A should be read in conjunction with the Company's unaudited condensed interim consolidated financial statements and notes thereto for the period ended September 30, 2013 and with the audited consolidated financial statements and notes thereto for the year ended December 31, 2012. All amounts and tabular amounts are stated in thousands of Canadian dollars unless indicated otherwise.

Forward‐Looking Information

Certain statements in this MD&A are forward-looking statements that are, by their nature, subject to significant risks and uncertainties and the Company hereby cautions investors about important factors that could cause the Company’s actual results to differ materially from those projected in a forward-looking statement. Any statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions or future events or performance (often, but not always, through the use of words or phrases such as “will”, “expect”, “anticipate”, “estimate”, “believe”, “going forward”, “ought to”, “may”, “seek”, “should”, “intend”, “plan”, “projection”, “could”, “vision”, “goals”, “objective”, “target”, “schedules” and “outlook”) are not historical facts, are forward-looking and may involve estimates and assumptions and are subject to risks (including the risk factors detailed in this MD&A), uncertainties and other factors some of which are beyond the Company’s control and which are difficult to predict. Accordingly, these factors could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements.

Since actual results or outcomes could differ materially from those expressed in any forward-looking statements, the Company strongly cautions investors against placing undue reliance on any such forward-looking statements. Statements relating to “reserves” or “resources” are deemed to be forward-looking statements, as they involve the implied assessment, based on estimates and assumptions that the resources and reserves described can be profitably produced in the future. Further, any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events.

All forward-looking statements in this MD&A are expressly qualified by reference to this cautionary statement.

Overview

Sunshine is a major holder and developer of oil sands resources with approximately 70 billion barrels of total Petroleum Initially In Place (“PIIP”) where total PIIP is a sum of discovered and undiscovered PIIP components. With approximately 5.1 billion barrels of best estimate contingent resources and 446 million barrels of proved plus probable (“2P”) reserves, the Company has significant commercial development potential.

The Athabasca region is the most prolific oil sands region in the Province of Alberta, Canada. Canada’s oil sands represent the largest oil resource found in a stable political environment located in the western hemisphere and the third largest oil resource in the world, with 169 billion barrels of recoverable resource. The Canadian oil sands contain the largest single source of supply of oil imported into the United States.

The Company is focused on evaluating and developing these assets with the first project being an initial 10,000 barrels per day plant located at West Ells. Phase 1 of West Ells is designed for 5,000 barrels per day while Phase 2 will add an additional 5,000 barrels per day. Substantial engineering, procurement and construction activity occurred for West Ells during 2012 and the first half of 2013; however, due to lack of sufficient funding to complete the Project, these activities were suspended in August 2013 pending additional financing. Sunshine is maintaining staff at site to continue with reduced work activities and to ensure safety of the worksite. The effect of the work slow down on West Ells’ schedules and costs will be outlined after the funding is committed.

The Thickwood and Legend projects are planned for 10,000 barrels per day initially each. The regulatory approval for Thickwood was received in the third quarter of 2013 while Legend approval is expected in 2014.

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SUNSHINE OILSANDS LTD.

On August 6, 2013, the Corporation announced the Board of Directors has directed management of the Corporation to commence a strategic review process to identify, examine and consider a range of strategic alternatives available to Sunshine, in order to progress its oil sands development strategy and to preserve and maximize shareholder value. This process could result in one or more strategic transactions being completed by the Corporation including: debt or equity financing of the Corporation, or a joint venture or other strategic transaction involving Sunshine, or its assets, and a third party. There can be no assurance any of these alternatives will be completed.

On August 18, 2013, the Company announced that it entered into a Framework Agreement with an international third party to pursue a joint venture involving its Muskwa and Godin area oil sands leases. The Framework Agreement provides for a 50 – 50 joint venture pursuant to which the third party will be responsible for investing 100% of the initial joint operations conducted up to a maximum $250 million, and contribute a thermal enhanced recovery technology, to achieve production of 5,000 barrels per day from the oil sands leases. After this production threshold is achieved, the joint venture parties will contribute in proportion to their ownership positions. The joint venture is subject to certain conditions and the entering into of binding agreements. On October 21, 2013, the Company announced it had signed the joint operating agreement for the joint venture.

As at September 30, 2013 the Company had invested approximately $1.0 billion in oil sands leases, drilling operations, project engineering, procurement and construction, regulatory application processing and other assets. As at September 30, 2013, the Company had $34.2 million in cash and cash equivalents (high yield savings). The Company had no debt drawn on a credit facility of up to $200 million, the availability of which was subject to the Company meeting certain tests and which could only be drawn once other sources of funding are substantially used up. Following the end of the quarter, the Company cancelled the credit facility at its maturity.

The Company relies on its ability to obtain various forms of financing to fund administration expenses and future exploration and development of its projects. The ability of the Company to continue as a going concern and to realize the carrying value of its assets and discharge its liabilities when due is dependent on the successful completion of one or more financings or monetizing assets. There is no certainty that these and other financing activities will be successful.

Operational Update

West Ells

As at the date of this MD&A, while significant progress had been achieved on Sunshine’s first SAGD project at West Ells, construction remains suspended. Sunshine has the following status update:

Phase 1 - drilling and completion of eight well pairs;
Phase 2 - drilling of eight well pairs;
Phase 1 facility is 81% complete, with 4 months to finish after full construction is resumed;
Phase 2 facility is 22% complete, with 4 months to finish after Phase 1 is commissioned;
Operations camp completed, commissioning and startup and operation group rotating to site full-time;
Operations staff engaged in preservation and winterization of assets.

Sunshine now expects capital cost for the West Ells Project Phase 1 and 2 to be higher than previous estimates due to the incremental costs associated with suspending and then restarting engineering, procurement and construction activities. The date for first steam will be revised once additional funding allows construction restart and developing a new schedule.

Thickwood and Legend

Once sufficient additional funding is in place, Sunshine will complete fieldwork for additional environmental analysis to support plans and regulatory applications for significant commercial expansions in both areas.

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SUNSHINE OILSANDS LTD.

Alberta Government Initiatives

On August 22, 2012, the Government of Alberta approved the Lower Athabasca Regional Plan (“LARP”) to set aside land for conservation, tourism and recreation. The implementation of, and compliance with the terms of, the LARP may adversely impact Sunshine’s current properties in northern Alberta, as we expect specific oil sands leases to be cancelled by the government.

The Company continues to have ongoing discussions with the Government of Alberta for compensation of certain developmental expenditures incurred.

Non‐IFRS Financial Measures

This MD&A includes references to financial measures commonly used in the oil and natural gas industry, such as cash flow from operations. These financial measures are not defined by IFRS as issued by the International Accounting Standards Board and therefore are referred to as non‐IFRS measures. The non‐IFRS measures used by the Company may not be comparable to similar measures presented by other companies. The Company uses these non‐IFRS measures to help evaluate its performance. Management uses cash flow from operations to measure the Company's ability to generate funds to finance capital expenditures and repay debt.

These non‐IFRS measures should not be considered as an alternative to or more meaningful than net income or net cash provided by operating activities, as determined in accordance with IFRS. The data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance ‐ prepared in accordance with IFRS. The non IFRS measure of cash flow from operations can be reconciled to net cash provided by operating activities, as determined in accordance with IFRS.

Operational and Financial Highlights

The following table summarizes selected financial information of the Company for the periods presented:

		For the three	months	ended		For the nine	months	ended
		September 30,				September 30,
Financial Highlights		2013		2012		2013		2012
Other income	$	118	$	1,142	$	1,559	$	11,196
Expensed portion of IPO costs		-		-		-		16,258
Finance costs		1,475		214		4,032		17,378
Net loss		8,681		15,531		25,265		52,534
Basic and diluted loss per share		0.00		0.01		0.00		0.02
Payments for capital investments		53,324		32,510		240,554		165,023

For the three and nine months ended September 30, 2013, the Company had a net loss of $8.7 million and $25.3 million compared to $15.5 million and $52.5 million in 2012, respectively. The net loss in the three and nine month periods ended September 30, 2013 was primarily attributable to general administration costs of $4.9 million and $12.1 million, $2.4 million and $7.2 million for share-based payment expense and finance costs of $1.5 million and $4.0 million, respectively. For the three and nine months ended September 30, 2012, the net loss was due primarily to finance costs of $0.2 million and $17.4 million, $Nil and $16.3 million of expensed IPO costs, general administration costs of $10.4 million and $19.2 million, and $5.9 million and $10.7 million for share-based payment expense.

		September 30, 2013		December 31, 2012
Cash and cash equivalents	$	34,187	$	282,231
Working capital (deficiency)/surplus		(117,827)		215,471
Total assets		1,050,288		979,726
Total liabilities		185,046		108,650

At September 30, 2013, the Company had a combined cash and cash equivalents balance of $34.2 million compared to $282.2 million at December 31, 2012. The change of $248.0 million in the cash and cash equivalents balance for the first nine months of 2013 can be attributed to investment in development for $239.2 million, primarily at

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SUNSHINE OILSANDS LTD.

Sunshine’s West Ells project area, and $15.3 million used in corporate operating activities offset by net cash provided from financing activities of $6.2 million. At September 30, 2013, the Company’s working capital deficiency was $117.8 million.

The following table summarizes the Company’s cash flow used in operations:

	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Net loss Finance costs Expense portion of IPO costs Unrealized foreign exchange loss/(gain) Interest income Depreciation Share-based payment expense Employee share savings plan Cash flow used in operations	$ (8,681) $ (15,531) $ (25,265) $ (52,534) 1,475 214 4,032 17,378 - - - 10,863 42 583 (150) (51) (160) (1,224) (1,409) (2,242) 119 73 330 199 2,357 5,946 7,223 10,680 174 - 226 -
	$ (4,674) $ (9,939) $ (15,013) $ (15,707)

This non-IFRS measurement is intended to provide additional information and should not be considered in isolation or as substitute for measures of performances prepared in accordance with IFRS. The above table reconciles the nonIFRS measurements “Cash flow used in operations” from “Net loss for the period”, the nearest IFRS measure. Cash flow used in operations is defined as net loss as reported, addback or deduct non-cash items including expensed portion of IPO costs, finance costs, share-based payments, unrealized portion of foreign exchange adjustments, depreciation and interest income.

Cash flow used in operations in the three and nine months ended September 30, 2013 totaled $4.7 million and $15.0 million compared to $9.9 million and $15.7 million for the same periods in 2012. The decrease of $5.2 million for the third quarter of 2013 is primarily due to decrease in net loss of $6.8 million, an increase in finance costs of $1.3 million offset by a decrease in interest income of $1.1 million. For the nine months ended September 30, 2013, the decrease in cash flow used in operations was $0.7 million due to savings in finance costs of $13.4 million and $10.9 million of expensed IPO costs, offset by $27.2 million for the change in net loss and a reduction in interest income $0.8 million for the same period in 2012. Given the nature of its business and stage of development, cash flow used in operations is a small portion of the Company’s total cash needs and expenditures.

Summary of Quarterly Results

The following table summarizes selected unaudited financial information for the Company for the eight preceding quarters:

(‘000s except for per share	Q3 2013	Q2 2013	Q1 2013	Q4 2012	Q3 2012	Q2 2012	Q1 2012	Q4 2011
amounts)
Other income	118	622	818	1,033	1,142	2,992	7,061	257
Expense portion of IPO
costs	-	-	-	-	-	44	16,213	1,852
Fair value adjustment on
warrants	-	-	-	-	-	-	-	(11,791)
Finance costs	1,475	816	1,741	2,859	214	66	17,098	7,029
Net loss for the period	8,681	8,327	8,257	9,193	15,531	4,673	32,331	2,473
Loss per share	0.00	0.00	0.00	0.00	0.00	0.00	0.02	0.01
Capital investments	53,324	101,336	85,892	65,098	32,510	90,035	42,477	31,770

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SUNSHINE OILSANDS LTD.

Results of Operations

Finance Expense

Results of Operations Finance Expense
	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Finance cost on share repurchase obligation Expensed portion of share issue costs Finance cost on related party loan Finance cost on credit facility Financing related costs Unwinding of discounts on provisions Less: amounts capitalized in exploration and evaluation assets	$ - $ - $ - $ 5,864 - - - 13,012 - - - 266 505 - 1,541 - 871 - 1,471 - 99 214 1,020 351 - - - (2,115)
	$ 1,475 $ 214 $ 4,032 $ 17,378

For the three month period ended September 30, 2013, finance expense increased by $1.3 million primarily for $0.5 million of standby costs on the Credit Facility and other financing related costs of $0.8 million. Finance expense for the nine month period ended September 30, 2013 decreased by $13.3 million to $4.0 million from $17.4 million for the same period in 2012, primarily due to $13.0 million for share issue costs expensed in the prior period, the extinguishment of the share repurchase obligation for $5.9 million offset by $3.0 million for expenditures on and related to credit facilities and $0.7 million for accretion on provisions.

