Description of the Business

GlobeStar is a Canadian company engaged in the acquisition, exploration and development of mineral resource properties. The Company owns a portfolio of mineral property assets or rights in the Dominican Republic and Canada (Quebec), either directly or through its subsidiaries. The Company’s focus has been on the development of its wholly-owned Cerro de Maimón project in the Dominican Republic, which is currently in the start-up and pre-production operating phase, having made an initial shipment of copper concentrate to a customer in early November 2008.

Recent Highlights

Recent developments with respect to the Company’s operations have included:

Start-up activities at the Company’s 100%-owned Cerro de Maimón copper/gold project in the Dominican Republic progressed on schedule during the third quarter.

The Company’s first shipment of copper concentrate, totalling approximately 2,000 tonnes, was made on November 5, 2008 to a smelter located in China. A second shipment of 2,300 tonnes is scheduled to leave port in mid-November.

Commissioning of both the sulphide copper processing plant and the oxide gold and silver plant at the Cerro de Maimón project is now complete and production is being ramped up.

The 6.8 MW power plant at the Cerro de Maimón project was commissioned in early September and has been operating on a continuous basis since then.

In October 2008, the Company announced the appointment of David Brace as Chief Executive Officer.

The results of the first 11 holes of a 34-drill hole program at Loma Pesada in the Dominican Republic were announced during the third quarter. The best reported intersections (true width) included 6.82 meters at 2.66% copper (hole LP-22) and 9.14 meters at 1.85% copper (hole LP-24).

Corporate

In October 2008, the Company announced the appointment of David Brace as Chief Executive Officer. Mr. Brace holds a B.Sc., Geology, and an MBA, and has over 30 years experience in the mining industry. His most recent position was as a senior executive of Aur Resources Inc., before its acquisition by Teck Cominco Limited. Larry Ciccarelli, the Company’s interim CEO since February 2008, will continue in his role as non-executive Chairman.

Liquidity and Capital Resources

Working Capital

GlobeStar has a working capital deficit of $1,807,724 at September 30, 2008

(compared to a working capital surplus of $18,604,275 as at December 31, 2007). The decrease in working capital is attributable to higher accrued liabilities for future payments for the Cerro de Maimón project and the current portions of both the long-term debt and the derivative-related liabilities. Quarterly principal and interest payments will begin the earlier of three months after the completion of the project (as defined in the Company’s credit agreement with Nedbank) or June 30, 2009. Based on the progress of the project to date, repayments are estimated to begin on March 31, 2009. Settlements of derivative-related liabilities are scheduled to commence in January 2009 and monthly thereafter.

In the short-term, the Company intends to use its current cash and cash equivalents to meet its obligations as they come due.

However, the Company’s ability to meet its medium-term and long-term obligations is largely dependent on the ability of the Cerro de Maimón project to generate sufficient cash flows from operations.

These cash flows are contingent upon the Company’s ability o produce sufficient saleable product from the project and upon the prices received from customers for the contained metals in such product, which is beyond the control of the Company.

Since the project is in the initial start-up phase of operations, there is still significant uncertainty as to the sustainable production levels from the mine. Also, the current global economic conditions have resulted in significant volatility in commodity prices for the Company’s products. At current market conditions, the Company does not foresee any material problems; however, large decreases in prices could impair the Company’s ability to generate sufficient cash flow from operations to meet its obligations.

In the past, the Company has financed its operations and investments primarily through the issuance of share capital and debt financing. The Company’s credit facility with Nedbank is now fully drawn.

There can be no assurance that additional financing will be available at any given time in the future, if necessary, should the cash flows from operations be insufficient. In addition, deteriorating global economic conditions and tightening credit markets could increase the cost of obtaining capital from outside sources and limit the availability of funds.

Capitalization

As at September 30, 2008 the Company’s fully diluted common shares were 111,654,489. The potential dilution relates to 6,393,000 outstanding stock options issued to officers, directors, employees and consultants (at weighted average exercise price of C$1.49). There are no warrants outstanding at September 30, 2008.

