Mr. Amir Adnani reports

BRAZIL RESOURCES INC. ISSUES YEAR-END SHAREHOLDER REPORT

Brazil Resources Inc. has issued a year-end shareholder report. Please find the report from chairman Amir Adnani below.

Dear shareholder,

On behalf of the board of directors and the team at Brazil Resources Inc., I am pleased to provide you with a report on the company's corporate, acquisition and exploration activities during 2011.

I would like to thank you for your continued support as a BRI shareholder. Your trust in the company and its management is greatly appreciated.

During 2011, we acquired several projects and increased our overall landholdings in Brazil from under 5,000 to over 300,000 acres. We further strengthened an already world-class management team, and worked toward identifying drill-ready targets and prospective acquisitions to focus on in the new year.

As the company continued to advance, within this challenging economic environment where many gold explorers having seen their valuations decline by 30 per cent or more, shares of the company have more than doubled since its initial public offering in May, 2011, and have never traded below $1.

With more than $10-million in cash, no debt and approximately 39 million shares outstanding, BRI is in a strong position to accelerate its growth strategy and to pursue the acquisition of advanced-stage properties with known resources.

Company highlights from 2011

Strong treasury

The company recently completed a $4.7-million private placement. Given the difficult market conditions, the completion of this financing demonstrates a strong vote of confidence for management and the company's prospective projects. Currently, the company has over $10-million in the treasury and approximately 39 million shares outstanding.

Expanding throughout Brazil

A series of acquisitions totalling four projects and over 300,000 acres signaled the start of the company's expansion throughout Brazil in 2011.

Permitting advancements at Montes Aureos

The company has recently received all necessary permits for its previously announced drilling program on the Montes Aureos project, which is expected to commence imminently. The company previously identified a two-kilometre by 300-metre gold anomaly that is nearby to and on strike with other known gold deposits.

Bolstering a world-class team

The company expanded its technical and management teams in 2011 with the appointments of:

• Paulo Pereira, vice-president of exploration: Over 25 years of experience in exploration and mining activities in Brazil and Canada working for major mining companies;
• Enzio Garayp, director: Formerly served as the exploration manager for Kinross in Brazil and oversaw the eight-million-ounce expansion of Brazil's 18-million-ounce Paracatu mine;
• Herb Dhaliwal, adviser: Formerly Canada's Minister of Natural Resources and served in the cabinet under Prime Minister Chretien;
• Ovidio Antonio de Angelis, adviser: Former Minister of Regional Politics in Brazil and served in the Brazilian cabinet under President Fernando Cardoso; recently served as Secretary of the Foreign Trade Bureau of Goias State.

Catalysts for 2012 and beyond

With a promising start to the company's expansion already under way, more than $10-million in cash and three advanced exploration programs already scheduled for 2012, we are focused on further ramping-up acquisitions and exploration activities.

Continued expansion throughout Brazil

In consultation with our strategic partner and shareholder the Brasilinvest Group, a leading merchant bank, and our seasoned Brazil-based technical team, we have aggressively identified assessed and continue to review expansion opportunities throughout Brazil.

Drilling at Montes Aureos

A drill program on the Montes Aureos project is expected to commence shortly, and we anticipate releasing results in first half of 2012.

Continuing exploration at Trinta and Maua

The company continues to conduct its previously disclosed exploration programs with the objective of identifying drill-ready targets. The Trinta and Maua projects are located in close proximity to Jaguar Mining's Gurupi open-pit gold project.

Exploration activities at Artulandia

The company recently signed an option agreement to acquire a 100-per-cent interest in the Artulandia property in prolific Goias state. Artulandia hosts two large parallel gold trends and each are approximately 11 km in length. Company geologists believe a source to the gold trend may exist on the property and an exploration program is under way with the objective to identify drill-ready targets.

Increasing recognition

The investment community is becoming increasingly aware of the company, its management team and growth prospects. Since its IPO, the company has enjoyed press coverage from various mining industry publications, including Northern Miner and Resource World magazine.

Gold's role in today's world

The board and management recognize the increasingly important role that gold is serving to stabilize individuals, companies, governments and central banks throughout the world during this extended era of economic uncertainty. The company was formed on the basis of building a world-class team focused on making and advancing gold discoveries in Brazil, and possibly in additional expanding gold belts in South America.

We look forward to capitalizing on the opportunities in the gold sector as we continue to build on the foundation we have established by achieving major acquisition and exploration milestones in 2012. Thank you again for your confidence in management. We welcome your continued participation in Brazil Resources Inc.

Warm regards,

Amir Adnani

Chairman

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