In October 2012, the Company signed a credit facility agreement (the “Credit Facility”) with a group of financial institutions with an amount available of up to $200 million, subject to meeting certain tests. The Credit Facility is unavailable and undrawn at September 30, 2013 due to an agreement amendment to defer reporting of certain financial covenants until September 30, 2013. For the quarter ended September 30, 2013, the Company incurred $0.5 million for standby fees. The amount available for draw under the facility depends on the value attributed to the Company’s Proved reserves by its independent engineers, while drawdown is subject to, among other things, demonstrating sufficient funding (including draws under the Credit Facility) to complete the West Ells project to a defined stage. Following the end of the quarter, Sunshine cancelled the Credit Facility coincident with its maturity date.

In the second quarter of 2012, the Company drew and repaid $30.0 million under a previously available $100.0 million credit facility agreement (the “Loan Agreement”) with a significant shareholder of the Company. Since the loan was classified as a financial liability and accounted for as other liabilities at amortized cost, the Company recorded non-cash finance costs of $0.3 million. Refer to Section: “Transactions with related parties ” for terms and conditions of the Loan Agreement.

General and Administrative Costs

	For the three months ended September 30, 2013 2012
	Total Capitalized Expensed Total Capitalized Expensed
Salaries, consulting and benefits Rent Other	5,201 2,261 2,940 10,575 2,054 8,521 555 281 274 538 304 234 1,218 75 1,143 1,655 290 1,365
	6,974 2,617 4,357 12,768 2,648 10,120

	For the nine months ended September 30, 2013 2012
	Total Capitalized Expensed Total Capitalized Expensed
Salaries, consulting and benefits Rent Other	17,051 6,964 10,087 20,465 6,076 14,389 1,642 920 722 1,578 845 733 3,924 413 3,511 4,232 761 3,471
	22,617 8,297 14,320 26,275 7,682 18,593

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SUNSHINE OILSANDS LTD.

General and administrative cost, which includes salaries, consulting and benefits, rent, and other general administrative costs, for the three month period ended September 30, 2013 decreased by $5.8 million to $4.4 million compared to $10.1 million for the same period in 2012. For the nine months ended September 30, 2013, general and administrative expense decreased by $4.3 million to $14.3 million compared to $18.6 million for the same period in 2012, respectively. The decrease in expense is primarily attributed to higher bonus payments that were made in 2012 offset against higher compensation costs in 2013 as the Company continued to hire staff for its ongoing development. During the three and nine months ended September 30, 2013, the Company capitalized salaries, consulting and benefits, rent and other general administrative costs related to capital investment of $2.6 million and $8.3 million compared to $2.6 million and $7.7 million for the same periods in 2012, respectively.

Share-based payments

Share-basedpayments
		For the three months		ended September 30,
			2013			2012
	Total	Capitalized		Total	Capitalized
	amount	portion	Expensed	amount	portion	Expensed
Share-basedpayments expense	3,215	858	2,357	8,695	2,749	5,946
		For	the nine months	ended September	30,
			2013			2012
	Total	Capitalized		Total	Capitalized
	amount	portion	Expensed	amount	portion	Expensed
Share-basedpayments expense	10,586	3,363	7,223	16,170	5,490	10,680

Share-based compensation expense for the three and nine months ended September 30, 2013 was $2.4 million and $7.2 million compared to $5.9 million and $10.7 million for the same period in 2012, respectively. The fair value of share-based payments associated with the granting of stock options and preferred shares is recognized by the ‐ Company in its consolidated financial statements. Fair value is determined using the Black Scholes option pricing model.

‐ The Company capitalizes a portion of the share based compensation expense using the same methodology associated with capitalizing salaries and benefits. For the three and nine months ended September 30, 2013 and 2012, the Company capitalized $0.9 million and $3.4 million, respectively, compared to $2.7 million and $5.5 million of share‐based payments in the comparable prior periods.

Other Income

Other Income
	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Foreign exchange gain – realized Foreign exchange gain/(loss) - unrealized Interest income from term deposits	- 501 - 9,005 (42) (583) 150 (51) 160 1,224 1,409 2,242
	118 1,142 1,559 11,196

Other income for the three months ended September 30, 2013 decreased by $1.0 million to $0.1 million from $1.1 million in 2012 and for the nine months ended September 30, 2013 decreased by $9.6 million to $1.6 million from $11.2 million in the first nine months of 2012, respectively. The change is primarily due to a net realized foreign exchange gains of $0.1 million for the third quarter of 2012 and realized foreign exchange gain of $9.0 million for the first nine months of 2012. For the decrease related to interest income of $1.1 million in the third quarter of 2013, interest income declined as cash balances were invested in capital projects.

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Expensed portion of IPO costs

In the first quarter of 2012, the Company completed a public listing and initial public offering (“IPO”) on the HKEX. The IPO raised approximately $570.0 million (HK$4.5 billion) gross proceeds for the Company. In conjunction with this financing, $Nil million was recognized in the three months ended September 30, 2013 while $16.3 million of the IPO costs were expensed in the nine months ended September 30, 2012. Of this amount, $5.3 million was for bonus payments and $11.0 million for IPO related costs such as legal and audit fees.

Depreciation

Depreciation expense was $0.1 million for the three month period ended September 30, 2013 compared to $0.07 million for the same period in 2012. For the nine month period ended September 30, 2013, depreciation expense was $0.3 million compared to $0.2 million for the same period in 2012. Since the Company is a development stage company, its crude oil assets are not yet ready for use and therefore, not subject to depletion and depreciation.

Income Taxes

The Company did not recognize any deferred income taxes, which relate primarily to unrecognized tax losses, for the three and nine months ended September 30, 2013 and 2012. Recognition of tax losses is based on the Company’s consideration of its internal development plan for its asset base and the assumption as to whether or not these tax losses will be utilized before their expiry dates. At September 30, 2013, the Company had total available tax deductions of approximately $1.1 billion, with unrecognized tax losses starting to expire in 2027.

Liquidity and Capital Resources

Liquidity and Capital Resources
	September 30, 2013 December 31, 2012
Working capital deficiency/(surplus) Shareholders’ equity	$ 117,827 $ (215,471) 865,242 871,076
	$ 983,069 $ 655,605

Working capital deficiency of $117.8 million is comprised of $34.2 million of cash and cash equivalents, offset by a non cash working capital deficiency of $152.0 million. The Company’s strategy is to access sufficient capital, through equity issuances, joint ventures, asset sales and the utilization of debt, in order to maintain a strong capital base for the objectives of maintaining financial flexibility and to sustain the future development of the business. The Company manages its capital structure in order to continue as a going concern and makes adjustments relative to changes in economic conditions and the Company’s risk profile. In order to manage risk, the Company may from time to time issue shares and adjust its capital spending to manage current working capital levels. The Company’s liquidity may be adversely affected if the Company’s access to the capital markets is hindered, whether as a result of financial market conditions generally or as a result of conditions specific to the Company. The ability of the Company to continue as a going concern and to realize the carrying value of its assets and discharge its liabilities when due is dependent on the successful completion of one or more financings or monetizing assets. There is no certainty that these and other financing activities will be successful.

For the three and nine month periods ended September 30, 2013, the Company reported net loss of $8.7 million and $25.3 million, respectively. The Company’s negative working capital position has deepened by $82.4 million since the second quarter of 2013. At September 30, 2013, the Company had negative working capital of $117.8 million and an accumulated deficit of $193.4 million. The Company’s recent losses and negative cash flow have resulted in a material uncertainty that may cast significant doubt upon the Company’s ability to continue as a going concern. On August 6, 2013, the Company announced the Board of Directors has directed management of the Company to commence a strategic review process to identify, examine and consider a range of strategic alternatives available to Sunshine, with a view to progressing its oil sands development strategy and to preserving and maximizing shareholder value. This process could result in one or more strategic transactions being completed by the Company including: debt or equity financing of the Company, a joint venture or other strategic transaction involving Sunshine, or its assets, and a third party. There can be no assurance any of these alternatives will be completed. Effective August 18, 2013, the Company suspended construction of its West Ells SAGD project, pending sourcing of additional financing.

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SUNSHINE OILSANDS LTD.

In October 2012, the Company signed a Credit Facility of up to $200 million with a syndicate of financial institutions. The Credit Facility matures on October 10, 2013 and is extendable at the lenders’ discretion. Undrawn amounts are subject to a standby fee of 100 basis points per annum. The Credit Facility is secured by all assets of the Company. The amount available for draw under the facility depended on the value attributed to the Company’s Proved reserves by its independent engineers, while drawdown was subject to, among other things, demonstrating sufficient funding (including draws under the Credit Facility) to complete the West Ells project to a defined stage. As at September 30, 2013, $Nil was available for draw under the Credit Facility. Subsequent to period end, the Credit Facility was cancelled by the Company at maturity.

The Company is exposed to risks arising from fluctuations in foreign currency exchange rates and the volatility of those rates. This exposure primarily relates to certain expenditure commitments, deposits, accounts receivable and accounts payable which are denominated in US dollars and/or HK dollars. The Company manages this risk by monitoring foreign exchange rates and evaluating their effects on using Canadian or U.S. vendors as well as timing of transactions. Thus, exchange rate fluctuations can affect the fair value of future cash flows.

At September 30, 2013, the Company held approximately HK$1.0 million, or $0.1 million using the September 30, 2013 exchange rate of 7.5405, as cash in the Company’s Hong Kong bank account. If exchange rates to convert from HK dollars to Canadian dollars had been one percent higher or lower with all other variables held constant, the Canadian equivalent of HK dollars held at September 30, 2013 would have been impacted by approximately $1,300.

At September 30, 2013, the Company held approximately USD$ 2.2 million, or $2.3 million using the September 30, 2013 exchange rate of 1.029, as cash in the Company’s US bank account. If exchange rates to convert from US dollar to Canadian dollars had been one percent higher or lower with all other variables held constant, the Canadian equivalent of US dollars held at September 30, 2013 would have been impacted by approximately $23,000.

The Company's $34.2 million in cash and cash equivalents as at September 30, 2013 are held in accounts with third party financial institutions and consist of invested cash and cash in the Company's operating accounts. The cash equivalents portion is invested in high yield savings. To date, the Company has experienced no loss or lack of access to its cash in operating accounts, invested cash or cash equivalents. However, the Company can provide no assurance that access to its invested cash and cash equivalents will not be affected by adverse conditions in the financial markets. While the Company monitors the cash balances in its operating and investment accounts and adjusts the cash balances as appropriate, these cash balances could be affected if the underlying financial institutions or corporations fail or are subject to other adverse conditions in the financial markets.

Cash Flows Summary

Cash Flows Summary
	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Cash used in operating activities $ Cash used in investing activities Cash generated/(used in) by financing activities Effect of exchange rate changes on cash and cash equivalents held in foreign currency (Decrease)/increase in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period $	(6,259) $ (18,543) $ (15,246) $ (15,010) (53,164) (31,286) (239,145) (162,781) (677) (13,491) 6,197 448,428 (42) (583) 150 51
	(60,142) (63,903) (248,044) 270,688 94,329 419,548 282,231 84,957
	34,187 $ 355,645 $ 34,187 $ 355,645

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SUNSHINE OILSANDS LTD.

Operating Activities

Net cash used for operating activities for the three and nine months ended September 30, 2013 was $6.3 million and $15.2 million compared to cash used of $18.5 million and $15.0 million in 2012, a change of $12.2 million and $0.2 million, respectively. Net cash used for operating activities includes movements in working capital of ($1.6) million and ($0.2) million for the three and nine months ended September 30, 2013 compared to ($8.6) million and $0.7 million for the same periods in 2012.

Investing Activities

Net cash used for investing activities for the three and nine months ended September 30, 2013 grew by $21.9 million to $53.2 million compared to $31.3 million in the third quarter of 2012, and grew by $76.3 million to $239.1 million from $162.8 million for the nine month period in 2012. The increase was due to higher investment primarily in the West Ells development, by $53.3 million and $240.6 million, offset by $0.2 million and $1.4 million of interest income for the three and nine months ended September 30, 2013 compared to $32.5 million and $165.0 million invested and $1.2 million and $2.2 million earned in the same period in 2012, respectively.

Capital investment for the development program in the third quarter of 2013 focused on SAGD wellpair drilling and completion, engineering, construction, procurement of major equipment and related capital costs for Phase 1 and 2 of the West Ells project, and maintaining the West Ells access road.

Financing Activities

Financing activities for the three and nine months ended September 30, 2013 used $0.7 million and generated $6.2 million, which consisted of proceeds received from stock option exercises of $0.2 million and $8.6 million, offset by $0.8 million and $2.4 million of finance related costs. For the nine months ended September 30, 2012, financing activities consisted of gross proceeds received in connection with Sunshine’s IPO on the HKEX for $574.3 million, offset by $68.9 million used to repurchase all warrants issued and outstanding, $31.7 million for common share repurchases and $25.4 million of share issue costs and an IPO advisory fee. For the three months ended September 30, 2012, financing activities included the $16.9 million for common share repurchases and $Nil of share issue costs, offset by $3.4 million of proceeds received from stock option exercises.