The Company had 105,261,489 common shares outstanding at September 30, 2008 as compared to common shares outstanding as at December 31, 2007 of 102,354,397. The increase is due to the exercise of 1,177,092 warrants during the nine months of 2008, and 1,730,000 options exercised.

As at December 31, 2007 the Company’s fully diluted common shares were 109,649,489. The potential dilution relates to 6,118,000 stock options issued to officers, directors, employees and consultants (at weighted average exercise price of C$1.18) and 1,177,092 warrants outstanding at December 31, 2007 (at weighted average exercise price of C$0.68).

Cerro de Maimón Project

Since 2004, the principal focus and key priority of the Company has been the development of its wholly-owned Cerro de Maimón project located in the Dominican Republic. Having completed both a feasibility study in 2004 and the relevant Technical Report in 2005, the Company accelerated project development activities through 2006 and commenced construction at the site in 2007.

During 2008, construction of the processing facilities advanced with no major issues or equipment shortages. In June 2008, the crushing area was completed and commissioned on time. In late July 2008, the Company announced that construction was substantially complete and that commissioning of project facilities had begun. In August 2008, the Company announced the successful commissioning of the sulphide processing plant.

Start-up and operation of the project’s 1,300 metric tonnes per day (“mtpd”) sulphide process plant and related facilities have operated essentially on a continuous basis since the beginning of September, except for a seven-day period when the 800 hp ball mill motor failed to start due to a motor malfunction and had to be removed from service. The motor was repaired on an expedited basis and the equipment returned to service and is currently operating normally.

By early November, the Company had produced approximately 4,500 tonnes of copper concentrate grading approximately 28% Cu, 6 grams/tonne Au, and 490 grams/tonne Ag. On November 5, 2008, the Company’s first shipment of approximately 2,000 tonnes of copper concentrate left the Dominican Republic to a smelter located in China, with a second shipment of approximately 2,300 tonnes scheduled to leave port in mid-November.

As a result of high grade feed (about 5.5% Cu) to the sulphide process plant, compared to a plan of 2.5% Cu, mill throughput is currently limited to 55% to 80% of design, so as not to overload the flotation circuit and ensure maximum recoveries. This head grade is approximately 220% above the design grade of 2.5%. Reducing the tonnage allows the plant to process the higher grade material in the flotation plant, while maintaining good copper recovery and satisfying production levels. The plant has proven to operate at design capacity of 60 tonnes per hour on a continuous basis.

Commissioning of the 700 mtpd oxide gold and silver plant was completed in October 2008. The Company is currently ramping up production of this plant.

The 6.8 MW power plant, which is operated with heavy fuel oil (“HFO”), was fully commissioned

in early September and has operated on a continuous basis since then.

Mining activity has remained on schedule. A modification to the mine plan and an additional pushback were designed in order to control a localized wall failure in the pit. The additional material from the pushback is not expected to affect the current mining schedule. During the third quarter, mining operations have continued on plan and sufficient waste material has been mined to sustain operations going forward.

The Company substantially completed the hiring of all operating personnel for the project during the second quarter in anticipation of initial production.

A.E. Olson, MAusIMM, the Company’s Vice President Projects and a Qualified Person as defined under Canadian National Instrument 43-101 (“NI 43-101”), supervised the preparation of and verified the technical information contained in this release relating to the Cerro de Maimón project.

Exploration

In addition to advancing the Cerro de Maimón project, the Company continues its exploration program at its other mineral properties in the Dominican Republic, exploring principally for copper and gold resources that can extend the mine life of Cerro de Maimón or develop additional base and precious metal mining operations.

The Company also conducted a drilling exploration program on the Moblan property in Quebec in 2007 and has been processing the new data with the intention of having a NI 43-101 compliant resource estimate finalized before the end of 2008.

The following represents an updated summary of the Company’s exploration activities in the

Dominican Republic and Canada.