Contractual obligations and commitments

The information presented in the table below reflects management's estimate of the contractual maturities of the Company's obligations. These estimated maturities may differ significantly from the actual maturities of these obligations. As at September 30, 2013, the Company’s estimated commitments are as follows:

Drilling, other equipment and contracts Lease rentals Office leases1	Due within the next 12 months Due in the next 2 to 5 years Over 5 years $ 38,409 - - 1,840 7,225 10,593 2,155 8,494 2,278
	$ 42,404 15,719 12,871

Office leases only includes minimum lease commitments up to October 31, 2014 for the Hong Kong premises lease.

Shares Outstanding

As at November 12, 2013, the Company had the following shares issued and outstanding:

Class “A” common shares	2,885,459,208
Class “G” preferred shares	52,390,000
Class “H”preferred shares	22,200,000

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SUNSHINE OILSANDS LTD.

Transactions with related parties

Balances and transactions between the Company and its subsidiary, which are related parties, have been eliminated on consolidation. The Company had related party transactions with the following companies related by way of directors or shareholders in common:

Orient International Resources Group Limited and its affiliated companies (“Orient Group”) is a private group of companies controlled by Mr. Hok Ming Tseung, a significant shareholder and director of the Company. At September 30, 2013, Orient Group owned approximately 10% of the outstanding shares of the Company. In 2010 through to 2012, Orient Group provided a credit facility agreement to the Company and provided advisory services with respect to various IPO related matters and other strategic topics.
MJH Services Ltd. (”MJH Services”) is a private company wholly owned by one of Sunshine’s Co-Chairmen of the Board of Directors. MJH Services provides overall operational services to the Company.
1226591 Alberta Inc. (“1226591 Inc.”) is a private company wholly owned by one of Sunshine’s CoChairmen of the Board of Directors. 1226591 Inc. provides overall operational services to the Company.
McCarthy Tetrault LLP is a law firm in which a director of the Company is a partner. McCarthy’s provides legal counsel to the Company.

Details of transactions between the Company and its related parties are disclosed below.

Credit Facility Agreement (the “Credit Facility Agreement”)

In prior periods the Company had a Credit Facility Agreement with a non-arm’s length lender in which a credit facility for general working capital purposes was available of up to a maximum of $100 million. At September 30, 2012, the Company had no amount drawn on the credit facility. The loan was a financial liability and was classified as other liabilities and recorded at amortized cost, using the effective interest method. For the three and nine months ended September 30, 2012, total finance costs were $Nil and $0.3 million, respectively, of which $Nil and $ 0.1 million was expensed and $Nil and $0.2 million was capitalized as the funds are directly attributable to the development of the Company’s qualifying assets. Upon repayment of the outstanding balance owing on this credit facility, $0.3 million was recorded to Other Reserve due to the related party nature of this transaction. In the fourth quarter of 2012, this Credit Facility Agreement was terminated.

Employee Share Purchase Loan

The Company loaned $50,000 to a senior employee to facilitate the exercise of stock options to purchase 250,000 Class “A” common shares. The loan bears interest at 3.0% per annum, secured by the common shares and matures December 15, 2013.

The Company incurred consulting and director’s fees and share-based compensation payments to MJH Services totaling $0.7 million and $1.8 million for the three and nine months ended September 30, 2013 compared to $6.1 million and $6.8 million or the same period in 2012, respectively. The Company incurred consulting and director’s fees and share-based compensation payments to 1226591 Inc. totaling $0.7 million and $1.8 million for the three and nine months ended September 30, 2013 compared to $6.1 million and $6.8 million for the same period in 2012.

The Company classified its legal costs with McCarthy Tetrault LLP as follows:

	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Share issue costs Legal expense Finance fees Capitalized legal fees Expensed portion of IPO costs	- - - 271
	- - - 271 524 42 640 128 70 - 235 - 165 - 165 - - - 551
	759 42 1,040 679

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SUNSHINE OILSANDS LTD.

The following balances were outstanding and included in trade and other payables for McCarthy Tetrault LLP at the end of the reporting period:

end of the reporting period:
	September	30,	2013	December	31,	2012
Legal			745			136

The amounts outstanding are unsecured and will be settled in cash. No guarantees have been given or received.

Off-balance sheet arrangements

‐ At September 30, 2013, the Company did not have any off balance sheet arrangements.

Subsequent event

On October 20, 2013 the Company signed a joint venture (“JV”) arrangement for the Muskwa and Godin properties. Under the terms of the JV, the new partner acquired a 50% working interest in the properties in return for spending up to $250 million, or achieving production of 5,000 barrels per day, whichever comes first. If neither of the spending or production targets are met by three years after project regulatory approval, but in any event no later than October 20, 2019, the new partner’s working interest is reduced in proportion to the higher of the percentage of the spending and the production target amounts achieved. The deal excludes the carbonate oil sands rights, which remain 100% owned by the Company.

Recent accounting pronouncements issued but not yet adopted

The International Accounting Standard Board (the "IASB") issued a number of new and revised International Accounting Standards ("IASs"), International Financial Reporting Standards ("IFRSs"), amendments and related Interpretations ("IFRICs") (hereinafter collectively referred to as the "New IFRSs") which are effective for the Company's financial period beginning on January 1, 2013. The Company has reviewed new and revised accounting pronouncements that have been issued. The impact of these standards are disclosed in Note 3, “New Accounting Pronouncements and Changes in Accounting Policies” in the consolidated financial statements.

Critical accounting judgments and key sources of estimation uncertainty

In the application of the Company’s accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision affects both current and future periods.

The following are the critical judgments, apart from those involving estimations, that management has made in the process of applying the Company’s accounting policies and that have the most significant effect on the amounts recognised in the consolidated financial statements.

Oil and gas reserves

The process of estimating quantities of reserves is inherently uncertain and complex. It requires significant judgments and decisions based on available geological, geophysical, engineering and economic data. These estimates may change substantially as additional data from ongoing development activities and production performance becomes available and as economic conditions impacting oil and gas prices and costs change. Reserve estimates are based on, among other things, current production forecasts, prices, cost estimations and economic conditions.

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SUNSHINE OILSANDS LTD.

Reserve estimates are critical to many accounting estimates including:

determining whether or not an exploratory well has found economically recoverable reserves. Such determinations involve the commitment of additional capital to develop the field based on current estimates of production forecasts, prices and other economic conditions;
calculating unit-of-production depletion rates. Proved plus probable reserves are used to determine rates that are applied to each unit-of-production in calculating depletion expense; and
assessing development and production assets for impairment. Estimated future net cash flows used to assess impairment of the Company’s development and production assets are determined using proved and probable reserves.

Independent qualified reserves evaluators prepare reserve estimates for each property at least annually and issue a report thereon. The reserve estimates are reviewed by the Company’s engineers and operational management familiar with the property.

Bitumen Reserves

The estimation of reserves involves the exercise of judgment. Forecasts are based on engineering data, estimated future prices, expected future rates of production and the timing of future capital expenditures, all of which are subject to many uncertainties and interpretations. The Company expects that over time its reserves estimates will be revised either upward or downward based on updated information such as the results of future drilling, testing and production. Reserve estimates can have a significant impact on net earnings, as they are a key component in the calculation of depletion and depreciation and for determining potential asset impairment. For example, a revision to the proved reserves estimates would result in a higher or lower depletion and depreciation charge to net earnings. Downward revisions to reserve estimates may also result in an impairment of oil sands property, plant and equipment carrying amounts.

Exploration and Evaluation costs (“E&E”) are capitalized as exploration and evaluation assets and are assessed for impairment when circumstances suggest that the carrying amount may exceed recoverable value. This assessment involves judgment as to: (i) the likely future commerciality of the asset and when such commerciality should be determined; (ii) future revenues based on forecasted oil and gas prices; (iii) future development costs and production expenses; (iv) the discount rate to be applied to such revenues and costs for the purpose of deriving a recoverable value, and (v) potential value to future E&E activities of any geological and geophysical data acquired.

Decommissioning costs

A provision is required to be recognised for the future retirement obligations associated with the Company’s property and equipment and its exploration and evaluation assets. The decommissioning provision is based on estimated costs, taking into account the anticipated method and extent of restoration consistent with legal, regulatory and constructive requirements, technological advances and the possible use of the site. Since these estimates are specific to the sites involved, there are many individual assumptions underlying the amount provided. These individual assumptions can be subject to change based on actual experience and a change in one or more of these assumptions could result in a materially different amount.

Share repurchase obligation

The Company had a share repurchase obligation in the first quarter of 2012 pursuant to the accounting treatment required under IAS 32. In order to calculate a value for the share repurchase obligation, the effective interest method was applied which is based on estimates and assumptions to determine the effective interest rate.

Share-based payments

The Company recognises compensation expense on options, preferred shares and stock appreciation rights (“SARs”), if granted. Compensation expense is based on the estimated fair value of each option, preferred share and stock appreciation right at its grant date, the estimation of which requires management to make assumptions about future volatility of the Company’s stock price, future interest rates and the timing with respect to exercise of the options. The effects of a change in one or more of these variables could result in a materially different fair value.

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Deferred income taxes

The calculation of deferred income taxes is based on a number of assumptions, including estimating the future periods in which temporary differences, tax losses and other tax credits will reverse. Tax interpretations, regulations, and legislation in the various jurisdictions in which the Company and its subsidiary operate are subject to change.

Risk Factors

The business of resource exploration, development and extraction involves a high degree of risk. Material risks and uncertainties affecting the Company, their potential impact and the Company’s principal risk management strategies are substantially unchanged from those disclosed in the Company’s MD&A for the year ended December 31, 2012, which is available at www.sedar.com. The 2012 annual report of the Company is available at the Company’s website, www.sunshineoilsands.com, and the website of the HKEX, www.hkexnews.hk. The Company’s 2012 Annual Information Form is available at www.sedar.com.

Disclosure Controls and Procedures

The Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO") have designed, or caused to be designed under their supervision, disclosure controls and procedures to provide reasonable assurance that: (i) material information relating to the Company is made known to the Company's CEO and CFO by others, particularly during the period in which the annual filings are being prepared; and (ii) information required to be disclosed by the Company in its annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed, summarized and reported within the time period specified in securities legislation.

Internal Controls Over Financial Reporting

The CEO and CFO have designed, or caused to be designed under their supervision, internal controls over financial reporting to provide reasonable assurance regarding the reliability of the Company's financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Such officers have evaluated, or caused to be evaluated under their supervision, the effectiveness of the Company's internal controls over financial reporting at the financial year end of the company and concluded that the Company's internal controls over financial reporting are effective at the financial year end of the company for the foregoing purpose.

No material changes in the Company's internal controls over financial reporting were identified during the three and nine months ended September 30, 2013 that have materially affected, or are reasonably likely to materially affect, the Company's internal controls over financial reporting. It should be noted that a control system, including the Company's disclosure and internal controls and procedures, no matter how well conceived, can provide only reasonable, but not absolute, assurance that the objectives of the control system will be met and it should not be expected that the disclosure and internal controls and procedures will prevent all errors or fraud. In reaching a reasonable level of assurance, management necessarily is required to apply its judgment in evaluating the cost/benefit relationship of possible controls and procedures.

Additional Stock Exchange Information

Additional information required by the HKEX and not shown elsewhere in this announcement is as follows:

Code of Corporate Governance Practice (the “Code”)

The Company is committed to maintaining high standards of corporate governance. The Company recognizes that corporate governance practices are fundamental to the effective and transparent operation of a company and its ability to protect the rights of its shareholders and enhance shareholder value.

The Company confirms that the Code was complied with following its public listing, save that the Company has not entered into formal letters of appointment with its directors and therefore will deviate from Code Provision D.1.4 of the Code. The Company will deviate from Code Provision D.1.4 of the Code since each of the Directors will be appointed on an annual basis at each annual general meeting, which is consistent with market practice in Canada.

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Compliance with the Model Code for Securities Transactions by Directors of Listed Companies (the “Model Code”)

The Company confirms that it has adopted the Model Code following its public listing. Having made specific enquiry of all directors, the directors have compiled with the required standard set out in the Model Code and its code of conduct regarding directors’ securities transactions.

Purchase, sale or redemption of Sunshine’s listed securities

Class “A” Common Shares

During the three and nine months ended September 30, 2013, the Company issued Nil common shares and 46,695,000 common shares for $Nil million and $8.4 million upon exercise of pre-IPO stock options, respectively. In connection with this issuance, $Nil million and $3.3 million were transferred from share option reserve to Class “A” common shares.

Class “G” Preferred Shares

During the three and nine months ended September 30, 2013, 100,000 and 7,800,000 Class “G” Preferred Shares were converted to 62,000 and 4,740,000 Class “A” common shares for $3,900. There were Nil and 250,000 Class “G” Preferred Shares cancelled during the three and nine months ended September 30, 2013, respectively.

Class “H” Preferred Shares

For the three and nine months ended September 30, 2013, no Class “H” preferred shares were converted to Class “A” common shares.

Pre-IPO Stock Option Plan

The Company no longer grants stock options under the Pre-IPO Plan. During the three and nine months ended September 30, 2013, there were Nil and 46,695,000 Pre-IPO stock options exercised at a weighted average exercise price of $Nil and $0.18 per stock option. There were also 279,627 and 5,440,914 forfeitures of Pre-IPO stock options during the three and nine months ended September 30, 2013.

Post-IPO Stock Option Plan

For the three and nine months ended September 30, 2013, the Company granted 6,850,368 Post-IPO stock options. During the three and nine months ended September 30, 2013, there were Nil Post-IPO stock options exercised. There were also 2,031,800 and 7,317,505 forfeitures of Post-IPO stock options during the three and nine months ended September 30, 2013.

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Summary of Financial Statements and Notes

The Board of Directors of the Company announces the results of the Company and its wholly owned subsidiary, for the three and nine months ended September 30, 2013 together with comparative figures for the corresponding periods in 2012 as follows:

Consolidated Statements of Financial Position

Consolidated Statements of Financial Position
	September 30, 2013 December 31, 2012
Assets Current assets Cash and cash equivalents Trade and other receivables Prepaids and deposits Non-current assets Exploration and evaluation Property, plant and equipment Liabilities and Shareholders’ Equity Current liabilities Trade and other payables Provisions for decommissioning obligations Non-current liabilities Provisions for decommissioning obligations Net current (liabilities)/assets Total assets less current liabilities Shareholders’ Equity Share capital Reserve for share-based compensation Deficit	$ 34,187 $ 282,231 2,261 2,155 998 701
	37,446 285,087
	381,126 366,668 631,716 327,971
	1,012,842 694,639
	$ 1,050,288 $ 979,726
	$ 154,170 $ 68,821 1,103 795
	155,273 69,616
	29,773 39,034
	185,046 108,650
	(117,827) 215,471
	895,015 910,110
	1,003,894 991,798 54,730 47,395 (193,382) (168,117)
	865,242 871,076
	$ 1,050,288 $ 979,726

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Consolidated Statements of Operations and Comprehensive Loss

	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Other income Foreign exchange gain/(loss) Interest income Expenses Salaries, consulting and benefits Rent Legal and audit Depreciation Share-based payments Expensed portion of IPO costs Finance costs Other Loss before income taxes Income taxes Net loss and comprehensive loss for the period attributable to equity holders of the Company Basic and diluted loss per share	$ (42) $ (82) $ 150 $ 8,954 160 1,224 1,409 2,242
	118 1,142 1,559 11,196
	2,940 8,521 10,087 14,389 274 234 722 733 491 320 919 622 119 73 330 199 2,357 5,946 7,223 10,680 - - - 16,258 1,475 214 4,032 17,378 1,143 1,365 3,511 3,471
	8,799 16,673 26,824 63,730
	8,681 15,531 25,265 52,534 - - - -
	8,681 15,531 25,265 52,534
	$ 0.00 $ 0.01 $ 0.00 $ 0.02

Notes

1. Basis of preparation

These consolidated financial statements are prepared in accordance with International Financial Reporting Standards (“IFRSs”) as issued by the International Accounting Board. The condensed consolidated financial statements also comply with the disclosure requirements of the Hong Kong Companies Ordinance and the applicable disclosure provisions of the Rules Governing the Listing of Securities on the HKEX.

The consolidated financial statements have been prepared on the historical cost basis except for certain financial instruments, measured at fair value.

The consolidated financial statements are presented in Canadian Dollars (“$”), which is the functional currency of the Company.

The consolidated financial statements incorporate the financial statements of the Company and the Company’s wholly owned subsidiary, Sunshine Oilsands (Hong Kong) Ltd. (“Sunshine Hong Kong”). Control is achieved when the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiaries are included in the consolidated financial statements when control is achieved and until control is lost. All inter-company transactions, balances, revenues and expenses are eliminated in full on consolidation.

2. Segment Information

The Company has one business and geographical segment. Accordingly, no business and geographical segment information is presented.

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3. Trade Receivables

The Company’s trade and accruals and other receivables mainly arise from oil sales and goods and services tax receivables due from government taxation authorities. These are summarized as follows:

	September 30, 2013 December 31, 2012
Trade Accruals and other Goods and Services Taxes receivable	$ 311 $ 297 354 387 1,596 1,471
	$ 2,261 $ 2,155
The Company allows an average credit period of 30 days to its trade customers. The following is an aged analysis of trade receivables at the end of the reporting periods:
	September 30, 2013 December 31, 2012
0 - 30 days 31 - 60 days 61 - 90 days	$ 213 $ 46 3 250 95 1
	$ 311 $ 297

As at September 30, 2013, included in the Company’s trade receivables were debtors with an aggregate carrying amount of $98 (December 31, 2012 - $251), which was past due as at the reporting date and for which the Company had not provided for impairment loss. The Company does not hold any collateral over these balances.

4. Trade Payables

Trade payables and accrued liabilities mainly represent payables to subcontractors for development, engineering, procurement and construction services. While the Company has financial risk management policies in place to ensure that payables are generally paid within pre-agreed credit terms, the recent funding shortfalls which caused the Company to suspend construction at its West Ells project also caused it to suspend payments to essentially all of its vendors. Several vendors have filed liens against the Company’s lands at West Ells and these liens will need to be cleared up once additional funding is achieved to allow the Company to restart construction. The following is an aged analysis of trade payables based on dates of invoices at the end of the reporting periods:

	September 30, 2013 December 31, 2012
Trade 0 - 30 days 31 - 60 days 61 - 90 days > 91 days Accrued liabilities	$ 20,483 1,170 27,503 3,378 23,533 1,005 18,976 1,262
	90,495 6,815 63,675 62,006
	$ 154,170 68,821

5. Dividends

The Company has not declared or paid any dividends in respect of the three and nine months ended September 30, 2013 (December 31, 2012 - $Nil).

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6. Income Taxes

September 30, 2013	Opening Balance Recogn- ised in loss Recognis- ed in other comprehen -sive loss Recognis- ed directly in equity Reclassifi- ed from equity to loss Acquisition/ Disposals Other Closing Balance
Temporary differences Exploration and evaluation Property and equipment Other financial liabilities Share issue expenses Tax losses Deferred tax assets (liabilities)	$ $ $ $ $ $ $ $ (56,087) (31,596) - - - - (7,201) (94,884) 129 265 - - - - - 394 9,961 (255) - - - - 7,201 16.907 22,059 15,514 - - - - - 37,573
	(23,938) (16,072) - - - - - (40,010)
	23,938 16,072 - - - - - 40,010
	- - - - - - - -

September 30, 2012	Opening Balance Recogn- ised in loss Recognis- ed in other comprehen -sive loss Recognis- ed directly in equity Reclassifi- ed from equity to loss Acquisition/ Disposals Other Closing Balance
Temporary differences Exploration and evaluation Property and equipment Other financial liabilities Share issue expenses Tax losses Deferred tax assets (liabilities)	(32,593) (8,303) - - - - (7,223) (48,119) (32) (55) - - - - - (87) 755 (88) - - - - 7,223 7,890 872 (4,058) - - - - - (3,186)
	(30,998) (12,504) - - - - - (43,502)
	30,998 12,504 - - - - - 43,502
	- - - - - - - -

The Company is subject to Canadian federal and provincial tax for the estimated assessable profit at a rate of 25.0%. The Company had no assessable profit in Canada for the three and nine months ended September 30, 2013. The Company files all required income tax returns and believes that it is in full compliance with the provisions, tax interpretations, regulations and legislation of the Income Tax Act (Canada) and all applicable provincial tax legislation. However, such returns are subject to reassessment by the applicable taxation authorities. In the event of a successful reassessment, such reassessment may have an impact on current and future taxes payable. The estimated tax deductions available to the Company in Canada are approximately $1.1 billion. The Company’s tax losses will begin expiring in 2027.

The Company’s subsidiary, Sunshine Hong Kong, is subject to Hong Kong profits tax at a rate of 16.5%. No Hong Kong profits tax was provided for as the Company had no assessable profit arising in or derived from Hong Kong for the three and nine months ended September 30, 2013.

Review of interim results

The unaudited condensed interim consolidated financial statements for the Company for the three and nine months ended September 30, 2013, were reviewed by the Audit Committee of the Company and the Company’s external auditor.

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Publication of information

This second quarter results announcement is published on the websites of SEDAR (www.sedar.com), the HKEX (www.hkexnews.hk) and the Company's website at www.sunshineoilsands.com.

This announcement is prepared in both English and Chinese and in the event of inconsistency, the English text of this announcement shall prevail over the Chinese text.

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SUNSHINE OILSANDS LTD.

Consolidated Statements of Financial Position

(Expressed in thousands of Canadian dollars) (Unaudited)

Notes	September 30, 2013 December 31, 2012
Assets Current assets Cash and cash equivalents 4 Trade and other receivables 5 Prepaids and deposits 6 Non-current assets Exploration and evaluation 7 Property, plant and equipment 8 Liabilities and Shareholders’ Equity Current liabilities Trade and other payables 9 Provisions for decommissioning obligations 10 Non-current liabilities Provisions for decommissioning obligations 10 Going Concern 2 Shareholders’ Equity Share capital 12 Reserve for share-based compensation Deficit	$ 34,187 $ 282,231 2,261 2,155 998 701
	37,446 285,087
	381,126 366,668 631,716 327,971
	1,012,842 694,639
	$ 1,050,288 $ 979,726
	$ 154,170 $ 68,821 1,103 795
	155,273 69,616 29,773 39,034
	185,046 108,650
	1,003,894 991,798 54,730 47,395 (193,382) (168,117)
	865,242 871,076
	$ 1,050,288 $ 979,726

See accompanying notes to the condensed interim consolidated financial statements.

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Consolidated Statements of Operations and Comprehensive Loss

(Expressed in thousands of Canadian dollars, except for per share amounts) (Unaudited)

Notes	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Other income Foreign exchange (losses)/gains Interest income Expenses Salaries, consulting and benefits Rent Legal and audit Depreciation 8 Share-based payments 13.3 Expensed portion of IPO costs Finance costs 15 Other Loss before income taxes Income taxes 11 Net loss and comprehensive loss for the period attributable to equity holders of the Company Basic and diluted loss per share 16	$ (42) $ (82) $ 150 $ 8,954 160 1,224 1,409 2,242
	118 1,142 1,559 11,196
	2,940 8,521 10,087 14,389 274 234 722 733 491 320 919 622 119 73 330 199 2,357 5,946 7,223 10,680 - - - 16,258 1,475 214 4,032 17,378 1,143 1,365 3,511 3,471
	8,799 16,673 26,824 63,730
	8,681 15,531 25,265 52,534 - - - -
	$ 8,681 $ 15,531 $ 25,265 $ 52,534
	0.00 0.01 0.00 0.02

See accompanying notes to the condensed interim consolidated financial statements.

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Consolidated Statements of Changes in Shareholders’ Equity (Expressed in thousands of Canadian dollars) (Unaudited)

Notes	Reserve for share based compensation Share capital Deficit Total
Balance, December 31, 2012 Net loss and comprehensive loss for the period Employee share savings plan Recognition of share-based payments 13.3 Issue of shares upon exercise of share options 12.1 Reserve transferred on exercise of share options Balance, September 30, 2013 Balance, December 31, 2011 Net loss and comprehensive loss for the period Recognition of share-based payments 13.3 Issue of common shares Reclassification of share repurchase obligation Repurchase of common shares Issue of common shares for services 18.1 Issue of shares under employee share option plan Reserve transferred on exercise of share options Repurchase and cancellation of warrants Recognition of credit on credit facility 18.1 Share issue costs, net of deferred tax ($Nil) Balance, September 30, 2012	$ 47,395 $ 991,798 $ (168,117) $ 871,076 - - (25,265) (25,265) - 455 - 455 10,586 - - 10,586 - 8,390 - 8,390 (3,251) 3,251 - -
	$ 54,730 $ 1,003,894 $ (193,382) $ 865,242
	$ 30,074 $ 219,174 $ (100,662) $ 148,586 - - (52,534) (52,534) 16,170 - - 16,170 - 569,880 - 569,880 - 247,957 - 247,957 - (31,662) - (31,662) - 8,378 - 8,378 - 4,442 - 4,442 (1,745) 1,745 - - - - (5,995) (5,995) - - 266 266 - (25,836) - (25,836)
	$ 44,499 $ 994,078 $ (158,925) $ 879,652

See accompanying notes to the condensed interim consolidated financial statements.