Copper/Gold Exploration – Dominican Republic

In the first half of 2007, the Company commissioned an extensive electromagnetic/magnetic (“EM/Mag”) airborne survey program over the Maimón, Cuance/Los Hojanchos and Bayaguana concessions. The survey’s scope was to test deeper extensions of known mineralized massive

sulphide deposits and to seek new, non-outcropping mineralization that was not detected by the shallow detection methods used in the past. Filtered and leveled data was received in mid-June 2007, followed by target selection and drilling in the second half of last year.

A total of 297 anomalies were identified. The target prioritization plan that GlobeStar is currently implementing assembles all the available geological and geochemical data from the EM/Mag anomalies and establishes priorities for subsequent field geological reconnaissance.

Cerro de Maimón VMS Cluster

The highest concentration of EM/Mag anomalies occurred in the immediate vicinity of the Cerro de Maimón Mine (less than five kilometres away). The current exploration program in this area, of approximate 30 km2, includes detailed lithological, structural and alteration mapping. Additionally,

an 80 kilometre Induced Polarization (“IP”) survey has been designed to cover the main

electromagnetic conductors, and it is planned to be carried out in the first quarter of 2009.

Detailed surface geological mapping was carried out in June and July 2008 in the Barbuito West area, located 3.5 kilometres northeast of the Cerro the Maimón deposit. The geological mapping followed a 3 km2 soil geochemistry survey and a 14 kilometre IP survey. The soil geochemistry shows a central Cu anomaly that coincides with a mafic flow unit with sericite/quartz/hematite and disseminated pyrite alteration and a strong IP response. A drilling target has been proposed in this area.

Since August 2008, the mapped area has been extended significantly and it is expected that by yearend 2008, mapping will be finalized over a the 30 km2 area, with a complete characterization of the main alteration areas. The new mapping, jointly with results of the proposed IP survey, is currently expected to define additional drill targets.

Loma Pesada

The Loma Pesada copper-zinc massive sulphide deposit contains small amounts of silver and gold and is located in GlobeStar’s 100%-owned Maimón concession, 14 kilometres to the northwest of Cerro de Maimón.

Loma Pesada has an estimated inferred resource of 1.09 million tons grading 2.22% Cu at a 1% Cu cut-off grade (Chenard Technical Report, February 2006).

In late May 2008, GlobeStar initiated a 34 drill hole program in Loma Pesada with three main objectives; to explore the southern and northern continuity of the known mineralized zone (as suggested by new IP results), increase the confidence of the estimated mineral resource and expand the estimated resource. The drill program was completed by the end of September 2008, totalling 4,380 metres.

The results of the first 11 holes were disclosed in a press release dated August 20, 2008. The best reported intersections (true width) included 6.82 meters at 2.66% Cu (hole LP-22) and 9.14 meters at 1.85% Cu (hole LP-24).

The program for the fourth quarter of 2008 includes data validation, development of a new digital elevation model (2.5 metre contour) and compilation of a geological model.

Currently, the Loma Pesada is the best known and largest satellite volcanogenic massive sulphide deposit in the area surrounding the Cerro de Maimón project. After the new data is fully validated, GlobeStar will update the NI 43-101 compliant mineral resource estimate of Loma Pesada and expects to evaluate the economic and technical feasibility of mining the mineralized material from Loma Pesada and processing it at the Cerro de Maimón processing facility.

Cuance and Los Hojanchos Properties

A nine-hole drill program (totalling 1,023 metres) was completed early this year on the new Loma Lambedera discovery located on the Cuance concession, with the best intersection grading 1.22 grams/tonne gold over a 15 metre core length.

Exploration activities on the Cuance and adjacent Los Hojanchos concessions have been fully funded by the Company’s joint venture partner, Everton Resources Inc., which has the option of spending $1.17 million over three years to earn a 50% interest in the properties. Everton can earn an additional 20% interest by funding a feasibility study to bring the project into production.