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Consolidated Statements of Cash Flows

(Expressed in thousands of Canadian dollars) (Unaudited)

Notes	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Cash flows from operating activities Net loss Finance costs Expense portion of IPO costs Unrealized foreign exchange losses/(gains) Interest income Depreciation Share-based payment expense Employee share savings plan Movement in non-cash working capital 21 Net cash used in operating activities Cash flows from investing activities Interest received Payments for capital investments 21 Net cash used in investing activities Cash flows from financing activities Proceeds from issue of common shares 12.1 Payment for repurchase of common shares Payment for share issue costs 21 Payment for finance costs 21 Payment for advisory fee 18.1 Payment for warrant settlement Net cash provided in financing activities Effect of exchange rate changes on cash and cash equivalents held in foreign currency Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents, beginning of period Cash and cash equivalents, end of period	$ (8,681) $ (15,531) $ (25,265) $ (52,534) 1,475 214 4,032 17,378 - - - 10,863 42 583 (150) (51) (160) (1,224) (1,409) (2,242) 119 73 330 199 2,357 5,946 7,223 10,680 174 - 226 - (1,585) (8,604) (233) 697
	(6,259) (18,543) (15,246) (15,010)
	160 1,224 1,409 2,242 (53,324) (32,510) (240,554) (165,023)
	(53,164) (31,286) (239,145) (162,781)
	167 3,428 8,618 574,322 - (16,919) - (31,662) - - - (24,928) (844) - (2,421) - - - - (441) - - - (68,863)
	(677) (13,491) 6,197 448,428
	(42) (583) 150 51
	(60,142) (63,903) (248,044) 270,688 94,329 419,548 282,231 84,957
	$ 34,187 $ 355,645 $ 34,187 $ 355,645

See accompanying notes to the condensed interim consolidated financial statements.

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Notes to the Condensed Interim Consolidated Financial Statements

For the three and nine month periods ended September 30, 2013 (Expressed in thousands of Canadian dollars, unless otherwise indicated) (Unaudited)

1. Corporation Information

Sunshine Oilsands Ltd. (the “Company”) was incorporated under the laws of the Province of Alberta on February 22, 2007. The address of its principal place of business is 1020, 903 - 8 Avenue S.W., Calgary, Alberta, T2P 0P7, Canada. The Company’s shares were listed on the Stock Exchange of Hong Kong Limited (“SEHK”) on March 1, 2012 pursuant to an initial public offering (“IPO”) and trades under the stock code symbol of “2012”. On January 26, 2012, shareholders of the Company authorized the Company to complete up to a 25:1 share split. The Board of Directors of the Company concluded that a 20:1 share split was appropriate, increasing the number of common shares, preferred shares and stock options to 20 times their previous outstanding amounts. All share and stock option information is therefore presented on a post split basis. On November 16, 2012, the Company completed a listing of its common shares on the Toronto Stock Exchange (“TSX”) and trades under the symbol of “SUO”.

On May 4, 2012, Sunshine Oilsands (Hong Kong) Limited (“Sunshine Hong Kong”) was incorporated in Hong Kong under the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) and is a wholly-owned subsidiary of the Company. The address of the principal place of business for Sunshine Hong Kong is Unit 8504A, 85/F, International Commerce Centre 1 Austin Road West, Kowloon.

On August 6, 2013, the Company announced the Board of Directors has directed management of the Company to commence a strategic review process to identify, examine and consider a range of strategic alternatives available to Sunshine, with a view to progressing its oilsands development strategy and to preserving and maximizing shareholder value. This process could result in one or more strategic transactions being completed by the Company including: debt or equity financing of the Company, a joint venture or other strategic transaction involving Sunshine, or its assets, and a third party. There can be no assurance any of these alternatives will be completed.

2. Basis of Preparation

Going Concern

These condensed interim consolidated financial statements have been prepared on a going concern basis. The going concern basis of presentation assumes that the Company will continue in operation for the foreseeable future and will be able to realize its assets and discharge its liabilities and commitments in the normal course of business. For the three and nine month periods ended September 30, 2013, the Company reported net loss of $8.7 million and $25.3 million, respectively. The Company’s negative working capital position has deepened by $ 82.4 million since the second quarter of 2013. At September 30, 2013, the Company had negative working capital of $117.8 million and an accumulated deficit of $193.4 million. The Company’s recent losses and negative cash flow have resulted in a material uncertainty that may cast significant doubt upon the Company’s ability to continue as a going concern without additional financing. Effective August 18, 2013, the Company suspended construction of its West Ells SAGD project, pending sourcing of additional financing.

The condensed interim consolidated financial statements do not reflect adjustments that would be necessary if the going concern basis was not appropriate. The appropriateness of the going concern basis is dependent upon, among other things: the ability to obtain debt or equity financing, a joint venture or a sale of assets in order to have sufficient funding to meet its obligations that enables the Company to continue as a going concern, the ability to generate sufficient cash from operations and future profitable operations. There can be no assurance the Company will be able to continue as a going concern.

Basis of Preparation

The condensed interim consolidated financial information included in this report has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’. The results for the interim periods are unaudited and in the opinion of management include all adjustments necessary for a fair presentation of the results for the periods presented. All such adjustments are of a normal recurring nature. This report should be read in conjunction with the audited consolidated financial statements and related notes for the year ended December 31, 2012.

3. New Accounting Pronouncements and Changes in Accounting Policies

The IASB issued a number of new and revised International Accounting Standards ("IASs"), International Financial Reporting Standards ("IFRSs"), amendments and related Interpretations ("IFRICs") (hereinafter collectively referred

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to as the "New IFRSs") which are effective for the Company's financial period beginning on January 1, 2013. The Company has reviewed new IFRSs and the impact of these standards is noted below.

IFRS 10, Consolidated Financial Statements

IFRS 10 replaces portions of IAS 27 Consolidated and Separate Financial Statements and interpretation SIC-12 Consolidation - Special Purpose Entities. The new standard requires consolidated financial statements to include all controlled entities under a single control model. On January 1, 2013, the Company determined that the adoption of IFRS 10 did not result in any change in the consolidation status of its wholly owned subsidiaries.

IFRS 11, Joint Arrangements

IFRS 11 applies to accounting for interests in joint arrangements where there is joint control. The standard requires the joint arrangements to be classified as either joint operations or joint ventures. The structure of the joint arrangement would no longer be the most significant factor when classifying the joint arrangement as either a joint operation or a joint venture. In addition, the option to account for joint ventures (previously called jointly controlled entities) using proportionate consolidation will be removed and replaced by equity accounting. On January 1, 2013, the Company determined that the adoption of IFRS 11 did not have any impact on any of its joint arrangements.

IFRS 12, Disclosure of Interests in Other Entities

IFRS 12 includes disclosure requirements about subsidiaries, joint ventures and associates, as well as unconsolidated structured entities and replaces existing disclosure requirements. Due to this new section, the Company will be required to disclose the following: judgments and assumptions made when deciding how to classify involvement with another entity, interests that non-controlling interests have in consolidated entities and the nature of the risks associated with interests in other entities. On January 1, 2013, the Company concluded that the adoption of IFRS 12 did not result in any changes in its disclosure of interests in other entities.

IFRS 13, Fair Value Measurement

IFRS 13 will converge the IFRS requirements for how to measure fair value and the related disclosures. IFRS 13 establishes a single source of guidance for fair value measurements, when fair value is required or permitted by IFRS. Upon adoption, the Company will provide a single framework for measuring fair value while requiring enhanced disclosures when fair value is applied. In addition, fair value will be defined as the “exit price” and concepts of “highest and best use” and “valuation premise” would be relevant only for non-financial assets and liabilities. On January 1, 2013, the Company adopted IFRS 13 on a prospective basis and the adoption of this standard did not have any impact on the Company’s consolidated financial statements.

IFRS 9, Financial Instruments

IFRS 9 was issued by the IASB in November 2009 and October 2010 and replaces IAS 39 Financial Instruments: Recognition and Measurement. 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 required to be applied for annual periods beginning on or after January 1, 2015.

4. Cash and cash equivalents

4. Cash and cash equivalents
	September 30, 2013 December 31, 2012
Cash Term deposits	$ 34,187 $ 13,966 - 268,265
	$ 34,187 $ 282,231
5. Trade and other receivables
	September 30, 2013 December 31, 2012
Trade Accruals and other receivables Goods and Services Taxes receivable	$ 311 $ 297 354 387 1,596 1,471
	$ 2,261 $ 2,155

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6. Prepaid expenses and deposits

6. Prepaid expenses and deposits
	September 30, 2013	December 31, 2012
Prepaids Deposits	$ 519 479	$ 276 425
	$ 998	$ 701
7. Exploration and evaluation assets
		September 30, 2013
Balance, December 31, 2011 Capital expenditures Non-cash expenditures1 Transferred to PPE Balance, December 31, 2012 Capital expenditures Non-cash expenditures1 Transferred to PPE Balance, September 30, 2013		$ 382,277 269,348 41,845 (326,802)
		$ 366,668 16,688 (2,230) -
		$ 381,126

Non-cash expenditures include capitalized share-based payments/(recovery), financing costs and decommissioning obligations (Note 10).

The Company is a development stage entity and, as a result, no depletion expense has been recorded for exploration and evaluation assets for any period. During the three and nine months ended September 30, 2013, the Company capitalized directly attributable costs/(recovery) including $Nil and $(0.1) million for share-based payment expense (three and nine months September 30, 2012 - $2.7 million and $5.5 million), $0.2 million and $0.6 million of preproduction operating loss/(income) (three and nine months September 30, 2012 $0.2 million and $1.3 million), $Nil of finance costs (three and nine months September 30, 2012 - $Nil and $2.1 million) and $Nil and $0.4 million of general and administrative costs (three and nine months September 30, 2012 - $2.6 million and $7.7 million), respectively.

Exploration and evaluation costs are comprised of the following:

	September 30, 2013 December 31, 2012
Intangibles Tangibles Land and lease costs	$ 271,469 $ 258,664 19,553 17,200 90,104 90,804
	$ 381,126 $ 366,668

8. Property and equipment

8. Property and equipment
	Crude oil assets Corporate assets Total
Cost Balance, December 31, 2011 Capital expenditures Non-cash expenditures1 Transferred to PPE Balance, December 31, 2012 Capital expenditures Non-cash expenditures1 Transferred to PPE Balance, September 30, 2013	$ - $ 1,208 $ 1,208 - 740 740 - - - 326,802 - 326,802
	$ 326,802 $ 1,948 $ 328,750 307,514 1,011 308,525 (4,450) - (4,450) - - -
	$ 629,866 $ 2,959 $ 632,825

Non-cash expenditures include capitalized share-based payments/(recovery) and decommissioning obligations (Note 10).

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	Crude oil assets Corporate assets Total
Accumulated depreciation Balance, December 31, 2011 Depreciation expense Balance, December 31, 2012 Depreciation expense Balance, September 30, 2013 Carrying value, September 30, 2013 Carrying value, December 31, 2012	$ - $ 489 $ 489 - 290 290
	$ - $ 779 $ 779 - 330 330
	$ - $ 1,109 $ 1,109
	$ 629,866 $ 1,850 $ 631,716
	$ 326,802 $ 1,169 $ 327,971

At September 30, 2013, the crude oil assets included in the above property and equipment were not subject to depletion since they are not ready for use in the manner intended by management.

During the three and nine months ended September 30, 2013, the Company capitalized directly attributable costs including $2.6 million and $7.9 million for general and administrative costs (three and nine months September 30, 2012 - $Nil for both periods), and $0.9 million and $3.5 million for share-based payment expense (three and nine months September 30, 2012 - $Nil for both periods).

During the three and nine months ended September 30, 2013, the Company capitalized $2.9 million for the costs to repair a damaged gas turbine, which costs are being claimed under insurance. The Company did not record a receivable for the insurance claim. If the claim of $2.7 million is paid, it will be recorded in the period in which it is received.

9. Trade and other payables

9. Trade and otherpayables
	September 30, 2013 December 31, 2012
Trade Accrued liabilities	$ 90,495 $ 6,815 63,675 62,006
	$ 154,170 $ 68,821

Trade and accrued liabilities represent liabilities for goods and services provided to the Company prior to the end of September 30, 2013. The Company’s exposure to liquidity risk related to trade and accrued liabilities is disclosed in Note 17.8.

10. Provisions for decommissioning obligations

At September 30, 2013, the Company’s share of the estimated total undiscounted cash flows required to settle asset decommissioning obligations was $50.5 million (December 31, 2012 - $73.4 million). Expenditures to settle asset decommissioning obligations are estimated to be incurred up to 2112. Decommissioning costs are based on estimated costs to reclaim and abandon crude oil properties and the estimated timing of the costs to be incurred in future years, discounted using an annual risk-free rate between 1.21% to 3.00% per annum and inflated using an inflation rate of 2.0% per annum.