Bayaguana District

The Bayaguana District is the second largest hydrothermal system identified to date in the Dominican Republic after Pueblo Viejo.

In August 2008, Paterson, Grant and Watson carried out a new magnetic interpretation of the 2007 Fugro Survey of this district and the analysis revealed a number of NW-striking, high-angle structures. Some of these structures, such as Dona Amanda and Dona Loretta, have already been shown to host hydrothermal alteration and mineralization.

In September 2008, a regional mapping program was commenced in the eastern segment of the Bayaguana district to study the surface expression of these structures and to determine their continuity below thick sections of carbonaceous epiclastic sedimentary rocks, which are identical to the host rock at Pueblo Viejo. The current mapping program, which is expected to be finalized in the first quarter of 2009, will be used to identify targets with high potential of a Pueblo Viejo sediment hosted style of mineralization.

Other areas

Two small drill programs were conducted on the Cerro Gordo and Loma Hombre EM targets during the first six months of 2008, with no notable results. As a result, no further drilling or exploration work is proposed with respect to these targets.

Nickel Exploration – Dominican Republic

In the past two years, GlobeStar has focused most of its nickel exploration program in the Dominican Republic in the northern edge of the 43 kilometre long segment of the peridiotite belt that the Company controls. During the first nine months of 2007, the Company finished its Cumpié Hill drilling program and focused on two adjacent areas, Corozal Ridge and La Leonora River. At the same time, the Company carried out a regional reconnaissance program, which has defined three new drilling targets in the Cuaba Quemada area. In the third quarter of 2008, an extensive auger drilling program was carried out in the southern edge of the belt, in the Sierra Prieta area.

Cumpié Hill/Loma Mala Nickel Laterite Program

The Cumpié Hill nickel laterite deposit is located 2.5 kilometres southwest of the town of Maimón in the Monseñor Nouel Province in the Dominican Republic, adjacent to the Falcondo nickel laterite mine and eight kilometres from Xstrata’s Falcondo smelter. Two main areas of lateritic nickel occurrences have been identified in the Cumpié Hill deposit area, namely the Cumpié Sector and the Loma Mala Sector.

In February 2008, GlobeStar announced the completion of a NI 43-101 compliant Technical Report that disclosed the total resource estimate for the Company’s Cumpié Hill nickel laterite project. Resource estimates were based on 105 diamond core drill holes comprising 2,680 metres completed between May 2006 and September 2007. The mineral resource estimate for the total Cumpié Hill nickel laterite property, included an estimated indicated resource of 3.0 Mt grading 1.5% Ni and an inferred resource of 3.2 Mt grading 1.5% Ni, both at a cut-off grade of 1.0% Ni. At a cut-off grade of 0.9% Ni, the indicated resource is 3.4 Mt grading 1.4% Ni and the estimated inferred resource is

Moblan Property – Quebec, Canada

The Moblan property is a highly fractionated pegmatite deposit north of Chibougamau, Quebec. Preliminary work on the deposit has demonstrated that the Moblan pegmatites contain lithium and feldspar minerals suitable for the glass and ceramic industries, as well as a number of by-product minerals containing tantalum, niobium, cesium and rubidium. The extremely low iron content of the feldspars makes them particularly attractive for sale to industrial users.

A twelve-hole diamond drilling program, totalling 1,245 metres, was finalized in December 2007 on the Moblan West property. The scope of the program was to test the continuity, geometry and structural control of the pegmatite bodies. Mapping and logging of the new cores revealed that typically the pegmatite is mineralogically zoned, generally with a feldspar wall zone and a spodumene-quartz core zone.

In September 2008, SGS Lakefield concluded a mineralogical study of the Moblan spodumene ore using core samples. Drilling results, together with the SGS mineralogical analysis, will be incorporated into a National Instrument 43-101 compliant Technical Report.

GlobeStar acquired a 60% interest in the Moblan West property in August 2008, after fulfilling the exploration expenditure requirements under the Company’s agreement on this property with SOQUEM Inc.