	September 30, 2013 December 31, 2012
Balance, beginning of period Additional provision recognized Effect of changes in discount rate Unwinding of discount rate and effect Current portion Balance, end ofperiod	$ 39,829 $ 6,400 4,436 32,346 (14,409) 322 1,020 761
	$ 30,876 $ 39,829 (1,103) (795)
	$ 29,773 $ 39,034

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11. Income taxes

11.1 Income taxes recognized in the Statement of Operations

	For the three months ended September 30, For the nine months ended September 30,
	2013 2012 2013 2012
Income taxes comprises: Tax recovery in respect of the current period Effect of changes in tax rates and laws Total income taxes	- - - - - - - -
	- - - -

11.2 Deferred tax balances

11.2 Deferred tax	balances
September 30, 2013	Opening Balance Recogn- ised in loss Recognis- ed in other comprehen -sive loss Recognis- ed directly in equity Reclassifi- ed from equity to loss Acquisition/ Disposals Other Closing Balance
Temporary differences Exploration and evaluation Property and equipment Other financial liabilities Share issue expenses Tax losses Deferred tax assets (liabilities)	$ $ $ $ $ $ $ $ (56,087) (31,596) - - - - (7,201) (94,884) 129 265 - - - - - 394 9,961 (255) - - - - 7,201 16,907 22,059 15,514 - - - - - 37,573
	(23,938) (16,072) - - - - - (40,010)
	23,938 16,072 - - - - - 40,010
	- - - - - - - -

September 30, 2012	Opening Balance Recogn- ised in loss Recognis- ed in other comprehen -sive loss Recognis- ed directly in equity Reclassifi- ed from equity to loss Acquisition/ Disposals Other Closing Balance
Temporary differences Exploration and evaluation Property and equipment Other financial liabilities Share issue expenses Tax losses Deferred tax assets (liabilities)	$ $ $ $ $ $ $ $ (32,593) (8,303) - - - - (7,223) (48,119) (32) (55) - - - - - (87) 755 (88) - - - - 7,223 7,890 872 (4,058) - - - - - (3,186)
	(30,998) (12,504) - - - - - (43,502)
	30,998 12,504 - - - - - 43,502
	- - - - - - - -

The Company has not recognized any deferred tax asset for the periods presented.

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12. Share capital

The Company’s authorized share capital is as follows:

an unlimited number of Class “A” and Class “B” voting common shares without par value; and
an unlimited number of Class “C”, Class “D”, Class “E” and Class “F” non-voting common shares without par value; and
an unlimited number of Class “G” and Class “H” non-voting preferred shares.

Issued Capital

Issued Capital
	September 30, 2013 December 31, 2012
Common shares Class “G” preferred shares Class “H” preferred shares	$ 1,003,858 $ 991,758 25 29 11 11
	$ 1,003,894 $ 991,798

12.1 Common shares

12.1 Common shares
	Nine months ended September 30, 2013 Year ended December 31, 2012
	Number of shares $ Number of shares $
Balance, beginning of period Issued for cash Issued for service Reclassification of share repurchase obligation Repurchase of common shares Repurchase of purchase warrants Conversion of preferred shares exercised Issue of shares under share option plan Reserve transferred on exercise of stock options Issue of shares under employee share saving plan Share issue costs Balance, end ofperiod	2,831,713,161 991,758 1,470,171,240 216,761 - - 923,299,500 569,880 - - 13,566,395 8,378 - - 433,884,300 247,957 - - (85,091,500) (38,731) - - - 2,371 4,740,000 4 1,450,800 2 46,695,000 8,390 74,432,426 8,052 - 3,251 - 3,124 1,900,706 455 - - - - - (26,036)
	2,855,048,867 1,003,858 2,831,713,161 991,758

12.2 Class “G” preferred shares

The Company’s Board of Directors authorized for issuance a maximum of 65,000,000 Class “G” preferred shares. The Class “G” preferred shares were issued at $0.0005 per Class “G” preferred share and are convertible into Class “A” common shares at the option of the holder at any time in accordance with the conversion schedule outlined below.

	September 30, 2013	September 30, 2013		December 31, 2012
	Number of shares $	Weighted average price $	Number of shares	$ Weighted average price $
Balance, beginning of period Issued Converted Cancelled Balance, end of period Convertible, end ofperiod	60,440,000 29 - - (7,800,000) (4) (250,000) -	0.33 - 0.33 -	63,310,000 830,000 (3,700,000) -	31 0.33 - 0.48 (2) 0.39 - -
	52,390,000 25	0.33	60,440,000	29 0.33
	40,864,200 20	0.33	27,802,400	14 0.33

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The fair value of the Class “G” preferred shares issued in 2012 was estimated to be $0.48 per Class “G” preferred share, using the Black Scholes pricing model with the following assumptions:

	December 31, 2012
Weighted average expected volatility (%)	75%
Risk-free rate of return (%)	1%
Expected life (years)	1.89 – 1.99
Expected forfeitures	Nil
Dividends	Nil

12.3 Class “H” preferred shares

The Company’s Board of Directors authorized for issuance a maximum of 25,000,000 Class “H” preferred shares. The Class “H” preferred shares were issued at $0.0005 per Class “H” preferred share and are convertible into Class “A” common shares at the option of the holder at any time in accordance with the conversion schedule outlined below.

below.
	September 30, 2013			December 31, 2012
	Number of shares $	Weighted averageprice $	Number of shares	$ Weighted averageprice $
Balance, beginning of period Issued Balance, end of period Convertible, end ofperiod	22,200,000 11 - -	0.42 -	22,200,000 -	11 0.42 - -
	22,200,000 11	0.42	22,200,000	11 0.42
	17,316,000 9	0.42	10,212,000	5 0.42

Features of Class “G” and Class “H” preferred shares

The term, conversion rights and conversion schedule are the same for both the Class “G” and the Class “H” preferred shares. The preferred shares have a term commencing from the date of issue until the earlier of December 31, 2013 or a change of control (the “expiry date”).

Both the Class “G” and the Class “H” preferred shares are convertible into Class “A” common shares on a one for one basis, at the option of the holder, at any time prior to the expiry date for no additional consideration to the Company. The number of Class “A” common shares the holder is entitled to receive upon conversion is determined based on the following conversion schedule. The preferred shares shall automatically convert on the expiry date for the number of Class “A” common shares the holder is entitled to as set out in the following conversion schedule:

Time Period	Preferred	Class “G”	Class “A”
	shares	and “H”	Common
	conversion	Preferred	Shares
	schedule %	Shares	Issuable on
		Outstanding	Conversion
Date of issuance to IPO less a day or February 29, 2012	0%	74,590,000	-
IPO date to 6 months after IPO date less a day or March 1,
2012 – August 31, 2012	30%	74,590,000	22,377,000
6 months after IPO date to 12 months after IPO date less a day
or September 1, 2012 – February 28, 2013	46%	74,590,000	34,311,400
12 months after IPO date to 18 months after IPO date less a
day or March 1, 2013 – August 31, 2013	62%	74,590,000	46,245,800
18 months after IPO date to 21 months after IPO date less a
day or September 1, 2013 – November 30, 2013	78%	74,590,000	58,180,200
21 months after IPO date to 24 months after IPO date or
December 1, 2013 – February 28, 2014	100%	74,590,000	74,590,000
Expirydate or December 31, 2013	100%	74,590,000	74,590,000

Prior to the IPO, the holders of Class “G” and Class “H” preferred shares were only entitled to a redemption amount of $0.0005 per Class “G” and Class “H” preferred share.

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The Class “G” preferred shares are redeemable by the Company at any time for the number of Class “A” common shares the holder is entitled to on the date of redemption as set out in the above conversion schedule. The Class “H” preferred shares are redeemable by the Company for $0.0005 each on or after the date that is 21 months after an IPO, upon 30 days’ notice to the holder.

The preferred shares are retractable at the option of the holder commencing on the date that is 21 months after an IPO for the number of Class “A” common shares the holder is entitled to on the date of redemption as set out in the above conversion schedule for $0.0005 each.

In the event that a holder of preferred shares ceases to be eligible to hold preferred shares (e.g. ceases to be a director, officer, employee, consultant or advisor of the Company), the preferred shares held by such holder shall terminate and be cancelled on the date that is 30 days after such holder ceases to be eligible and, to the extent the holder requests such preferred shares be converted or redeemed, shall only be convertible or redeemable for the number of Class “A” common shares the holder is then entitled to on the date the person ceases to be eligible as set out in the above conversion schedule.

13. Share-based payments

13.1 Employee share savings plan

The Company’s Board of Directors approved the establishment of an employee share savings plan (“ESSP”) on May 7, 2013. The maximum number of Class “A” common shares that may be reserved for issuance pursuant to the ESSP is 10% of the total number of issued and outstanding shares, less the maximum aggregate number of shares underlying the ESSP and the shares issuable on the exercise of options granted under the Post IPO Share Option Plan and the Pre IPO Plan. Under the terms of the ESSP, the Company matches 100% of a participating employee’s contributions to the ESSP up to a set maximum of 5% of salary. The Company issues shares from treasury for the employee’s contribution and the matching Company contribution. Compensation expense is recognized based on the fair value of the award on the ESSP contribution date.

13.2 Movements in stock options during the period

The following reconciles the stock options outstanding at the beginning and end of each period:

	Three months ended September 30, 2013	Nine months ended September 30, 2013	Year ended December 31, 2012
Balance, beginning of period Granted Exercised Forfeited Balance, end of period Exercisable, end ofperiod	Number of options Weighted average exercise price $ 142,214,064 0.42 - - - - (2,311,427) 0.39 139,902,637 0.42 92,668,649 0.39	Number of options Weighted average exercise price $ 192,505,688 0.37 6,850,368 0.25 (46,695,000) 0.18 (12,758,419) 0.41 139,902,637 0.42 92,668,649 0.39	Number of options Weighted average exercise price $ 202,958,540 0.22 70,194,338 0.55 (74,432,426) 0.11 (6,214,764) 0.51 192,505,688 0.37 129,172,529 0.29

The stock options outstanding as at September 30, 2013, had a weighted average remaining contractual life of 2.7 years (December 31, 2012 – 2.6 years).

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13.3 Share-based compensation

Share-based compensation has been recorded in the consolidated financial statements for the periods presented as follows:

Share-based compensation has presented as follows:	been recorded in the consolidated financial statements for the periods
	Three months ended September 30, 2013 Three months ended September 30, 2012
	Expensed Capitalized Total Expensed Capitalized Total
Stock options Preferred shares	882 63 945 4,297 1,851 6,148 1,475 795 2,270 1,649 898 2,547
	2,357 858 3,215 5,946 2,749 8,695

	Nine months ended September 30, 2013 Nine months ended September 30, 2012
	Expensed Capitalized Total Expensed Capitalized Total
Stock options Preferred shares	2,633 883 3,516 5,709 2,716 8,425 4,590 2,480 7,070 4,971 2,774 7,745
	7,223 3,363 10,586 10,680 5,490 16,170

14. Credit facility

The amount available for draw under the facility depended on the value attributed to the Company’s Proved reserves by its independent engineers, while drawdown was subject to, among other things, demonstrating sufficient funding (including draws under the Credit Facility) to complete the West Ells project to a defined stage. As at September 30, 2013, $Nil was available for draw under the Credit Facility. Subsequent to period end, the Credit Facility was cancelled by the Company at maturity.

15. Finance costs

15. Finance costs
	For the three months ended September 30, For the nine months ended September 30,
	2013 2012 2013 2012
Finance cost on share repurchase obligation1 Expensed portion of share issue costs2 Finance cost on related party loan3 Finance cost on credit facility4 Financing related costs5 Unwinding of discounts on provisions Less: Amounts capitalized in exploration and evaluation assets6	$ - $ - $ - $ 5,864 - - - 13,012 - - - 266 505 - 1,541 - 871 - 1,471 - 99 214 1,020 351 - - - (2,115)
	$ 1,475 $ 214 $ 4,032 $ 17,378

There were no finance costs associated with the share repurchase obligation for the three and nine months ended September 30, 2013. Finance costs on share repurchase obligation relate to the $210.0 million common share subscriptions, which closed in February 2011. These finance costs relate to accretion of the common share subscriptions, which had a share repurchase right, and have been accounted for using the effective interest method. During the three and nine months ended September 30, 2012, total finance costs of $Nil and $5.9 million were recognized, of which, $Nil and $1.9 million was capitalized in exploration and evaluation assets with the remaining $Nil and $4.0 million expensed in finance costs, respectively. On March 1, 2012, the share repurchase obligation was reclassified to equity.

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There were no share issue costs expensed for the three and nine months ended September 30, 2013. For the three and nine months ended September 30, 2012, expensed portion of share issue costs of $Nil and $13.0 million, respectively, relates to the allocation portion of transaction costs incurred in relation to 433,884,300 common shares issued in February 2011 for $210.0 million, which were previously netted against the share repurchase obligation. 3. The related party loan was terminated in October 2012; as such, there were no finance costs for the three and nine months ended September 30, 2013. During the nine months ended September 30, 2012, the Company drew and repaid $30.0 million on an available $100.0 million credit facility. The loan was accounted for using the effective interest method (Note 18). During the three and nine months ended September 30, 2012, total finance costs of $Nil and $0.3 million were recognized, of which, $Nil and $0.2 million was capitalized in exploration and evaluation assets with the remaining $Nil and $0.1 million expensed in finance costs, respectively.
For the three and nine months ended September 30, 2013, finance costs on the Credit Facility of $0.5 million and $1.5 million were incurred for standby fees (September 30, 2012 - $Nil and $Nil).
For the three and nine months ended September 30, 2013, financing related costs of $0.9 million and $1.5 million are for legal and other professional expenses incurred (September 30, 2012 - $Nil and $Nil).
No finance costs were capitalized for the three and nine months ended September 30, 2013. For the three and nine months ended September 30, 2012, amount consists of $Nil and $1.9 million for the capitalized portion of finance costs on the share repurchase obligation and $Nil and $0.2 million capitalized finance costs on the credit facility, respectively.

16. Loss per share

The weighted average number for basic Class “A” common shares for the periods presented is in the following table. Other than Class “A” common shares, all equity instruments have been excluded in calculating the diluted loss per share as they were anti-dilutive, considering the Company was in a loss position for the periods presented.

	For the three	months ended	For the nine	months ended
	September 30,		September 30,
	2013	2012	2013	2012
Basic – Class “A” common shares	2,884,139,827	2,856,120,186	2,875,184,637	2,541,193,270
Diluted – Class “A” common shares	2,884,139,827	2,856,120,186	2,875,184,637	2,541,193,270
Class “G” preferred shares	52,390,000	61,340,000	52,390,000	61,340,000
Class “H” preferred shares	22,200,000	22,200,000	22,200,000	22,200,000
Stock options	139,902,637	183,786,222	139,902,637	183,786,222

17. Financial instruments

17.1 Capital risk management

The Company can be exposed to financial risks on its financial instruments and in the way that it finances its capital requirements. The Company manages these financial and capital structure risks by operating in a manner that manages its exposure to volatility.

The Company’s financing strategy is to access sufficient capital, through equity issuances, joint ventures and the utilization of debt, in order to maintain a strong capital base for the objectives of maintaining financial flexibility and to sustain the future development of the business. The Company manages its capital structure in order to continue as a going concern and makes adjustments relative to changes in economic conditions and the Company’s risk profile. In order to manage risk, the Company may from time to time issue shares and adjust its capital spending to manage current working capital levels. The Company expects its current capital resources will not be sufficient to complete its development plans through its current operating period and will be required to raise additional funds through equity or debt financings, asset sales or joint ventures. The Company’s ability to continue as a going concern is dependent on its ability to raise additional funds.

The Company’s capital structure currently includes shareholders’ equity and working capital as follows:

	September 30, 2013 December 31, 2012
Working capital deficiency/(surplus) Shareholders’ equity	$ 117,827 $ (215,471) 865,242 871,076
	$ 983,069 $ 655,605

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There is no change in the Company’s objectives and strategies of capital management for the three and nine months ended September 30, 2013. In October 2012, the Company negotiated and signed a $200 million Credit Facility (the “Credit Facility”) with a syndicate of financial institutions (Note 14). The available amount under the Credit Facility is undrawn at September 30, 2013 and the available amount has been excluded from the capital structure. $Nil is available under the Credit Facility based on certain financial covenants under the terms and conditions of a Credit Facility agreement (Note 14). Subsequent to period end, the Credit Facility was cancelled by the Company at maturity.

17.2 Categories of financial instruments

*17.2 Categories of financial instruments*
	September 30, 2013		December 31, 2012
	Carrying	Fair value	Carrying	Fair value
	amount		amount
Financial assets	$	$	$	$
Cash, deposits and other receivables	36,926	36,926	284,811	284,811
Financial liabilities
Other liabilities	154,170	154,170	66,621	66,621

17.3 Fair value of financial instruments

The fair value of cash, term deposits, trade and other receivables, trade and other payables and accrued liabilities approximate their carrying values due to their short term maturity. These financial instruments have been assessed on a Level 1 fair value measurement.

Level 1 fair value measurements are based on quoted prices in active markets. Level 2 fair value measurements are based on valuation models and techniques where the significant inputs are derived from quoted prices or indices. Level 3 fair value measurements are based on unobservable information.

17.4 Financial risk management

Financial risks include market risk (including currency risk, interest rate risk, and price risk), credit risk, liquidity risk and cash flow interest rate risk. The Company does not use any derivative financial instruments to mitigate these risk exposures. The Company does not enter into or trade financial instruments, including derivative financial instruments, for speculative purposes.

17.5 Market risk

Market risk is the risk that changes in market prices will affect the Company’s net loss. The objective of market risk management is to manage and control market risk exposures within acceptable limits. There have been no changes over the prior year to the Company’s objectives, policies or processes to manage market risks.

The Company is exposed to risks arising from fluctuations in foreign currency exchange rates. Thus, exchange rate fluctuations can affect the fair value of future cash flows. This exposure primarily relates to certain expenditure commitments, deposits, and accounts payable which are denominated in US dollars and/or HK dollars. The Company manages this risk by monitoring foreign exchange rates and evaluating their effects on using Canadian or U.S. vendors as well as timing of transactions. The Company had no forward exchange rate contracts in place as at or during the three and nine months ended September 30, 2013.

Commodity price risk is the risk that the value of future cash flows will fluctuate as a result of changes in commodity prices. Commodity prices for petroleum are impacted by world economic events that dictate the levels of supply and demand. The Company has not attempted to mitigate commodity price risk through the use of various financial derivative or physical delivery sales contracts.

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17.6 Interest rate risk management

Interest rate risk is the risk that future cash flows will fluctuate as a result of changes in market interest rates. As at September 30, 2013, the Company does not have any floating rate debt.

The Company’s cash and cash equivalents consists of cash held in bank accounts and term deposits that earn interest at variable interest rates. Future cash flows from interest income on cash will be affected by interest rate fluctuations. Due to the short-term nature of these financial instruments, fluctuations in market rates do not have a significant impact on estimated fair values or result in material interest rate risk. The Company manages interest rate risk by maintaining an investment policy that focuses primarily on preservation of capital and liquidity. For the three and nine months ended September 30, 2013, the interest rate earned on cash equivalents was between 0.5% and 1.30% and 0.5% and 1.35%, respectively.

17.7 Credit risk management

Credit risk is the risk of financial loss to the Company if a counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Company’s cash, deposits and receivables and GST receivables. As at September 30, 2013, the Company’s receivables consisted of 71% from Goods and Services Tax receivable, 12% from oil sale receivables, 1% joint interest billing receivable and 16% from other receivables (December 31, 2012 – 68% from oil sale receivables, 26% from Goods and Services Tax receivable and 6% from other receivables).

The Company's cash and cash equivalents as at September 30, 2013, are held in accounts with third party financial institutions and consist of invested cash and cash in the Company's operating accounts. The cash equivalents portion is invested in high yield savings and high grade liquid term deposits.

The Company is exposed to credit risk from the purchasers of its crude oil. At September 30, 2013, there was no allowance for impairment of accounts receivable and the Company did not provide for any doubtful accounts nor was it required to write-off any receivables, as no receivables were considered past due or impaired (December 31, 2012 - $Nil). The Company considers any amounts outstanding in excess of 30 days past due.

17.8 Liquidity risk management

Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company’s approach to managing liquidity risk is to plan that it will have sufficient liquidity to meet its liabilities when due, using either equity or debt proceeds. At September 30, 2013, the Company had negative working capital of $117.8 million and an accumulated deficit of $193.4 million. The Company’s recent losses and negative cash flow have resulted in a material uncertainty that casts significant doubt about the appropriateness of the use of the going concern assumption (Note 2).

The Company utilizes authorizations for expenditures to manage its planned capital expenditures and actual expenditures are regularly monitored and modified as considered necessary.

18. Related party transactions

Balances and transactions between the Company and its subsidiary, who are related parties, have been eliminated on consolidation.

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18.1 Trading transactions

The Company had transactions with a law firm in which a director of the Company is a partner. The Company also paid consulting fees to two directors of the Company (Note 18.2).

During the period, the Company recorded the following trading transactions with related parties:


	Share issue costs Legal expense Finance fees Capitalized legal fees Expensed portion of IPO costs

	September 30, 2013 December 31, 2012
	Legal $ 745 $ 136

Advisory Fee Agreement (the “Agreement”)

During 2010, the Company entered into the Agreement in which the Company agreed to pay a fee for services to be rendered in connection with an initial filing of an IPO prospectus and listing. On March 1, 2012, the Company successfully closed its Qualifying IPO and listing on the SEHK. Pursuant to this event, the obligation was settled through the issuance of 13,566,395 common shares for $8.4 million and cash paid of $0.4 million. The service provider is a company which is controlled by a director who is a principal of a significant shareholder of the Company, and who also holds a senior management position with the service provider company.

Credit Facility Agreement (the “Credit Facility Agreement”)

The Company had a Credit Facility Agreement with a non-arm’s length lender in which a credit facility for general working capital purposes was available of up to a maximum of $100 million. During the nine months ended September 30, 2012, the Company drew $30.0 million on the credit facility and subsequently repaid the balance prior to period end. The loan was a financial liability and was classified as other liabilities and recorded at amortised cost, using the effective interest method. For the three and nine months ended September 30, 2012, total finance costs were $Nil and $0.3 million, of which $Nil and $0.1 million was expensed and $Nil and $0.2 million was capitalized as the funds are directly attributable to the development of the Company’s qualifying assets, respectively. Upon repayment of the outstanding balance owing on this credit facility, $0.3 million was recorded to Other Reserve due to the related party nature of this transaction. In the fourth quarter of 2012, this Credit Facility Agreement was terminated.

Employee Share Purchase Loan

The Company loaned $50,000 to a senior employee to facilitate the exercise of stock options to purchase 250,000 Class “A” common shares. The loan bears interest at 3.0% per annum, is secured by the common shares and matures December 15, 2013. The Company classified the loan as other receivable under financial assets.

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18.2 Compensation of key management personnel and directors

The remuneration of the directors and key management executives is determined by the Compensation Committee and consists of the following amounts:

	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Directors’ fees Salaries and allowances Share-based payments Consulting fees Performance related incentive payments	$ 221 $ 142 $ 548 $ 517 389 334 1,146 1,067 2,693 7,398 7,204 10,713 226 225 676 675 - 7,928 - 12,928
	$ 3,529 $ 16,027 $ 9,574 $ 25,900

19. Operating lease arrangements

Payments recognised as an expense

		For the three	months ended			For the nine	months	ended
		September 30,				September 30,
		2013		2012		2013		2012
Minimum leasepayments	$	537	$	519	$	1,589	$	1,538

20. Commitments and contingencies

As at September 30, 2013, the Company’s commitments are as follows:

	Due within the next 12 months Due in the next 2 to 5years Over 5 years
Drilling, other equipment and contracts Lease rentals Office leases1	$ 38,409 $ - $ - 1,840 7,225 10,593 2,155 8,494 2,278
	$ 42,404 $ 15,719 $ 12,871

Office leases only includes minimum lease commitments up to October 31, 2014 for the Hong Kong premises lease.

Following suspension of construction at the Company’s West Ells SAGD project, many suppliers have placed builders’ liens on the property to secure past due and unpaid invoices. The Company has been served with eight lawsuits claiming payment for unpaid invoices for a total aggregate value of $18.8 million. Through the normal course of business, the Company has recorded the unpaid invoices in trade and other payables. The Company is pursuing additional financing to enable it to clear up these issues and continue developing its business.

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21. Supplemental cash flow disclosures

Non-cash transactions

For the three and nine months ended September 30, 2013, the Company had the following non-cash transactions:

capitalized general and administrative costs including share-based payments and finance costs (Notes 7 and 8).

For the three and nine months ended September 30, 2012, the Company had the following non-cash transactions:

the settlement of the advisory fee through the issuance of 13,566,395 common shares for $8.4 million (Note 18.1);
the share repurchase obligation has been reclassified to share capital for $0.3 million (Note 12); and
capitalized general and administrative costs including share-based payments and finance costs (Notes 7 and 8).

Supplemental cash flow disclosures

	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Cash provided by (used in): Trade and other receivables $ 2,910 $ (321) $ (106) $ 1,415 Prepaids and deposits 263 269 (297) (223) Trade and other payables 19,146 9,035 85,349 14,086 $ 22,319 $ 8,983 $ 84,946 $ 15,278 Changes in non-cash working capital relating to: Operating activities Trade and other receivables $ (122) $ (750) $ (317) $ 1,212 Prepaid expenses and deposits 263 306 (297) (187) Trade and other payables (1,726) (8,160) 381 (328) (1,585) (8,604) (233) 697 Investing activities Exploration and evaluation assets 23,370 17,587 84,589 19,594 Financing activities Share issue costs, IPO costs and finance costs 534 - 590 (5,013) $ 22,319 $ 8,983 $ 84,946 $ 15,278 Reconciliation of certain amounts disclosed in the Condensed Interim Consolidated Statements of Cash flows: Reconciliation of: Capital investments $ 76,694 $ 50,097 $ 325,143 $ 184,617 Changes in non-cash working capital (23,370) (17,587) (84,589) (19,594) Payments for capital investments 53,324 32,510 240,554 165,023 Reconciliation of: Share issue costs, IPO costs and finance costs 1,378 - 3,011 19,914 Changes in non-cash working capital (534) - (590) 5,014 Payments for share issue costs, IPO costs and finance costs $ 844 $ - $ 2,421 $ 24,928	$ 2,910 $ (321) $ (106) $ 263 269 (297) 19,146 9,035 85,349	1,415 (223) 14,086
	$ 22,319 $ 8,983 $ 84,946 $	15,278
	$ (122) $ (750) $ (317) $ 263 306 (297) (1,726) (8,160) 381	1,212 (187) (328)
	(1,585) (8,604) (233)	697
	23,370 17,587 84,589	19,594
	534 - 590	(5,013)
	$ 22,319 $ 8,983 $ 84,946 $	15,278
	53,324 32,510 240,554 165,023
	1,378 - 3,011 19,914 (534) - (590) 5,014
	$ 844 $ - $ 2,421 $ 24,928

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22. Subsequent event

23. Approval of condensed interim consolidated financial statements

The condensed interim consolidated financial statements were approved by the Board of Directors and authorized for issue on November 12, 2013.

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Appendix to the Condensed Interim Consolidated Financial Statements

Additional Stock Exchange Information

Additional information required by the SEHK and not shown elsewhere in these Condensed Consolidated Interim Financial Statements is as follows:

A1. Sunshine Oilsands Ltd. Non-Consolidated Statement of Financial Position

The Company’s statement of financial position is on a non-consolidated basis which excludes the Company’s wholly owned subsidiary, Sunshine Hong Kong. The Company’s wholly owned subsidiary, Fern Energy Ltd., was wound up during the nine months ended September 30, 2013.

	September 30, 2013 December 31, 2012
Non-current assets Property and equipment Exploration and evaluation assets Amounts due from subsidiary Investment in subsidiary Current assets Other receivables Prepaids and deposits Cash and cash equivalents Current liabilities Trade and other payables Provisions for decommissioning obligations Amount due to subsidiary Net current assets (liabilities) Total assets less current liabilities Non-current liabilities Provisions for decommissioning obligations Net assets Capital and reserves Share capital Reserve for share-based compensation Deficit	$ 631,714 $ 327,968 381,126 366,625 663 293 - 60
	1,013,503 694,946
	2,261 2,147 998 691 34,179 282,230
	37,438 285,068
	154,170 68,782 1,103 795 328 -
	155,601 69,577
	(118,163) 215,491
	895,340 910,437
	29,773 39,034
	$ 865,567 $ 871,403
	$ 1,003,894 $ 991,798 54,730 47,395 (193,057) (167,790)
	$ 865,567 $ 871,403

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A2. Directors’ emoluments and other staff costs

The directors’ emoluments and other staff costs are broken down as follows:

	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Directors’ emoluments Directors’ fees Salaries and allowances Contribution to retirement benefit scheme Share-based payments Performance related incentive payments Other staff costs Salaries and other benefits Contribution to retirement benefit scheme Share-based payments Performance related incentive payments Total staff costs, including directors’ emoluments Less: bonus included with expensed portion of IPO costs Less: staff costs capitalized to qualifying assets	$ 221 $ 142 $ 548 $ 517 226 225 676 675 - - - - 1,913 5,848 4,971 8,108 - 7,000 - 12,000
	2,360 13,215 6,195 21,300
	4,686 2,874 15,456 9,061 67 39 371 226 1,302 2,846 5,614 8,063 - 294 - 2,986
	6,055 6,053 21,441 20,336
	8,415 19,270 27,636 41,636 - - - 5,000 3,118 4,803 10,326 11,567
	$ 5,297 $ 14,467 $ 17,310 $ 25,069

Details of the directors’ emoluments are as follows:

	For the three months ended September 30, 2013
Name of Director	Directors’ fees Salaries and allowances Contribution to retirement benefits scheme Share-based compensation Performance related incentive payments Total
Michael Hibberd Songning Shen Tseung Hok Ming Tingan Liu Haotian Li Raymond Fong Wazir (Mike) Seth Greg Turnbull Robert Herdman Gerald Stevenson	$ 26 $ 113 $ - $ 554 $ - $ 693 26 113 - 554 - 693 21 - - 609 - 630 19 - - - - 19 15 - - 30 - 45 22 - - 29 - 51 21 - - 29 - 50 22 - - 42 - 64 25 - - 33 - 58 24 - - 33 - 57
	$ 221 $ 226 $ - $ 1,913 $ - $ 2,360

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	For the three months ended September 30, 2012
Name of Director	Directors’ fees Salaries and allowances Contribution to retirement benefits scheme Share-based compensation Performance related incentive payments Total
Michael Hibberd Songning Shen Tseung Hok Ming Tingan Liu Haotian Li Kevin Flaherty1 Raymond Fong Zhijian Qin1 Wazir (Mike) Seth Greg Turnbull Robert Herdman Gerald Stevenson	$ 18 $ 113 $ - $ 2,464 $ 3,500 $ 6,095 18 113 - 2,464 3,500 6,095 14 - - 626 - 640 - - - - - - 13 - - 47 - 60 - - - - - - 14 - - 47 - 61 - - - - - - 15 - - 47 - 62 13 - - 59 - 72 20 - - 47 - 67 18 - - 47 - 65
	$ 143 $ 226 $ - $ 5,848 $ 7,000 $ 13,217

	For the nine months ended September 30, 2013
Name of Director	Directors’ fees Salaries and allowances Contribution to retirement benefits scheme Share-based compensation Performance related incentive payments Total
Michael Hibberd Songning Shen Tseung Hok Ming Tingan Liu Hoatian Li Raymond Fong Wazir (Mike) Seth Greg Turnbull Robert Herdman Gerald Stevenson	$ 66 $ 338 $ - $ 1,424 - $ 1,828 67 338 - 1,424 - 1,829 47 - - 1,782 - 1,829 45 - - - - 45 43 - - 49 - 92 53 - - 43 - 96 55 - - 43 - 98 52 - - 80 - 132 63 - - 63 - 126 57 - - 63 - 120
	$ 548 $ 676 $ - $ 4,971 - $ 6,195

	For the nine months ended September 30, 2012
Name of Director	Directors’ fees Salaries and allowances Contribution to retirement benefits scheme Share-based compensation Performance related incentive payments Total
Michael Hibberd Songning Shen Tseung Hok Ming Tingan Liu Hoatian Li Kevin Flaherty1 Raymond Fong Zhijun Qin1 Wazir (Mike) Seth Greg Turnbull Robert Herdman Gerald Stevenson	$ 62 $ 338 $ - $ 2,941 $ 3,500 $ 6,841 63 338 - 2,941 3,500 6,841 50 - - 1,791 4,600 6,441 - - - - - - 46 - - 73 - 119 - - - 2 - 2 56 - - 49 75 180 - - - 2 - 2 59 - - 48 75 182 53 - - 86 100 239 68 - - 87 75 230 60 - - 87 75 222
	$ 517 $ 676 $ - $ 8,107 $ 12,000 $ 21,299

These individuals ceased to be directors of the Company in 2011.

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A3. Five highest paid individuals

The five highest paid individuals includes three directors of the Company and two officers of the Company for the three and nine months ended September 30, 2013 (three and nine months ended September 30, 2012 – three directors and two officers). Since the directors’ emoluments are disclosed above, the compensation of the remaining officers for the Company is as follows:

officersforthe Companyis asfollows:
	For the three months ended September 30, For the nine months ended September 30, 2013 2012 2013 2012
Salaries and other benefits Contributions to retirement benefits scheme Share-based payments Performance related incentive payments	$ 182 $ 167 $ 539 $ 537 - 2 4 5 558 1,030 1,662 1,710 - 560 - 560
	$ 740 $ 1,759 $ 2,205 $ 2,812

The five highest paid individuals were within the following emolument bands:

	For the three months	ended	For the nine months	ended
	September 30,		September 30,
	2013	2012	2013	2012
HK$ nil to HK$1,000,000	-	-	-	-
HK$1,000,001 to HK$1,500,000	-	-	-	-
HK$1,500,001 to HK$2,000,000	-	-	-	-
HK$2,000,001 to HK$2,500,000	-	-	-	-
HK$2,500,001 to HK$3,000,000	1	-	-	-
HK$3,000,001 to HK$3,500,000	1	-	-	-
HK$3,500,001 to HK$4,000,000	-	-	-	-
HK$4,000,001 to HK$4,500,000	-	-	-	-
HK$4,500,001 to HK$5,000,000	1	-	-	-
HK$5,000,001 to HK$5,500,000	2	1	1	-
HK$5,500,001 to HK$6,000,000	-	-	-	-
HK$6,000,001 to HK$6,500,000	-	-	-	-
HK$6,500,001 to HK$7,000,000	-	-	-	-
> HK$7,000,000	-	4	4	5

For the three and nine months ended September 30, 2013, respectively, the conversion factor used in the above table is 1C$ = 7.47 HK$ and 1C$ = 7.58 HK$ (three and nine months ended September 30, 2012 – 1C$ = 7.793 HK$ and 1C$ = 7.741 HK$, respectively)

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AI assistant

Sunshine Oilsands Ltd. — Interim / Quarterly Report 2013

50340_rns_2013-11-12_cf0786ef-fb4d-4275-8ad5-af96e9d98a3b.pdf

SUNSHINE OILSANDS LTD. 陽光油砂有限公司 *

(a corporation incorporated under the Business Corporations Act of the Province of Alberta, Canada with limited liability)

(HKEx: 2012; TSX: SUO)

Results for Third Quarter 2013

Hong Kong, November 12, 2013

*For identification purposes only

SUNSHINE OILSANDS LTD.

SUNSHINE OILSANDS LTD. Announcement of results for the three and nine month periods ended September 30, 2013

Highlights

Message to Shareholders

SUNSHINE OILSANDS LTD.

FORWARD-LOOKING INFORMATION AND DISCLAIMER

About Sunshine Oilsands Ltd.

For further enquiries, please contact:

SUNSHINE OILSANDS LTD.

Management's Discussion and Analysis

Forward‐Looking Information

Overview

SUNSHINE OILSANDS LTD.

Operational Update

West Ells

Thickwood and Legend

SUNSHINE OILSANDS LTD.

Alberta Government Initiatives

Non‐IFRS Financial Measures

Operational and Financial Highlights

SUNSHINE OILSANDS LTD.

Summary of Quarterly Results

SUNSHINE OILSANDS LTD.

Results of Operations

Finance Expense

General and Administrative Costs

SUNSHINE OILSANDS LTD.

Share-based payments

Other Income

SUNSHINE OILSANDS LTD.

Expensed portion of IPO costs

Depreciation

Income Taxes

Liquidity and Capital Resources

SUNSHINE OILSANDS LTD.

Cash Flows Summary

SUNSHINE OILSANDS LTD.

Operating Activities

Investing Activities

Financing Activities

Contractual obligations and commitments

Shares Outstanding

SUNSHINE OILSANDS LTD.

Transactions with related parties

Credit Facility Agreement (the “Credit Facility Agreement”)

Employee Share Purchase Loan

The Company classified its legal costs with McCarthy Tetrault LLP as follows:

SUNSHINE OILSANDS LTD.

Off-balance sheet arrangements

Subsequent event

Recent accounting pronouncements issued but not yet adopted

Critical accounting judgments and key sources of estimation uncertainty

Oil and gas reserves

SUNSHINE OILSANDS LTD.

Bitumen Reserves

Decommissioning costs

Share repurchase obligation

Share-based payments

SUNSHINE OILSANDS LTD.

Deferred income taxes

Risk Factors

Disclosure Controls and Procedures

Internal Controls Over Financial Reporting

Additional Stock Exchange Information

Code of Corporate Governance Practice (the “Code”)

SUNSHINE OILSANDS LTD.

Compliance with the Model Code for Securities Transactions by Directors of Listed Companies (the “Model Code”)

Purchase, sale or redemption of Sunshine’s listed securities

Class “A” Common Shares

Class “G” Preferred Shares

Class “H” Preferred Shares

Sunshine Oilsands Ltd. Interim / Quarterly Report 2013